The American companies Warner Bros. Discovery and Paramount Global are discussing a merger, but its specific form has not yet been determined. Referring to sources, foreign media reported on this on Wednesday, the companies themselves did not comment on it. The merger would bring two of Hollywood’s five major film studios under one roof, the BBC reported.
The sources do not mention the value of the possible contract. The combined market capitalization of both companies on Wednesday amounted to roughly $38 billion (CZK 850 billion). According to the sources, the negotiations are at an early stage and no merger may eventually take place at all, the Reuters agency pointed out.
Several hour meeting
According to sources, the head of Warner Bros. Discovery, David Zaslav, discussed with the head of Paramount Global, Bob Bakish, about the potential connection of the activities of the two companies. Axios drew attention to the meeting, citing multiple sources. According to them, Zaslav also negotiated with the head of National Amusements (NAI) Shari Redstone, whose company has control over Paramount Global. According to sources, the meeting between Zaslav and Bakish lasted several hours.
In addition to the famous Warner Bros. film studio, the Warner Bros. Discovery portfolio also includes the film channels HBO, Animal Planet, and CNN news, while the Paramount Global portfolio includes the Paramount Pictures film studio, MTV music channels, Nickelodeon children’s programs, and the CBS news program.
It is not yet clear whether Warner Bros Discovery would buy Paramount Global or its parent company NAI. According to Axios, both options are on the table. Media company National Amusements owns 77 percent of Paramount’s Class A voting shares.
Warner Bros. Discovery was formed last April when WarnerMedia – until then part of the American telecommunications giant AT&T – merged with Discovery. Warner Bros. Discovery also includes the streaming services Discovery+ and HBO Max or the Batman and Harry Potter franchises.
Who is the biggest rival?
The ability to stream shows meant that traditional media companies had to invest quickly in order to compete with streaming platforms such as Netflix, Amazon Video or Apple TV. Warner Bros. Discovery and Paramount have had to cut costs significantly to mitigate losses that are already running into the billions of dollars from their streaming services. As a result, their stock prices continue to trade well below the highs they hit in the early days of streaming.
Bloomberg also reported Wednesday that Paramount is in talks to sell its Black Entertainment Television cable network to a group of investors. However, other reports have also appeared, according to which interested parties are circling Paramount. Paramount’s market value on Wednesday was $10.5 billion, but the company has long-term debt of about $15.6 billion.
The American entertainment industry has been crippled this year by strikes by actors and writers, mostly related to wage conditions working for streaming services. According to the artists, these conditions are significantly worse than they were for traditional television productions.
source: čtk
