Warner Bros. and Paramount Just Met to Discuss a Possible Mega Merger The two media titans want to consolidate to take on Netflix and Disney+.
Key Takeaways
- Warner Bros. Discovery and Paramount are in preliminary merger discussions.
- The companies both face significant debt situations.
- The merger would be a game changer.
Opinions expressed by Entrepreneur contributors are their own.
In a meeting that's shaken the media world, Warner Bros. Discovery CEO David Zaslav and Paramount CEO Bob Bakish had lunch at Paramount's Manhattan headquarters today to discuss a possible merger, according to multiple sources.
Zaslav is also said to have met with Shari Redstone (daughter of Sumner), who owns Paramount's parent company, National Amusements Inc (NAI).
The landmark deal would create a news and entertainment colossus—but there would also be some challenges.
Warner Bros/Paramount would be a "behemoth with an awful lot of debt. There's no question about it," William Cohan, Puck News Founding Partner, told Yahoo Finance.
Why the merger?
Paramount Global, known for its movie studio and TV network CBS, has substantial debt ($15 billion) and needs to make a strategic move to compete with monster companies such as Netflix and Disney. Conversely, Warner Bros. Discovery needs to make a big play following its 2022 fusion of Warner Media and Discovery. Under Zaslav's leadership, the company has been meticulous in cutting costs and making money. For example, its streaming operations have turned profitable. But Warner Bros. Discover is still $43 billion in debt.
According to reports, Warner Bros. Discovery is also in talks with Comcast's NBCUniversal.
Stock market reacts
Wall Street did not appear to be impressed with the talks.
Warner Bros. Discovery's shares ended down 5.7%, falling another 1.4% in after-hours trading. Meanwhile, Paramount's stock rose initially during the first hours of the news, but dropped 1% by the end of the day.
