Hollywood abuzz with reports of Warner Bros Discovery, Paramount Global talks

Hollywood was abuzz on Wednesday with reports that the heads of Warner Bros Discovery (WBD) and Paramount Global have been in exploratory talks over a possible merger.

According to reports on multiple sites which first appeared on Axios, WBD CEO David Zaslav and Paramount Global CEO Bob Bakish met on Tuesday in New York.

WBD shares dropped more than 5% while those of Paramount Global declined marginally in the wake of the reports.

Zaslav is also said to have spoken separately with Shari Redstone, whose National Amusements holds a controlling interest in Paramount Global, parent of Paramount Pictures and its storied franchises and library, and the struggling streaming platform Paramount+.

Both WBD and Paramount Global own studios, cable, and streaming platforms, while WBD does not own linear networks like Paramount Global’s CBS and affiliates.

The apparent synergies may keep US regulators from attempting to block any proposed media mergers, heading into an election year when president Joe Biden’s administration may be looking to deliver statement rulings.

At time of writing neither WBD nor Paramount Global had confirmed the talks to Screen.

Redstone is looking to put up Paramount Global for sale, borne out by recent reports of interest from David Ellison’s Skydance Media and equity firm RedBird Capital.

Last week The Wall Street Journal reported Paramount Global senior executives have discussed laying off around 1,000 staffers in the new year to cut costs, which can indicate a willingness to prepare for a sale.

April will mark the two-year anniversary since the merger between Discovery Communications and AT&T’s WarnerMedia entertainment division in 2022 resulted in WBD. The Reverse Morris Trust mechanism used to structure the deal expires on April 8, 2024, allowing WBD to acquire companies without incurring a hefty tax bill.

WBD has long been the subject of a potential merger with Comcast, owners of NBCUniversal.

• Separately, it emerged on Wednesday that billionaire media mogul Byron Allen has reportedly made another run at Paramount Global-owned BET Media Group, offering $3.5bn for the cable channel, VH1, BET Studios, and BET+.

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