Is a Warner Bros and Paramount merger on the cards?

Published on: 4th January 2024

According to multiple media reports, Warner Bros Discovery and Paramount Global are in early talks to explore a merger.

Talks are believed to be at an early stage, for a deal that would bring together the two major studios with a combined market value of $38b (£30b), although it is uncertain whether the deal will go ahead.

Warner CEO, David Zaslav, and Paramount CEO, Bob Bakish, reportedly discussed a possible deal prior to Christmas. As traditional media companies have had to react quickly to compete with Netflix, Amazon Video and Apple TV, both Warner and Paramount have undertaken cost-cutting measures in an attempt to minimise losses from their own video streaming services.

According to Axios, the studios discussed how each company’s main streaming service, Paramount Plus and Max (formerly HBO Max), could merge to better compete with rivals Netflix and Disney Plus.

Analysts are of the opinion that Paramount would need to find a buyer or strategic partner because of the level of debt accrued in recent years whilst bulking up its streaming service, while they believe that Warner Bros is in a better cash position, partly due to recent mergers.

Last year, AT&T’s WarnerMedia unit and Discovery merged to become Warner Bros Discovery, with a portfolio that includes Discovery Channel, Warner Bros. Entertainment, CNN, HBO, Cartoon Network and franchises such as Batman and Harry Potter. Paramount owns CBS, the BBC’s US partner.

The dominance of Netflix and other companies in the media space has only increased since Netflix’s crackdown on account-sharing which led to new accounts created, mostly in the US, Canada and Europe, bringing its total number of subscribers to 247.2m globally. Paramount Plus total subscribers, meanwhile, stand at 63.4m and Warner Bros Discovery 95m, as of November 2023.

Some industry experts have reacted to the rumour with scepticism. TD Cowen analyst, Doug Creutz, told The Hollywood Reporter: “We have a very hard time believing the current FTC/DOJ, which has been very aggressive in combating industry consolidation, would give this deal a pass.”

Paramount and Warner Bros have so far declined to comment on the situation.


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