Paramount and Warner Bros. Discovery Merger

And so it begins…

Following Paramount’s recent announcement that it’s rebranding its Showtime linear channel, Adweek heard from ad industry experts that more consolidation is on the way. But no one was expecting an Axios report late Wednesday that Warner Bros. Discovery CEO David Zaslav and Paramount Global CEO Bob Bakish had met to discuss a possible merger.

A deal between Warner Bros. Discovery and Paramount could have far-reaching implications throughout the media landscape, with Paramount’s movie studio and CBS broadcast network potentially coming under the WBD umbrella, not to mention another major streaming rebrand on the horizon.

The discussions are preliminary, so nothing may come from it. Warner Bros. Discovery and Paramount haven’t commented on the situation.

However, as various reports note, tax laws could allow Warner Bros. Discovery to forge a deal before the two-year anniversary of its 2022 merger, which it completed just ahead of the TV upfront. But would WBD, which has around $45 billion in debt, want to take on another $15 billion in debt from Paramount?

With several assets hanging in the balance (and the balance sheets), industry insiders took on some of the biggest lingering questions.

What does this mean for the industry?

Two of the five major studios merging will undoubtedly have ripple effects throughout media and entertainment, with each company receiving major benefits.

“For WBD, this will be an incredibly valuable and complementary acquisition,” Ruben Schreurs, Ebiquity’s chief strategy officer, told Adweek. “Together, their content is incredibly vast and diverse, and they may start making more exclusivity plays that would impact the other streaming services currently licensing their content.”

Experts noted each company’s assets, including WBD’s studios and cable networks and Paramount’s studios and broadcast network, even its Yellowstone franchise, could work well together.

“Such unification would also bring together two massive content libraries and distribution networks that complement each other well: WBD’s international distribution footprint could be used to enhance the global reach of Paramount’s franchises,” said Tony Marlow, CMO of LG Ad Solutions. “Conversely, Paramount’s strong children’s programming assets could bolster WBD’s streaming ambitions.”

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