Warner Bros. Discovery CEO David Zaslav, who started talking about more deals shortly after inking a massive merger, irritating Wall Street, has been publicly quiet on that front for a bit. Today said he sees opportunities in M&A with the company on a stronger financial footing and rolling streamer Max out globally to achieve necessary scale.Discovery’s acquisition of Warner Media generated significant debt which stood at about $50 billion at one point. Warner Bros. Discovery has paid about $15 billion of that down, Zaslav said during a Q&A at Bernstein’s Strategic Decisions investor conference today. Free cash flow is stronger, streaming is (on-and-off) profitable “and we have a long-term plan.”“Over the next two to three years, I expect that there’s going to be some opportunities. There will be some players that want to get out of the business. There will be others that will look to consolidate … And so I think we will look to be opportunistic during that time.” It’s one reason Warner Bros. Discovery has been trying hard to clean up its finances, he said. At the current moment, the company may be unwilling to fork out what it needs to keep the NBA, putting its future with the league in doubt.He expects a shakeout to four or five global streaming players, as do others. “I think that the global nature of this business is going to require a number of players to decide whether they want to go it alone … or be part of a bigger global organization. I do think that some companies will be for sale.”Zaslav didn’t mention Paramount Global, the company very much for sale right now. He met with Par’s controlling shareholder Shari Redstone and former CEO Bob Bakish last fall when deal talk there began to heat up, but nothing came of it. Investors then were dubious at a another big transaction (and still may be). He indicated at a conference earlier this month that he’d backed off, saying, “However it turns out, I hope that they’re successful.”Asked in a kind of lightening round to respond to the word ‘Paramount’ he said “great storytelling heritage.” As for ‘M&A’ – “A lot of opportunity lies ahead. But be careful. Make sure you’re buying smart.”One big deal impediment for Warner Bros. Discovery is its tanked stock as the market sees less strategic opportunity than he does right now. The share, trending lower today, are at about $7.65.“The marketplace is not giving great value to the content side of the business. Right now, if you look at the overall multiple, the marketplace is giving so much better multiples and much bigger value to the distribution side,” he acknowledged.He said being able to to drive Warner Bros. Discovery content on Max globally “is going to will, I think create a lot of shareholder value.”"In the end, the consumer finds the product they like the best, whether it’s the best cookie, whether it’s the best sandwich, whether it’s the best storytelling.”
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