Warner Bros. Discovery In Talks To Merge With Paramount

Warner Bros. Discovery CEO David Zaslav met with Paramount Global CEO Bob Bakish on Tuesday to discuss a possible merger.

A report from Axios says the meeting lasted several hours.

Among the topics discussed was merging the companies' streaming services, Paramount+ and Max.

We've recently written about how streaming platforms have struggled to keep pace with industry leaders Netflix and Disney+.

In fact, Paramount held talks with Apple about bundling Paramount+ with AppleTV+ earlier this month.

A full merger with WBD would likely negate the need to team with Apple. If so, look for Apple to turn to NBC's Peacock for a possible partnership.

Beyond streaming, WBD and Paramount could combine their news divisions CBS News and CNN.

CBS News and CNN are clear thirds in their respective fields behind ABC News and NBC News, and Fox News and MSNBC.

On the positive side, a merger would see CBS' NFL, golf, and college football combined with WBD's NBA, MLB, NHL, and AEW Wrestling. The two companies already share TV rights for March Madness.

That's a sports package that few networks could top, including ESPN.

Financially, neither company is well-positioned to compete with their rivals. Warner Bros. Discovery has a market cap of $29 billion. Paramount is worth $10 billion. 

By comparison, Netflix is worth $214.14 billion. Apple $3.03 trillion, Disney $167.05 billion, and Amazon $1.57 trillion.

So, a merger makes sense. It could be the necessity needed for both companies to stay competitive.

In addition, Paramount's long-term debt load is $15 billion. WBD continues to cut costs, trying to navigate a changing media landscape in which the value of cable has decreased.

Finally, a merger would mark the third major change in ownership of WarnerMedia in five years.

AT&T acquired the assets, then known as Time Warner, in 2018. AT&T then spun off those assets in 2022 in a merger with Discovery, Inc., thus creating Warner Bros. Discovery.