Warner Bros. Discovery and Paramount Global Have Held Meeting to Discuss Possible Merger

Alex Weprin
·3 min read
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The next entertainment mega deal may be on the horizon.

Warner Bros. Discovery CEO David Zaslav and Paramount Global CEO Bob Bakish held a meeting this week, a source confirms to The Hollywood Reporter.

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The moguls discussed the possibility of a merger between the companies, though the source added that it was “very, very early” in talks. Spokespersons for both WBD and Paramount declined to comment. Axios first reported the meeting.

A deal, if it comes to fruition, would bring together two of the entertainment industry’s biggest players, with WBD owning the Warner Bros. film and TV studios, HBO, and the former Turner and Discovery cable channels. It also operates the Max streaming service.

Paramount owns CBS, Paramount Pictures and its robust film and TV studios, and the former Viacom cable channels like MTV, Comedy Central, BET and Nickelodeon.

Such a deal would likely attract less regulatory scrutiny than other potential mergers, with WBD lacking any domestic broadcast network, and with mostly synergistic businesses. The biggest source of friction would likely be combining the two legacy film and TV studios.

But the synergies would be strong. The CBS broadcast network and its local stations would fill a linear vacuum in WBD’s portfolio, and bolster its sports business, with leagues looking to have broadcast accessibility alongside cable and streaming. Likewise, the CBS Sports and WBD Sports rosters of rights do not overlap (aside from a long-term deal to share March Madness), and it would bring the NFL into the WBD fold.

CBS News and CNN, likewise, had held merger talks in the late 1990s and early 2000s, a high-level source has said, though no deal ever came to fruition there. The view at the time was that CBS News’ broadcast programming and the cable programming of CNN would complement each other.

And of course it would dramatically alter the landscape of entertainment, with critical intellectual property like Star Trek, DC Comics, Harry Potter, Mission Impossible, Transformers, Spongebob Squarepants and Looney Tunes all under one roof. That is if regulators approved such a deal, or if they required any sort of spinout to satisfy their competition requirements.

The two streaming services, Max/Discovery+ (95 million global subscribers) and Paramount+ (63 million subs), are seen as subscale compared to the offerings from Netflix (247 million subscribers) or Disney+ (105 million core subs), with a merger helping to bulk them up.

Paramount and WBD have had tough years, with their stock prices continuing to trade well below their highs in the early days of the streaming wars. WBD appears to be closing in on profitability in streaming, albeit at the cost of angering the town with some cost-saving decisions.

Both companies have been cited as ripe merger targets in 2024, alongside Comcast-owned NBCUniversal. WBD, under the terms of its Reverse Morris Trust deal that led to Discovery and WarnerMedia combining, technically can’t execute on any deal until April of 2024.

Zaslav has been an avid dealmaker since taking over Discovery Communications in 2006. He orchestrated a takeover of rival Scripps Networks Interactive, making the company an unscripted entertainment giant that included Food Network and Discovery Channel.

And of course he sparked the deal to acquire WarnerMedia, infamously texting a golf emoji to AT&T CEO John Stankey in an exchange that would lead to formal talks.

Both Zaslav and WBD board member John Malone have said publicly in the last month that they see “opportunistic” deals, with many observers speculating that they had their eyes set on Paramount.

Shari Redstone, who controls Paramount through her family holding company National Amusements, is also said to have entertained talks about her NAI’s controlling stake in Paramount. The latter has also sought to sell “non-core” brands, including the book publisher Simon & Schuster, and the BET cable channels.

Byron Allen, the founder of Allen Media Group, has also renewed interest and offered $3.5 billion for the BET assets (including BET, BET+ and VH1) in a letter to Paramount executives, a source familiar with the matter confirms.

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