There are early talks about a merger between Warner Bros Discovery and Paramount Global, according to several media reports.
Under the terms of the agreement, CBS News, the studio that produces the Mission Impossible movies, and the owner of HBO channels would collaborate.
This week, at lunch in New York, Warner CEO David Zaslav and Paramount CEO Bob Bakish discussed a potential deal, as originally reported by Axios.
Sources informed the FT that talks are in their early stages and that a deal might not close.
With a combined market value of $38 billion (£30 billion), Warner and Paramount would become one of Hollywood’s “Big Five” studios through the deal.
Traditional media businesses have had to make quick investments in order to stay competitive with the likes of Netflix, Amazon Video, and Apple TV, as a result of episodes and movies being streamed.
In order to reduce losses from their video streaming services, which are estimated to be in the billions of dollars, Warner and Paramount have had to make some significant expense reductions.
Consequently, their stock values are still significantly below their peak during the initial days of streaming.
Over lunch, the CEOs reportedly discussed how to combine Paramount Plus and Max (formerly HBO Max), their primary streaming services, to more effectively compete with Netflix and Disney Plus. This information was reported by Axios.
Due to the amount of debt it has accumulated in growing its streaming service in recent years, Paramount is under a lot of pressure to find a buyer or strategic partner.
According to analysts, Warner’s cash position has improved slightly as a result of certain clever mergers.
CNN is one of the businesses owned by Warner Bros. Discovery.
With a portfolio that comprised Discovery Channel, Warner Bros. Entertainment, CNN, HBO, Cartoon Network, and properties like Batman and Harry Potter, AT&T’s WarnerMedia division and Discovery merged to form Warner Bros Discovery last year.
According to media sources, the industry is expected to undergo further consolidation.
It is impossible to dispute Netflix’s and other large tech companies’ domination in the media industry, both in terms of their financial results and the quantity of shows and subscribers they have.
In 2023, Netflix added 5.9 million paid subscribers globally between March and June, and 8.8 million between July and September, according to Statista.
Due to the company’s recent crackdown on account-sharing, new accounts were established, mostly in the US, Canada, and Europe. As a result, the overall number of users worldwide has increased to 247.2 million.
In contrast, as of November 2023, Warner Bros. Discovery has 95 million subscribers, while Paramount Plus had 63.4 million.