Warner Bros. Discovery is reportedly in merger talks with Paramount Global,
according to a report from Axios. WBD CEO David Zaslev reportedly met with
his counterpart Paramount Global CEO Bob Bakish at Paramount headquarters
in New York on Tuesday to discuss combining the Paramount+ (including Showtime)
and Max streaming services, which would up the competition
against the likes of Netflix and Disney+.
Zaslev also reportedly talked with Paramount owner Shari Redstone as well,
Axios said. WBD has reportedly hired bankers in preparation for a possible
deal and it’s not clear yet whether WBD would acquire Paramount Global outright
or its parent company National Amusements Inc.
Combining the two would create a global streaming juggernaut. WBD has a global
footprint and could create a more international market for Paramount, which has
been expanding its the availability of its programming overseas. WBD’s CNN
already has a 13-year partnership with CBS News—so combining the two would
potentially be easier and provide a much larger news entity
that could be more competitive to Fox News.
In its latest earnings report last month, Paramount reported that its
Paramount+ streaming service added 2.7 million net subs for more than
63 million globally. Overall, Paramount+ revenue grew 61% in Q3 2023,
driven by subscriber growth and increased advertising revenue as Paramount+
global ARPU expanded 16% year-over-year.
However, debt is piling up as the company reported that it lost $238 million
in its first quarter after combining Showtime with Paramount+ earlier this year.
That’s an improvement over losses of $424 million in Q2 and $511 million in Q1
and Paramount executives believe the losses have peaked.
Worldwide, Netflix stands alone atop all streaming services with more than 247
million. Amazon Prime comes in second at with an estimated more than 200 million
and Disney+ with just over 150 million. Max is #4 with 95.8 million, followed
by Paramount+'s 63 million. Combining the two would create a combined entity
of 159 million, and make it second only to Netflix.
Despite having merged Warner Bros. with Discovery in 2022, the combination of
the two has has not gone as well as executives liked, with debt issues stymieing growth.
That debt problem could be a big hurdle to such a merger, according to
William Cohan, Puck News Founding Partner, who told Yahoo Finance yesterday:
“For Warner Bros. Discovery, with its $43 billion in debt, and Paramount's
$15 billion in debt, and the overlap in terms of business lines, it's going
to be difficult, strategically and regulatorily, to get this through.
But David Zaslav is nothing if not ambitious. He clearly doesn't think he's
done yet in Hollywood. He wants more in Hollywood."
Richard Cooper, research director at Ampere Analysis told TV Tech sister
brand TVBEurope that although any merger would have to pass muster with regulators,
“it would not be unreasonable to expect this deal to also be approved.”
“Though it would reduce the number of major U.S. studios, a key consideration
is the emergence of other major domestic content producers to consider such
as Netflix and Amazon Prime,” he said.
according to a report from Axios. WBD CEO David Zaslev reportedly met with
his counterpart Paramount Global CEO Bob Bakish at Paramount headquarters
in New York on Tuesday to discuss combining the Paramount+ (including Showtime)
and Max streaming services, which would up the competition
against the likes of Netflix and Disney+.
Zaslev also reportedly talked with Paramount owner Shari Redstone as well,
Axios said. WBD has reportedly hired bankers in preparation for a possible
deal and it’s not clear yet whether WBD would acquire Paramount Global outright
or its parent company National Amusements Inc.
Combining the two would create a global streaming juggernaut. WBD has a global
footprint and could create a more international market for Paramount, which has
been expanding its the availability of its programming overseas. WBD’s CNN
already has a 13-year partnership with CBS News—so combining the two would
potentially be easier and provide a much larger news entity
that could be more competitive to Fox News.
In its latest earnings report last month, Paramount reported that its
Paramount+ streaming service added 2.7 million net subs for more than
63 million globally. Overall, Paramount+ revenue grew 61% in Q3 2023,
driven by subscriber growth and increased advertising revenue as Paramount+
global ARPU expanded 16% year-over-year.
However, debt is piling up as the company reported that it lost $238 million
in its first quarter after combining Showtime with Paramount+ earlier this year.
That’s an improvement over losses of $424 million in Q2 and $511 million in Q1
and Paramount executives believe the losses have peaked.
Worldwide, Netflix stands alone atop all streaming services with more than 247
million. Amazon Prime comes in second at with an estimated more than 200 million
and Disney+ with just over 150 million. Max is #4 with 95.8 million, followed
by Paramount+'s 63 million. Combining the two would create a combined entity
of 159 million, and make it second only to Netflix.
Despite having merged Warner Bros. with Discovery in 2022, the combination of
the two has has not gone as well as executives liked, with debt issues stymieing growth.
That debt problem could be a big hurdle to such a merger, according to
William Cohan, Puck News Founding Partner, who told Yahoo Finance yesterday:
“For Warner Bros. Discovery, with its $43 billion in debt, and Paramount's
$15 billion in debt, and the overlap in terms of business lines, it's going
to be difficult, strategically and regulatorily, to get this through.
But David Zaslav is nothing if not ambitious. He clearly doesn't think he's
done yet in Hollywood. He wants more in Hollywood."
Richard Cooper, research director at Ampere Analysis told TV Tech sister
brand TVBEurope that although any merger would have to pass muster with regulators,
“it would not be unreasonable to expect this deal to also be approved.”
“Though it would reduce the number of major U.S. studios, a key consideration
is the emergence of other major domestic content producers to consider such
as Netflix and Amazon Prime,” he said.
