Warner Brothers Discovery and Paramount Reportedly In Merger Talks to Form Media ‘Behemoth’

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Axios reported on Wednesday that Warner Bros. Discovery CEO David Zaslav and Paramount Global CEO Bob Bakish met in New York City earlier this week, possibly to discuss a merger between their two entertainment companies.

The report by Sara Fischer (who disclosed that she was a paid contributor to WBD-owned CNN) claimed that such a partnership would create a “news and entertainment behemoth,” and she pointed out that “WBD’s market value was around $29 billion as of Wednesday, while Paramount’s was just over $10 billion, so any merger would not be of equals.” Shari Redstone, president of Paramount’s owner National Amusements Inc., was also part of the conversations — amid news that she has been looking to sell her stake in Paramount’s parent company.

Fischer noted what led to the conclusion that a merger could be coming, citing past deals made by Zaslav and the activities that surrounded them:

Behind the scenes: One source familiar with the discussions says the strategy being considered mirrors Zaslav’s blueprint for prior mergers.

• When merging with Scripps in 2018 and then WarnerMedia in 2022, Zaslav kept his core strategic team in place while retaining new creative talent leaders from the companies he acquired.

• Executives are confident that the deal would receive regulatory approval, despite D.C.’s active antitrust climate. Notably, Warner Bros. Discovery doesn’t own a broadcast network, which would clear an easier path than would a combination with a company like NBC owner Comcast.

• A tax provision used to merge WarnerMedia and Discovery expires next year, which would legally allow WBD to explore another deal.

• Zaslav told investors last month that the company’s cost-cutting measures and debt reduction now put it in a position “to allocate more capital toward growth opportunities.”

Fischer wrote that talks were “still early” and there was no indication that a deal was met on Tuesday. None of the companies involved had comments. Read the full article at Axios.