Reports indicate that Warner Bros. Discovery and Paramount Global are in talks to acquire each other to form another massive entertainment company – which could combine a lot of exclusive sports content – and the merged company could ultimately compete in the streaming wars.
Key Facts
Paramount Plus, a streaming platform owned by Paramount Global, and Max, a streaming platform owned by Warner Bros., have both recently struggled to build subscriber bases and compete with other streaming platforms like Netflix and Disney Plus.
While Netflix has nearly 250 million subscribers and Disney Plus has 105 million subscribers, Max has 95 million subscribers and Paramount Plus has 63 million subscribers.
Paramount’s assets include CBS, Showtime, MTV, Paramount Pictures, Nickelodeon, Comedy Central, BT, and Pluto TV.
Warner Bros. Discovery’s portfolio includes CNN, HBO, DC Comics, HGTV, Food Network, TNT, Eurosport, and Animal Planet.
Both platforms hold rights to live sports streaming, with Paramount Plus subscribers getting access to NFL games and several live soccer leagues, while Max subscribers can watch National Basketball Association season games and ice hockey, with Warner Bros. and CBS, owned by Paramount, sharing rights to National College Basketball games.
What We Don’t Know
It is unclear what the deal would mean for the news brands of both companies – as Warner Bros. owns CNN and Paramount Global owns CBS. Axios reported that the two networks could be merged to create a “global media powerhouse.”
The Big Number
More than $60 billion. That’s how much debt the two companies collectively hold as of the third quarter of 2023. Paramount reported $15.6 billion in long-term debt and Warner Bros. announced it has $45.3 billion in total debt.
Related News
On Wednesday, multiple media outlets reported that the two media companies are in talks to acquire one another. Reports indicated that Warner Bros. Discovery CEO David Zaslav met with Paramount Global CEO Bob Bakish on Tuesday in New York (Zaslav reportedly spoke separately with Shari Redstone, CEO of National Amusements, which holds a controlling stake in Paramount Global). They discussed ways to merge their streaming services in an effort to better compete with other streaming giants like Netflix, Disney Plus, and Hulu.
What This Could Mean
There is some speculation that the deal was merely a hint at how the market and the public would respond to the possibility of a merger. CNBC journalist Alex Sherman predicted that Zaslav might use this public maneuvering with Paramount to make NBCUniversal envious. NBCUniversal could be a more profitable merger for Warner Bros. than a potential Paramount deal.
Potential Challenges
The integration of the company could also be questioned by federal regulators. During the Biden administration, many mergers have come under intense scrutiny from regulators. Axios reported that Warner Bros. executives don’t seem concerned about completing the potential merger, as their company does not own a broadcast television network.
Main Background
Mergers are not a new feature in the television streaming world. Paramount and Warner Bros. have already merged with other companies individually. Last August, Paramount Plus added Showtime to its streaming services. Warner Bros. also announced last year its plans to merge the HBO Max streaming service with Discovery+. Warner Bros. has rebranded its app to Max. These streaming wars have also led to increased prices for most streaming services in recent months and, in some cases, tightening the scrutiny on account sharing among users. Warner Bros.’ streaming platform offers an “ad-free” plan for $19.99 per month. Paramount Plus raised its ad-free plan by $2 to $11.99 per month and increased its ad-supported plan by $1 to $5.99 per month.
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Warner Bros Discovery and Paramount in acquisition talks (Forbes)
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