Multiple media outlets have reported that Warner Bros. Discovery and Paramount Global are currently in preliminary discussions over a potential merger. CBS News and the company that is responsible for the Mission Impossible films would form a partnership with the owner of the HBO networks and CNN if the agreement were to be finalized.
By entering into this agreement, two of Hollywood’s “Big Five” companies would be brought together. The combined market value of Warner and Paramount would be thirty billion pounds (38 billion dollars). It is considered that negotiations are still in the preliminary stages, and it is possible that a deal will not be reached.
According to the news website Axios, Warner chief David Zaslav and Paramount boss Bob Bakish met for lunch in New York this week to discuss the possibility of a deal being struck between the two companies. Because of the proliferation of streaming services, traditional media businesses have been forced to make rapid investments in order to remain competitive with streaming services such as Netflix, Amazon Video, and Apple TV.
Both Warner and Paramount have been forced to make significant cuts to their expenses in order to reduce the losses that they have incurred from their video streaming services, which have reached into the billions of dollars.
Consequently, their stock prices continue to trade at a level that is far lower than the highs they reached in the early days of streaming. It has been reported by Axios that the senior executives of both companies explored the possibility of merging their respective streaming services, Paramount Plus and Max (formerly known as HBO Max), in order to better compete with its competitors, Netflix and Disney Plus.
As a result of the significant amounts of debt that it has accumulated over the past few years while simultaneously expanding its streaming service, Paramount is under a great deal of pressure to find a buyer or a strategic partner. According to analysts, Warner Bros., the firm that is responsible for the blockbuster film Barbie that was released this year, has a somewhat better cash position. This is mostly due to some strategic mergers.
