Warner Bros Discovery stock surges after WSJ Paramount report

Warner Bros Discovery (WBD) stock surged 33% on Thursday following a report in The Wall Street Journal that it is the target of an acquisition by Paramount Pictures.

The rumour is not new and speculation has been circling in Hollywood for many months. However the Journal reported that David Ellison, the 42-year-old new chairman and CEO of Paramount following the $8.4bn merger with his Skydance Studios, is preparing a bid to acquire all of WBD.

David Zaslav, CEO of WBD, said this week that he expects the company he runs to split in April 2026 into the previously announced Warner Bros streaming and studios business, and Discovery Global housing the global networks.

A merger between Paramount and WBD would require approval from the Federal Communications Commission and would be expensive. Thursday’s stock surge raised WBD’s market cap to around $40bn and it carries $35bn in debt.

Ellison’s father, Oracle founder Larry Ellison who is said to be worth in the region of $380bn, could provide funds for the merger. He bankrolled some $6bn of the Paramount acquisition, with RedBird Capital putting up $2bn.

A Paramount-WBD merger would be frowned upon by creatives in Hollywood as it would remove a studio buyer from the equation and leave four legacy studios, including Disney, Universal, and Sony.

Ellison has stated his love for creating theatrical entertainment, however the thrust of his focus appears to be firmly on building a modern studio with streaming and tech at its heart. A merger would bring Paramount+ and the now-profitable HBO Max under one banner and potentially challenge Netflix.

That is likely to take some time. The latter’s global subscriptions are more than 300m, while Paramount+ reached 77.7m according to its Q2 earnings report in late July. HBO Max reached 125.7m per its Q2 earnings in late June. Zaslav said this week he expected that number to reach 150m next year. 

This week Paramount hired former Meta executive Dane Glasgow as chief product officer.

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