The Warner Bros-Netflix-Paramount scrap: The real winners

NEW YORK: In the high-stakes poker game for Warner Bros Discovery, there’s one guaranteed winner: the bankers. While Netflix and Paramount Skydance slug it out over the media giant’s carcass, JPMorgan and Allen & Company are already counting their chips—a cool $90 million each, win or lose.

It’s the ultimate hedge. No matter which suitor carries Warner Bros Discovery down the aisle, the investment banks walk away with bulging pockets. Talk about having your cake and eating it too.

JPMorgan has been particularly busy feathering its nest. The bank pocketed roughly $189 million in fees over the past two years for “financial advisory and other services”—a wonderfully vague phrase that covers everything from strategic counsel to arranging a whopping $17.5 billion bridge loan. That loan, incidentally, holds the dubious honour of being Wall Street’s largest-ever non-investment-grade bridge facility. Warner Bros Discovery used it to buy back about half its bonds at a discount, part of a cunning plan to split itself in two.

For over two years, JPMorgan boffins huddled with Warner Bros Discovery executives, war-gaming merger-and-acquisition scenarios. The grand result? A plan to carve the company into separate entities—streaming and studios on one side, legacy assets on the other.

Now Netflix has upped the ante this week with a sweetened bid for the streaming and studio bits, whilst Paramount Skydance’s tender offer for the whole enchilada closes on Wednesday. Investors are glued to their screens, waiting to see who blinks first.

But the real drama? That’s already been written. Whatever happens next, the bankers have already secured their happy ending.