Warner Bros. Discovery CEO David Zaslav met with Paramount Global CEO Bob Bakish on Tuesday in New York to discuss a possible merger, sources said. Zaslav also has spoken to Shari Redstone, whose National Amusements Inc. owns a controlling stake in Paramount Global, about a potential combination of the companies.
Reps for Paramount Global and WBD declined to comment. Axios first reported the talks.
Terms of a potential combination of the companies could not be learned. As of the end of Q3, Paramount Global reported long-term debt of $15.6 billion, considerably less than WBD — whose debt load stood at $43.5 billion. But in terms of market value, Warner Bros. Discovery is the bigger fish, with a market capitalization of $28.4 billion as of close of trading Dec. 20 compared with $10.3 billion for Paramount Global.
Warner Bros. Discovery and Paramount would be looking to pool their assets, which span TV, film, sports and streaming, to gain greater scale and operational efficiencies. Specifically, WBD and Paramount might look at combining their Max and Paramount+ premium streaming services to better compete with the likes of Netflix and Disney’s Disney+ and Hulu.
Warner Bros. Discovery was formed through Discovery Communications’ acquisition of WarnerMedia from AT&T, a deal that closed in April 2022. Paramount Global is the result of the merger of CBS and Viacom — a combination driven by Shari Redstone — which closed in December 2019.
Redstone has been in talks to sell her shares in NAI, according to multiple reports. Redstone discussed a sale of her NAI stake with Skydance Media CEO David Ellison, who has teamed with private-equity firm RedBird Capital, and she separately met with departing Activision Blizzard CEO Bobby Kotick about a possible deal, the Journal reported. The speculation is that a buyer of Redstone’s NAI stake would be interested in carving up Paramount Global into pieces, separating the studios group from the legacy TV business. Meanwhile, Paramount management has considered laying off more than 1,000 staffers in early 2024 to cut costs, per the Journal.
Sources said Warner Bros. Discovery senior execs felt like they had to move sooner rather than later to engage in discussions with Paramount Global after the reports about Skydance’s interest in buying out Redstone’s NAI stake.
From Variety US