• by Wayne Friedman , Staff Writer, 9 hours ago

Media analysts are increasingly racking their brains with the idea Netflix is considering buying all or part of Warner Bros. Discovery.

They say this could push Netflix's predominantly strong business objectives off the rails. This is one main reason the stock market has pushed down the stock of late.

Last week, Netflix -- along with Paramount Skydance and Comcast Corp. -- submitted official bids for the company. But Netflix would seem to be the underdog in its effort for many.

Morgan Stanley media analyst Benjamin Swinburne says that more than other bidders, as the pure-play dominant streaming business, Netflix may run into regulatory, anticompetitive concerns much more than Paramount and Comcast. Other media analysts have hinted at this as well.

In addition, that because it is just a pure-play streaming platform, there is little to no savings when it comes to synergy with other parts of WBD, like its legacy cable TV  networks. For example, Netflix doesn’t own any cable TV networks or other businesses that are attached to that legacy business, like distribution.

“TV distribution is built on run-of-series agreements and multi-year licensing deals and talent relationships,” Swinburne notes, which could take a lot to untangle.

Current movies that are in process of production -- and under contract -- would still need to go the traditional theatrical distribution route.

And that last piece would counter Netflix premise: A main focus is putting high quality movies and TV shows on its streaming platform.

While Netflix does own a few individual movie theaters, those are primarily used as a requirement needed to compete for awards -- like the Oscars.

All this has been pushing the stock down some over the past few days. Swinburne says all this would “complicate the investment thesis, distract management, and/or dilute EPS.”

Now some other analysts have been saying the positive for the Netflix-WBD combination would be focused around the legendary Warner Bros. studios for TV and film production -- as well as the film/TV library. That might be possible, given that Warner Bros. has plans to split into two companies -- one for its studios and its streaming platform and another for its cable TV networks.

What is not known is what permutations WBD’s board of directors can make now regarding the bids for the company amid their resulting plans for splitting into two.

Netflix's strong financial situation could make it a winner. And if that happens, expect ever-changing industry drama to take another wild turn.