Why a Paramount-Warner Bros. Discovery Merger Makes Sense

Paramount, which has just emerged from the merger of Skydand with an $ 8 billion, to combine the way to become a new generation media giant, Warner Bros. He seems ready to attack Discovery.

David Ellison, the new CEO of Paramount, is reported to have prepared a majority cash proposal for all assets of WBD, including cable networks and film studio. According to The Wall Street Journal, Oracle’s founding partner Larry Ellison-David’s father and the richest man in the world would be crowned.

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The Warner Stock closed by about 30% at the end of the trading session on Thursday, while the paramount increased by more than 5% and both companies reached $ 17.24 and $ 87.89 per share. Representatives of Paramount and Warner Bros. Discovery avoided commenting.

A potential agreement will give an increasing content arsenal at a time behind Netflix and Disney in the scale and flow wars that are highly needed. The new company will have a total of 203.4 million flow subscribers from the last figures in the second quarter of 2025 – this is shy of 207.4 million in Disney+, Hulu and Espn+ in the last quarter of Disney. Reaching numbers that could compete with Disney and Netflix has been a long goal of Warner Discovery CEO David Zaslav.

Paramount is also Warner’s Warner Bros. The television and feature film band, DC Studios, HBO and HBO Max, Discovery+, a series of cable networks and Burbank, California and Leftsen, including the UK construction studios, including other media businesses will be able to touch its major asset portfolio.

The CBS Network, including Paramount+ and Pluto TV, including Paramount Pictures and Studio, and Pluto Central, including cable networks such as Comedy Central, MTV, Bet and Nickelodeon.

In addition, companies would have more powerful bargaining power and great cost savings with advertisers, distributors and abilities. Paramount, layoffs, real estate portfolio, and the transformation of the technological infrastructure of the transformation of more than $ 2 billion deducted deductions on the merger.

Lloyd Greif, the President and CEO of Los Angeles -based investment company Greif & Co., said to Thewrap, “This is a great move,” he said. “Everyone knows that Larry Ellison has the ability to remove it. So, of course, this is a mini and Warner whale, even though it is a whale.

Bringing the two media companies together would have further launch David Ellison into the upper strata of the power players in the entertainment world, and had just entered the unification of Skydance with Paramount.

Aaron Meyers, General Manager of Qualia Advisors, will crown it for Ellisons, crowning an efforts to build a new generation Hollywood major, ”he said. “For David Zaslav, it can provide a strategic exit after years of cost reduction and debt management.”

However, Hollywood understood the possibility of losing another big studio. “There are 20 percent less to be sold. Finding the next Jordan Pele, the next Daniels [Daniel Kwan and Daniel Scheinert] – The threshold is becoming more and more difficult. ”

“And is it liberated for everyone? Is it trying to buy Apple Universal?” The executive suggested that the sparse details of the leak on Thursday proposed a trial balloon instead of a serious offer.

“If I wanted to do RAR and test the market, it was very successful today,” he said.

However, even if a agreement made, Howard Homonoff, a strategic consultant to media and technology companies, told Thewrap, General Manager of Homonoff Media Group, that many important strategic problems were not answered. First, the United Company may be exposed to too much cable network at a time when this business is in a fall. It is also unclear whether combining Paramount+ and HBO Max with a heavy -stroke Netflix flow.

“This is a larger player, but he leaves many questions about what the growth strategy is for future investors, Hom Homonoff said.

Nevertheless, the chances of increasing companies’ access and scale may be worth the risk.

The movement of Ellison’s movement, the Media Giant, led by Zaslav, comes to the division of the Discovery Network (Discovery Global) and Studios and Flowing Businesses (Warner Bros.) in the mid -2026. Moffettnathanson analyst Robert Fishman said that a bid can prevent WBD’s potential bids for separation and studio assets.

Fishman said on Thursday to the customers with a note, “Now Rivals a position to secure the entire company before choosing the most attractive assets cherry,” he said. “Perhaps considering the last success in the closure of the most important process, the regulatory team may be more likely to cleanse the regulatory team.”

Among the potential opponents of Fishman, Comfort and Apollo Global Management and Sony Pictures Entertainment, who are currently in their transformation from Network assets, have already shown tires in Paramount before the acquisition of Ellison.

Comcast, Apollo and Sony’s spokesman was not available to comment.

Greif also did not exclude the possibility of a large technology player, such as Apple, Amazon, Google or other private capital companies.

“Warner Brothers is an extremely attractive asset. “The division would definitely suffer a feeding frenzy. This movement is trying to catch everyone with flat feet, but you cannot catch anyone with flat feet for a long time.

Although an agreement can be made, there will be significant difficulties for Ellison to overcome it if it ultimately gives an offer.

The challenges include WBD Paramount’s $ 35.6 billion to pay $ 15.5 billion on its own.

Experts also do not exclude potential antitröst, regulatory or political examination from Trump administration and other MPs. Senator Elizabeth Warren hit a potential connection as a “dangerous power concentration ve and warned that it should be“ prevented ..

Meyerson, “Organizers broadcast (CBS), cable news (CNN), Sports Rights and (the Ministry of Justice) more challenging directives and less FCC will coincide in the flow within the scope of FCC,” he said. “A brave swing with real industrial logic, but the risks of political and financial implementation are equally large.”

However, any agreement will probably be supported by the deep pockets of Elder Ellison, which is probably the net value of $ 367.2 billion. And considering the $ 7.7 billion offer to obtain Paramount’s UFC rights, they showed that they were willing to get rid of any expense if the Ellison gave them a competitive advantage. On the regulatory front, the Ellison did a lot of work to gain goodness with Trump, which could alleviate regulatory concerns.

There is also the question of whether Zaslav is ready to deliver the reins, but for the first time, the merger with paramount is not mulled. Ultimately, if the offer is rich enough, it may not be connected to it.

“There will be pressure to move for the benefit of the shareholders, Gre said Greif. “If the agreement is considered as an attractive price, it is an agreement that Zaslav has a position after the closing, or whether he will smile at a happy temporary retirement and will be temporary retirement.”

Sharon Waxman contributed to this story.

Writing Why Paramount-Warner Bros. Discovery merger logical | Analysis first appeared Thewrap.