The head of Warner Bros. Discovery's David Zaslav and Paramount Global CEO Bob Bakish met in New York and discussed a possible merger agreement.
Zaslav and Bakish discussed a possible deal at Paramount's offices this week, according to three people familiar with the matter. Negotiations are still at an early stage, so a deal may not happen. One of the sources also said that Zaslav's conversation was more of an expression of interest than an offer.. Billionaire Shari Redstone, who controls Paramount, has also held preliminary talks with Skydance, the production company run by David Ellison.
Why Warner Bros. and Paramount merger agreement?
According to Axios, the rise of streaming platforms has forced traditional media companies to quickly invest in the new direction to compete with Netflix, Amazon Video and Apple TV. Warner and Paramount have their own streaming platforms Max (formerly HBO Max) and Paramount Plus, respectively. Due to their unprofitability, companies were forced to significantly reduce costs. As a result, their share prices continue to trade well below their highs. That is why it may be about the merger of Max and Paramount Plus to better face competitors — Netflix and Disney+. Also, according to media information, thanks to the movie «Barbie» Warner Bros.. is currently in a more advantageous position, with Paramount under severe pressure from the level of debt it has accumulated in recent years as the streaming service expands.
Last year, AT&T's WarnerMedia and Discovery units merged to form Warner Bros Discovery, whose portfolio includes the Discovery Channel, Warner Bros. Entertainment, CNN, HBO, Cartoon Network and franchises such as Batman and Harry Potter. Media reports indicate further consolidation in the industry.
Netflix currently dominates the streaming platform market, adding 5.9 million subscribers worldwide from March to June 2023 and 8.8 million from July to September, according to Statista. In total, the number of Netflix users is 247.15 million. By comparison, the total number of Paramount Plus subscribers is 63.4 million, and Warner Bros. Discovery — 95 million as of November 2023.
We remind you that in 2019, Disney bought 21st Century Fox for $71 billion to create a competitor to Netflix. Later, this is how Disney+ appeared.