Posted on 12/28/2023 7:22:30 AM PST by Red Badger
Warner Bros. Discovery CEO David Zaslav met with Paramount Global CEO Bob Bakish on Tuesday in New York City to discuss a possible merger, Axios has learned from multiple sources.
Why it matters: The combination would create a news and entertainment behemoth that would likely trigger further industry consolidation.
Zaslav also has spoken to Shari Redstone, who owns Paramount's parent company, about a deal.
WBD's market value was around $29 billion as of Wednesday, while Paramount's was just over $10 billion, so any merger would not be of equals.
Details: The meeting between Zaslav and Bakish, which sources say lasted several hours, took place at Paramount's headquarters in Times Square.
The duo discussed ways their companies could complement one another. For example, each company's main streaming service — Paramount+ and Max — could merge to better rival Netflix and Disney+.
It's unclear whether WBD would buy Paramount Global or its parent company, National Amusements Inc. (NAI), but a source familiar with the situation says that both options are on the table. WBD is said to have hired bankers to explore the deal.
Between the lines: The deal could drive substantial synergies.
WBD could use its international distribution footprint to boost Paramount's franchises, while Paramount's children's programming assets could be essential to WBD's long-term streaming ambitions.
CBS News could be combined with CNN to create a global news powerhouse. CBS' crime dramas, such as "NCIS" and "Criminal Minds," could be combined with Investigation Discovery and TruTV.
CBS Sports' footprint could be combined with WBD's. For example, CBS and WBD's Turner Sports currently share TV rights for March Madness.
Be smart: Paramount is under enormous pressure to find a strategic partner or buyer, as it's staring down a mountain of debt.
The firm's stock jumped 12% earlier this month following a report from Puck that Skydance Media and RedBird Capital Partners were eyeing a potential deal to buy a majority stake in NAI.
NAI reached a deal with creditors to restructure some of its debt in September and previously slimmed down by selling Simon & Schuster. It's also in talks to unload BET.
Behind the scenes: One source familiar with the discussions says the strategy being considered mirrors Zaslav's blueprint for prior mergers.
When merging with Scripps in 2018 and then WarnerMedia in 2022, Zaslav kept his core strategic team in place while retaining new creative talent leaders from the companies he acquired. Executives are confident that the deal would receive regulatory approval, despite D.C.'s active antitrust climate. Notably, Warner Bros. Discovery doesn't own a broadcast network, which would clear an easier path than would a combination with a company like NBC owner Comcast.
A tax provision used to merge WarnerMedia and Discovery expires next year, which would legally allow WBD to explore another deal.
Zaslav told investors last month that the company's cost-cutting measures and debt reduction now put it in a position "to allocate more capital toward growth opportunities." Paramount, WBD and NAI declined to comment.
The bottom line: Talks between WBD and Paramount are still early and may not ultimately result in a deal. But given the acceleration of cord-cutting and the growing encroachment of Big Tech on media, neither company can remain on the sidelines for long.
Disclosure: The author of this story is a paid contributor to CNN.
Fewer and fewer players.
say, I’d start watching something like that...when they go Full and unadulterated conservative.
“We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale. It has been since man crawled out of the slime. And our children will live, Mr. Beale, to see that perfect world in which there’s no war or famine, oppression or brutality — one vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock, all necessities provided, all anxieties tranquilized, all boredom amused.”
-Arthur Jensen (Network)
IOW, IDIOCRACY.......................
Um, no. Two are redundant so one goes bye-bye.
I watch WB for reruns of How it’s made. This move is already taking place whether we like it or not.
Another reason to remove apps from my TV.
There would be many redundancies - - the combined company would not need two sets of foreign news correspondents, nor two sets of executives and administrative staff. As is usually the case, everyone would have to reapply for their own job and the “best” would be kept and the others given severance. Which means the result would look very different than either does today.
This would be a more sustainable outcome for CNN than an outright sale, but CNN is small potatoes in the overall picture of Warner and Paramount.
Yup. And as streaming became the dominant distribution system, the big technology companies took over. They bought up the legacy movie studios to get control of their huge film libraries. The dynamic is easy enough to understand, but the asymmetry of scale is overwhelming. Theatrical movies used to be their own domains, run ultimately by people who lived, ate, and breathed movies. Then came streaming. Apple, Amazon, Comcast and ATT bought the big movie studios. It never worked the other way around. Even the largest movie studios were tiny compared to the tech giants, which can afford to use theatrical movies as loss leaders and bleed billions of dollars a year in a battle for market share in the subscription wars. The tech companies have global platforms and are focused on generic content for generic global viewers. That's the underlying cancer that is destroying the industry today. For the first time in its history, the movie business is ultimately being run by people who aren't in the movie business and who view movies as loss leaders.
ATT smartened up enough to get tired of losing billions on streaming. It dumped WarnerHBO via a spinoff and shotgun wedding with Discovery. The dominant partner is Discovery, the king of trash tv. It's now an open question of how long Warner Bros. Discovery can survive as a standalone movie and tv operation. Disney is losing big bucks on movies and streaming, and it is an open question of how long Disney can continue, even with cross-subsidization from the parks and merchandise sales.
We are drifting towards an endpoint at which three or four global technology companies will control all movies and tv from the initial pitch through production to distribution. And these will be the same companies that control the internet, the news media, and the social media platforms. The Borg wants complete control of electronic communications, and the Borg will operate as an arm of government.
Train wreck meets train wreck.
There was a time when horny rich dudes were able to fund movies just so they could have access to starlets. Some of those movies were pretty good because they let the director do his thing. Maybe we might get a few good movies to slip through if the tech geeks see movies as a loss leader rather than a revenue stream.
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