Paramount, WBD chiefs reportedly meet for early stage merger talks

Multiple sources have told Axios that Paramount Global CEO Bob Bakish and Warner Bros. Discovery CEO David Zaslav met Dec. 19, 2023, to discuss a possible merger between the two media giants. 

According to those sources, WBD could buy Paramount Global or its parent, National Amusements Inc. 

If such a merger were to occur, it could represent a further step in media consolidation while also offering both cost-savings and synergies between the two companies’ current properties.

For example, streamers Paramount+ and Max (which incorporated Discovery+ into its archives) could be combined into a single powerhouse in order to better take on competitors such as Netflix.

Paramount’s CBS News and Stations and WBD’s CNN could combine operations, likely resulting in significant cost-savings while expanding its available audience. CBS’s library of shows such as “NCIS,” “CSI” and “Criminal Minds” could also help fuel WBD’s Investigation Discovery network.

Meanwhile, Paramount has a stronger collection of children’s programming that could complement the existing Max streaming library well.

Sports is another area where the two companies could work well together; CBS and Turner Sports, part of WBD, already share TV rights for March Madness, notes Axios. 

Paramount is laden with significant debt of around $15 billion but is still worth around $10 billion as of the afternoon of Dec. 20, 2023. WBD, on the other hand, is valued at around $29 billion.

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It likely will need to find a strategic partner or sell to satisfy investors and remain a strong player in the industry. A key tax stipulation stemming from the merger of WarnerMedia and Discovery to form WBD in 2022 expires in 2024.

While Bakish and Zaslav reportedly met at Paramount’s headquarters in New York for “several hours,” nothing definitive resulted from the meeting. It’s not uncommon for executives of major companies to have early exploratory meetings to gauge interest and talk out different options.

WBD has, however, reportedly hired bankers to help advise it on a potential deal, according to Axios.

Sources also mentioned that insiders are not concerned about any potential regulatory objections despite a general wariness of antitrust issues in Washington. Key to that is the fact that WBD is not in the over-the-air broadcast TV network business and neither company controls pay-TV services such as Comcast’s Xfinity. 

Combining the two companies would result in major film studios Paramount Studios and Warner Bros. coming under one umbrella. 

In a separate report, CNBC’s Alex Sherman noted that news of a possible WBD-Paramount deal could spark interest from NBCUniversal. 

NBCU buying Paramount also has some strategic advantages, though it could also face heavier regulatory issues due to the fact both companies own major broadcast networks, cable news networks and top movie studios. 

Paramount already sold off its Simon & Schuster publishing division and is in talks to sell BET as well. 

Given that the deal is still in the early exploratory phases, it’s also not clear what the new company might be called or how leadership might be structured.

Paramount Global was previously known as ViacomCBS until Feb. 16, 2022.