Back in June, news that Warner Brothers Interactive Entertainment was being put up for sale seemed to be coming out of left field for industry watchers. Today, it appears that AT&T has thought better about it, though they haven't gone quite as far as tearing up the "For Sale" sign just yet.
Bloomberg is reporting that AT&T has chosen to remove WBIE from the list of "non-core" assets that some investors have been pushing to be sold off. The unit has experienced significant growth in the wake of the COVID-19 pandemic, becoming a golden goose that the telecom giant is far more reluctant to kill than they once were, owing to the large surge in people buying (and playing) video games.
The sources for the Bloomberg piece, speaking anonymously, indicated that AT&T was initially working with LionTree Advisors, an institutional brokerage firm, to manage the sale. Rumored buyers included Microsoft, Activision Blizzard, Electronic Arts, and Take Two Interactive. AT&T has been looking to slash debt and unload assets which aren't helping the bottom line, such as satellite TV provider DirecTV and anime streaming service Crunchyroll. Now-CEO John Stankey told investors last October, "We have no sacred cows -- we're always open to making portfolio moves."
Food For Thought
This may be a reprieve rather than a permanent reconsideration. One factor to consider is the potential for boosts from WBIE during the holiday season, particularly with Cyberpunk 2077 being likely the "must-have" title for the newly launching PS5 and Xbox Series X consoles here in the US. Additionally, a potential Harry Potter video game could further pad the bottom line.
On the other hand, somebody at AT&T may have thrown up a "hold" sign owing to the potential complications relating to the amount of IP franchises and licensing issues involved with several titles.