Warner Bros. Discovery CEO David Zaslav held talks with Paramount Global CEO Bob Bakish in New York City to explore the possibility of a merger, according to sources. The potential merger could lead to the creation of a massive news and entertainment entity, sparking further consolidation in the industry. Zaslav also engaged in discussions with Shari Redstone, the owner of Paramount’s parent company, about a potential deal. With Warner Bros. Discovery’s market value at around $29 billion and Paramount’s at just over $10 billion, any merger would not be a merger of equals.
The meeting between Zaslav and Bakish, which reportedly lasted several hours, occurred at Paramount’s headquarters in Times Square. Discussions included ways in which the companies could complement each other, such as merging their main streaming services, Paramount+ and Max, to better compete with Netflix and Disney+. The possibility of Warner Bros. Discovery acquiring Paramount Global or its parent company, National Amusements Inc. (NAI), is being considered, with both options reportedly on the table. Warner Bros. Discovery has purportedly hired bankers to explore the potential deal.
The merger could yield significant synergies, leveraging Warner Bros. Discovery’s international distribution footprint to enhance Paramount’s franchises and incorporating Paramount’s children’s programming assets into Warner Bros. Discovery’s streaming ambitions. There is speculation about combining CBS News with CNN to create a global news powerhouse and merging CBS Sports’ footprint with Warner Bros. Discovery’s, given their shared TV rights for March Madness.
Paramount is under pressure to find a strategic partner or buyer as it grapples with a substantial debt load. Talks about a potential deal involving Skydance Media and RedBird Capital Partners led to a 12% stock jump earlier in the month. Paramount has been restructuring its debt and selling assets, including Simon & Schuster, while engaging in talks to unload BET.
Sources familiar with the discussions indicate that the strategy under consideration aligns with Zaslav’s approach in prior mergers, such as those with Scripps in 2018 and WarnerMedia in 2022. Executives express confidence in obtaining regulatory approval, citing the absence of a broadcast network owned by Warner Bros. Discovery, which could ease regulatory hurdles. A tax provision used in the WarnerMedia and Discovery merger is set to expire next year, providing a legal avenue for Warner Bros. Discovery to pursue another deal. Both Paramount, Warner Bros. Discovery, and NAI declined to comment, and while talks are in the early stages, the rapidly changing media landscape makes it imperative for both companies to actively consider strategic moves.