CNBC is reporting that AT&T is looking to sell off game publishing division Warner Brothers Interactive Entertainment with an asking price of $4 billion USD. While talks are currently closed, and all interested parties are making no comment at this time, prospective buyers are Activision Blizzard, Electronic Arts, and Take-Two Interactive. AT&T bought up WBIE in 2018 as part of the larger acquisition of Time Warner.
This particular sale appears be coming ahead of a leadership transition at AT&T, with former WarnerMedia CEO John Stankey slated to replace outgoing CEO Randall Stephenson on July 1. The move is also coming at a time when certain activist investors, notably hedge fund Elliot Management, are calling for significant divestitures of non-core industries. Getting rid of WBIE may be a move to placate those investors while avoiding potential other sales which Stankey and Stephenson are resistant to, such as selling off satellite TV provider DirecTV.
For the potential prize at stake, $4 billion seems unusually low, which may indicate it’s intended as the minimum possible bid AT&T is willing to contemplate rather than a firm asking price. WBIE publishing deals with companies like CD Projekt RED (for The Witcher III: Wild Hunt and the upcoming Cyberpunk 2077) are probably a significant amount of money, not necessarily more than the asking price but certainly a good chunk of it. Then there are the studios that are directly owned by WBIE, such as Rocksteady (the Batman: Arkham series), Avalanche Studios (Just Cause series, Mad Max), and TT Games (LEGO games). Combine that with signature titles like the Shadows of Middle-Earth series and the Mortal Kombat series and you’re talking about some decidedly high profile properties.
On the other hand, it’s entirely likely that licensed properties like Batman, Harry Potter, and The LEGO Movie would revert to Time Warner, which is to say AT&T, as part of the terms of the sale which would in turn reduce the overall value of the deal.
This is one story which is likely to be watched closely throughout the industry.