Media Stocks 2025: The Bidding War for Warner Bros. Discovery
In 2025, David Ellison achieved what Warner Bros. Discovery CEO David Zaslav had been striving for three years: a dramatic surge in the company's market value. Warner Bros. Discovery, formed by the merger of Discovery and Warner Bros. in April 2022, soared to all-time highs, with shares up over 170% for the year. As of December 30, the company's market capitalization reached $71.8 billion, a significant increase from $25 billion at the start of the year.
The catalyst for this Wall Street rally was Ellison's aggressive pursuit of WBD. After acquiring Paramount Global through his Skydance Media, Ellison set his sights on WBD, backed by billions from his father, Larry Ellison. This triggered an intense M&A battle, causing stock price volatility for WBD, Paramount Skydance, and Netflix.
Netflix shares skyrocketed by 51% in mid-2025, fueled by solid growth and bullish analyst predictions. Amid rising share prices, Netflix executed a 10-for-1 stock split in October to make shares more affordable. As of December 30, Netflix shares were up 22.3%.
However, the $83 billion deal Netflix announced to acquire Warner Bros.' studios and HBO Max businesses sent investors into a frenzy. The uncertainty and heavy debt load associated with the deal caused a dip in Netflix shares, which still ended the year up 22%. Paramount shareholders were initially enthusiastic about Ellison's bid, but Paramount's stock price fell as WBD repeatedly rejected the offer.
Comcast, which made an unsuccessful bid to combine WBD's streaming and studios business with its own, saw its stock price decline by 17% for the year. Comcast's spin-off of Versant, including cable networks like CNBC and USA, is set to close on January 2, aiming to streamline operations and enhance investor confidence.
The M&A drama surrounding Warner Bros. Discovery continues. David Ellison has launched a hostile takeover attempt, offering $30 per share, which the WBD board has rejected. Paramount Skydance recently updated its offer, with Larry Ellison providing an irrevocable personal guarantee of $40.4 billion. The WBD board is expected to decline this offer as well. The Ellisons' pursuit of WBD remains uncertain, but regardless of the outcome, Zaslav stands to benefit financially from the sale, potentially becoming a billionaire due to his WBD stock holdings.
