January 5, 2024

A potential merger between Warner Bros. Discovery and Paramount Global would create a new giant in the marketplace.

Szymon Karbowski
A potential merger between Warner Bros. Discovery and Paramount Global would create a new giant in the marketplace.

Warner Bros. Discovery may merge with fellow entertainment giant Paramount Global, according to Axios sources. David Zaslav, head of Warner Bros. Discovery (WBD), met with Paramount Global CEO Bob Bakish at Paramount's Time Square headquarters in New York in December to discuss the possible merger.

During the meeting, which lasted several hours, the two executives discussed how the two companies could complement each other. For example, in order to compete with video streaming leaders Netflix or Disney Plus, there could be a merger of the two companies' video streaming platforms, namely Max and Paramount Plus. The two executives have also reportedly discussed a deal with Shari Redstone - the head of Paramount's parent company, National Amusements Inc. If a merger does take place, it remains to be seen whether Warner Bros. Discovery will buy all of Paramount or just National Amusements Inc.

The Federal Trade Commission has so far declined to comment on the matter. This merger would further reduce the number of major players in the entertainment and video streaming industries. As you may recall, Warner Bros. completed a massive merger with Discovery in 2022, a move that has already changed the industry significantly. Recently, the market value of Warner Bros. Discovery was around $29 billion and Paramount was valued at over $10 billion. In the event of a merger between the two brands, it is Warner Bros. Discovery that would have the final say in terms of collaboration.

Following a potential merger, WBD could use its international distribution to strengthen the Paramount franchise. And Paramount's children's programming assets could be important to Warner Bros. Discovery's long-term plans to develop its streaming offering. The two companies would bring together a number of major TV networks in a joint offering, including: from the Warner Bros: CNN, HBO, TNT, TVN, TBS, Discovery Channel, HGTV, TLC, Cartoon Network or Food Network; and from Paramount's offering: CBC, Comedy Central, BET, MTV, Nickelodeon.

It is no secret that Paramount has been struggling financially for some time and is determined to find a strategic partner or buyer. Negotiations between the two companies are said to be at a very early stage. Will they be successful? The coming months will tell us more. However, if they are successful in completing the merger, the changes in the market for the entertainment and video streaming industry will be significant. There is a very clear trend towards consolidation of the big brands in our industry, influenced by significant changes in audience habits and needs.

#SzymonKarbowski #StreamVX #videostreaming #WarnerBrosDiscovery #Paramount #Fusion

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