The ink is barely dry on the paperwork that put Paramount under the purview of those mavericks (pun intended) from Skydance when we learned yesterday that was apparently merely step one on the way to global domination. THE WALL STREET JOURNAL’s well-wired Jessica Toonkel dropped this hot coal onto the media pyre yesterday afternoon:
Paramount Skydance PSKY 15.55%increase; green up pointing triangle is preparing a majority cash bid for Warner Bros. Discovery WBD 28.95%increase; green up pointing triangle that is backed by the Ellison family, according to people familiar with the situation.
The bid will be for the entire company, including its cable networks and movie studio, the people said. Warner said late last year it planned to restructure into two operating divisions, one focused on the legacy cable-television business and the other on streaming and studios.
Warner Bros. had a nearly $33 billion market capitalization early Thursday, prior to The Wall Street Journal’s report on the potential bid, more than double that of Paramount Skydance. A bid hasn’t yet been submitted and the plans could still fall apart.
It’s not like we haven’t seen a pas-de-deux like this before. When the Ellisons’ seasoned media czar Jeff Shell was running Comcast he had deeply explored a merger with Warner; after all, his counterpart David Zaslav has a long history serving Shell as a top dealmaker prior to his annointing with Discovery. And heck, we had already all but telegraphed the possibility of this coming to pass during our year-end predictions and wishes, where we actually went out on a limb and boldly declared this:
COMCAST. WARNER BROTHERS DISCOVERY. PARAMOUNT GLOBAL. AT LEAST ONE OF THESE WON’T EXIST AS WE KNOW IT TODAY A YEAR FROM NOW.
Admittedly, we’re a long way from anything being a fait d’accompli. DEADLINE’s troika of Jill Goldsmith, Dominic Patten and Ted Johnson tried valiantly to damp down the fire-stoking:
Ellison has been looking at Warner Bros for awhile,” an individual close to Paramount brass told Deadline this morning. “Nothing new there, he’s just taking a closer look, assessing the pros and cons.”
And:
(T)he combination of Warner Bros. Discovery and Paramount is the type of horizontal merger typically draws Justice Department scrutiny, as it has the potential to take competition off the board. In this case, it would put two legacy studios, Warner Bros. and Paramount, under the same owner. And while the Antitrust Division is typically free of political interference, all bets are off in this administration.
And that’s exactly the reason why I’m all but preparing a “toldja” dance on this particular Nostra-dumb-ass call. There’s way too many reasons for this happening for anything as silly as existing laws to stand in the way of progress.
For one thing, that supposedly overwhelming price tag based on Warner’s capitalization is mere peanuts for the Ellison clan. Just this week it was learned that pere Larry’s net worth was $363 billion, briefly edging ahead of Elon Musk for the title of Richest Dude In The World. Put in perspective, that same proportion of investment based on my current net worth would be spluring for an iced pecan oat milk crunch latte this morning (admittedly my new addiction).
For another, as OBSERVER’s occasionally astute Brandon Katz meticulously detailed in a fact-laden piece authored on the very heels of Toonkel’s missive, there’s way too much upside for all parties concerned:
Growing a content library for the sake of volume without any consideration for audience fit is like trying to explain the third act of Tenet to your grandmother—it’s just not going to make sense. But on paper, a combined entity would be armed to the teeth with top-notch brands and talents. A WBD-Paramount merger would trigger an intellectual property field day with DC, Harry Potter, Game of Thrones, Dune, Lord of the Rings, The Conjuring, Top Gun, Mission: Impossible, Transformers, Sonic, A Quiet Place and Star Trek under the same corporate parent. Cartoon Network, which the current WBD leadership downsized, might live once more alongside Nickelodeon as an irresistible one-two punch in kids media (or get sold off). Imagine no longer fretting about your overall TV slate because proven hitmakers Chuck Lorre, Taylor Sheridan and Bill Lawrence all work in-house on existing deals.
WBD and Paramount collectively accounted for just over 13 percent of total U.S. TV usage (broadcast, cable, streaming) in July, trailing only YouTube, according to Nielsen’s Media Distributor Gauge. If we examine combined streaming catalog demand shares, which account for all original and licensed films/TV series on-platform, in the U.S. across 2024, we get a No. 1 ranking at 23.4 percent, according to Parrot Analytics. Even accounting for overlap across both services, the combined customers of WBD (122.3 million worldwide streaming subscribers between HBO Max and Discovery+) and Paramount+ (79 million) would pack a punch.
And as no less than a quartet of FRONT OFFICE SPORTS contributors–—Ryan Glasspiegel, Eric Fisher, David Rumsey, and Colin Salao–observed in their newsletter that also dropped yesterdy afternoon, the potential sports synergies are staggering:
If a merger between Paramount and WBD eventually closed, their combined sports offerings would rival and perhaps even surpass ESPN for the most comprehensive collection in the industry. Paramount and CBS have rights to the NFL, The Masters, PGA Championship, PGA Tour, Big Ten football and basketball, Champions League, and, as of next year, every UFC event. TNT has MLB rights that include two full playoff rounds, half of national NHL games (split with ESPN), some Big 12 football and basketball (sublicensed from ESPN), and College Football Playoff games (also sublicensed from ESPN, with an expansion happening next year). It also has packages in NASCAR, Unrivaled, the French Open, Big East basketball, and AEW. Significantly, Paramount and WBD also share the full rights to the men’s basketball NCAA tournament.
All of that may pale to the biggest dangling chad: bringing together at long last the legacies and resources of CBS NEWS and CNN, a move that has been discussed and contemplated since Ted Turner and Larry Tisch first bandied it about in the 80s. And in the wake of Paramount’s hiring last week of “ombudsman” Kenneth Weinstein to make sure those naughty folks at CBS NEWS treat the current administration with the fealty it seeks, having those truly egregious “fake newsers” under the same thumb would no doubt be an appetizing carrot to dangle in front of those who might otherwise get in the way.
And if any more catnip needed to be added, look at who to what degree this news pissed off a true favorite of said current adminsitration, as THE WRAP’s Loree Seitz noted this morning:
Just hours after news broke that the Ellison family is preparing a bid to acquire Warner Bros. Discovery, Sen. Elizabeth Warren (D-MA) said a potential merger between Paramount and Warner Bros. Discovery “must be blocked.”…the Democratic senator from Massachusetts warned that the company acquiring Warner Bros. Discovery as well would be a “dangerous concentration of power.”
Ticking off the one now dubbed “Fauxcohontas” may be appealing enough on its own to make this deal sail through whatever “roadblocks” might occur. And ya gotta admit there would be ratings upside for CNN daytime for any Congressional hearings where Ms. Warren could once again stamp her feet hoping to make it rain.
Trying to make CNN both profitable and relevant has been a major source of agita for our friend Yosemite Zas. He’s never truly wanted much more than the largesse and lifestyle anyhow, and he’s already gotten Bob Evans’ mansion and a yacht moored next to Jeff Bezos’ for his troubles. Being able to take his share of some of Larry Ellison’s spare change and spend more time on that boat is motivation enough for him to be sympatico with any demands that might be put on him.
Based on all of the above, not to mention my confidence in someone like Shell being able to handle the fine print details, I’m a tad more bullish than others on this happening. And I’ll hope Zas saves us a lounge chair.
Until next time…
1 thought on “Between A Rock And a REALLY Hard Place”
Steve Leblang delivers another sharp and entertaining take on the ever-shifting media landscape 🎬💥📈. His breakdown of Paramount Skydance’s bold play for Warner Bros. Discovery connects the financial muscle of the Ellisons, the strategic content synergies (from Harry Potter to Top Gun 🚀⚡), and the political theater surrounding antitrust concerns 🎭🇺🇸. What makes this post shine is the way it blends humor, history, and hard numbers—turning complex dealmaking into a compelling narrative. Definitely one of the smartest media insights out there right now.
#MediaMergers
#Paramount #WarnerBrosDiscovery #StreamingWars #EntertainmentIndustry