Warner Bros. Discovery Is Exploring a Sale

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Alex Ossola (0:18)

GM's stock soars after the automaker reports better than expected earnings for the third quarter. Plus, why Warner Bros. Discovery is exploring a sale.

Joe Flint (0:28)

There is so much uncertainty about where the audience is going and how best to capture that audience and advertisers and the people who run these big companies naturally feel that they need to be bigger to compete.

Alex Ossola (0:43)

And what's behind a surge in renters turning to fraud to apply for luxury apartments? It's Tuesday, October 21st. I'm Alex Ossola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that moved the world today. General Motors' shares soared after its latest quarterly results. The automakers' third quarter was surprisingly strong, even with the pain of tariffs, a slowing electric vehicle market and supply crunches. GM said it is making faster than expected progress, reducing a multi-billion dollar tariff bill. Speaking on this morning's earnings call, GM CEO Mary Barra said the company is also moving quickly to downsize its money-losing electric vehicle business.

Mary Barra (1:30)

By acting swiftly and decisively to address overcapacity, we expect to reduce EV losses in 2026 and beyond, making us much better positioned as demand stabilizes.

Alex Ossola (1:41)

Net income plunged by more than half in the quarter, but an adjusted income figure exceeded Wall Street's estimates, and the automaker raised its guidance. Investors hope GM can benefit from selling more SUVs and trucks that run on gas now that the Trump administration has eased regulations. Shares jumped nearly 15% and closed at a record high. And reporting after the bell, Netflix said its revenue and profit rose in the third quarter as it grew subscribers, increased ad revenue and benefited from higher prices. Netflix said it recorded its best ever quarter for ad sales. The company's quarterly revenue rose 17% to $11.5 billion from a year ago. That was just below its own forecast for the period. For more on Netflix earnings, go to wsj.com.

Gold prices fell more than 5% in their biggest single day drop since 2013, a day after notching new record highs. Silver prices also slid. A solid start to third quarter earnings helped lift some company shares. You already heard about GM and Coca-Cola and manufacturer 3M also rose today after their results. Meanwhile, the stock of entertainment giant Warner Bros. Discovery popped 11%. More on that in a bit. Stocks overall were mixed, with the Dow ending about half a percent higher, the S&P 500 unchanged, and the NASDAQ slightly lower. Warner Bros. Discovery said it is exploring a potential sale for all or part of the company, setting into motion a deal process that could reshape the future of the entertainment industry. Warner is the company behind movies like Superman, the Harry Potter franchise, as well as cable networks HBO, CNN, and HGTV. Warner said it's gotten interest from quote, multiple parties. WSJ media and entertainment reporter Joe Flint joins me now with more. Joe, what can you tell us about this interest in Warner Bros. Discovery's assets?

Joe Flint (3:54)

The Wall Street Journal's previously reported paramount has made offers for Warner Bros. Discovery, and they have now made two offers, both of which have been rebuffed. Warner Bros. Discovery issued a statement this morning saying they have received interest from multiple suitors for some or all of the company. They're not disclosing who the suitors are. There's a round up the usual suspects list going around the industry. The others are very likely more interested in the Warner Bros. Studio, Library and HBO slash HBO Max streaming service.

Alex Ossola (4:37)

So Warner had previously announced that it was planning to split itself up. So given this announcement today, what happens with some of those plans?

Joe Flint (4:46)

The chairman of the company issued a statement this morning saying the split is still the preferred option of the company. Now, this can be also seen as a bit of a negotiating ploy. But for now, they said they're going to explore these other options, keep marching forward with the split with an idea of completing it in the middle of 2026 at the latest.

Alex Ossola (5:11)

It seems like this is part of a bigger consolidation push within the entertainment industry. What's driving that?

Joe Flint (5:19)

Fear. Fear is partially driving the consolidation. There is so much uncertainty about where the audience is going and how best to capture that audience and advertisers and the people who run these big companies naturally feel that they need to be bigger to compete. While Paramount has not commented specifically about Warner Bros. or any potential acquisitions, David Ellison, the CEO of Paramount, did say the other week at an industry conference that any deals they did would be more about increasing their content, increasing their market share. The more toys you have, the more you can bring people into your store. That's basically the thinking.