Paramount to combine HBO Max and Paramount+

Paramount chief executive David Ellison has outlined how his company will incorporate Warner Bros Discovery (WBD) following its $110bn deal for the US studio, with streaming operations set to be combined but HBO being left “to operate with independence”.

The Paramount chief executive, speaking on an investment call today (March 2), said that a combined HBO Max and Paramount+ streaming service would have 200m subscribers worldwide, which he added would make it a “competitor” to market leader – and recent rival for WBD – Netflix, which recently claimed 325m global subs.

Ellison also told investors that the “majority” of the planned $6bn synergy savings would come from “non-labour sources”, with production capacity across TV and film not being reduced.

“We have all the economic incentives to make sure we grow this business and we will invest in content to achieve those goals,” Ellison said.

The chief executive, who last year took control of Top Gun outfit Paramount having struck a deal via his Skydance banner, described streaming as being “essential to the success of the combined company” and added that it would “combine the streaming portfolios of the two companies into one stronger platform over the coming years.”

That will see WBD’s flagship streamer HBO Max and Discovery+ joining Paramount+ and Pluto TV on the Paramount side, but few other details were given as to how the combined service could look.

Ellison did, however, name-check HBO Max content chief Casey Bloys.

“We’re not going to get into personnel but… Casey [Bloys] and his team do a remarkable job at HBO and we plan for that to operate with independence so HBO can continue to do what it does so incredibly well.

“HBO should stay HBO. They built a phenomenal brand, a true leader in the space, and we want them to do more of it. And by bringing the platforms together, we can ensure it reaches a broader audience.”

Ellison said a combined platform would “position us to compete effectively with the leading streaming services in today’s marketplace” by offering “a complementary portfolio of fan favorite series and franchises, premium sports, and trusted news brands.”

The Paramount chief – who revealed his favourite HBO show to be Game of Thrones, closely followed by The Sopranos – added that the company would continue to “partner with third-party producers around the world, investing in the most compelling creative voices and empowering them to bring their distinctive, high quality stories to life.”

He continued: “By supporting productions within local markets, we not only strengthen regional creative ecosystems, but also deliver authentic, culturally resonant storytelling that captivates audiences and excites our subscribers worldwide.”

During a far-reaching call, it was also confirmed that Paramount has no plans to sell off any cable assets once the deal closes, which is expected to be in Q3.

The company also said that there were “no statutory impediments” to close the deal in the US, while Paramount has already begun discussions in the European Union, with Germany and Slovenia giving their greenlight to the acquisition, Ellison said.

Combined revenues of the two companies are expected to hit $69bn in 2026 and $18bn of EBITDA, Paramount added, with the latter figure inclusive of the $6bn synergy savings.

Ellison also touched on the use of AI, adding that while he “believes it to be transformative in this space, first and foremost we are a content and story company, and we look at AI as a tool for artists - we want to develop it through that lens.”

He added that AI could be used to “unlock” creativity among the next generation of producers and filmmakers, but said he looked at the tech in terms of “how it can be a tool, not a replacement”.

He added: “This deal isn’t just about the legacy of these storied studios. It’s about building the next chapter of what stories can be and who they can reach.”

Details of the financing were also confirmed. The $110bn transaction is funded by $47bn in equity, fully backed by the Ellison Family and RedBird Capital Partners, which may at closing include ”other strategic and financial partners”.

Paramount will issue new Class B shares at $16.02 per share and the transaction is backed by $54bn of debt commitments from Bank of America, Citigroup, and Apollo, which includes $15bn to backstop WBD’s existing bridge facility and $39bn of incremental new debt. The $54bn excludes $3.5bn of bridge financing from these institutions to backstop an existing $3.5bn revolving credit facility.

By acquiring the entirety of WBD for $31 per share in cash in addition to the 25 cent “ticking fee” Paramount must pay WBD shareholders each quarter should the transaction not close by September 30 2026, the deal values WBD at $81bn in equity value and $110bn in enterprise value.

This story first appeared on Screen’s sister site Broadcast.

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