The media landscape has changed drastically in just the last decade as streaming platforms became a new battleground for studios. A few years ago, we even lost one of the major studios when Disney purchased 20th Century Fox, and now it looks like we may be in for that again, as it's being reported that Warner Bros. Discovery and Paramount Pictures are discussing a merger.
Axios was the first to report on the meeting, but other media outlets have since confirmed that it happened. According to the report, Warner Bros. Discovery CEO David Zaslav has spoken to Paramount CEO Bob Bakish, as well as Paramount's parent company head Shari Redstone, about a potential merger. WBD has reportedly hired bankers to explore the financial side of the deal.
Needless to say, this would be massive if it were to happen. Not only would a merger of WBD and Paramount shrink the total number of major studios, but it would also create a huge media company.
While the report makes it clear that talks are in very early stages and may not ultimately result in a deal at all, the fact that talks are even happening is a big sign. WBD is the bigger dog in the merger, with a valuation around three times that of Paramount. So while this may technically be a merger, it would likely be a case of Warner Bros. Discovery buying Paramount. It's also being suggested that WBD could buy all of National Amusements, Paramount's parent company.
Such a merger raises a lot of questions, the first being whether could it really happen. Such a merger would certainly draw the eye of antitrust regulators, and the government would have something to say about such a merger. Having said that, as Axios points out, a merger of these two companies likely has a better shot at success than other major media companies because WBD doesn't own a broadcast network currently.
That would certainly be the biggest change to the status quo, as it would give the new company, likely with WB in control, one of the big TV networks in CBS. While most media companies seem to be focusing on streaming rather than traditional networks, with Disney even suggesting it might sell its traditional networks, network ad revenue is still a viable revenue stream.
When Disney bought Fox, it kept the movie studio itself, changed the name to 20th Century Studios and made it a brand, not unlike Marvel Studios or Pixar, under the larger Disney umbrella. Would we see that happen in a newly merged WB/Paramount? Would both Warner Bros. and Paramount continue to exist as studios under the new larger company, or would one of them completely disappear? That would be a lot of lost history. Paramount is 90 years old and WB celebrated its 100th anniversary this year.
There are a few places where consolidation would happen. Most notably, we would almost certainly see Max and Paramount+ merge into a single streaming service, which would instantly become a bigger player in the growing streaming landscape than either platform currently is separately.
If a Paramount/WB merger doesn't happen, another big question is going to be, what then? If David Zaslav is on the hunt to acquire more, could he make overtures at other media companies? There are certainly reasons that a Paramount merger could be attractive to both sides. Paramount is dealing with a debt load that a deal like this would alleviate.
While it's too early to tell how real this possibility is, a merger between these two studios would be a titanic shift in the industry. We'll certainly be keeping our eye on the future. There was a time when it didn't seem real that Disney could buy 20th Century Fox, but that happened, and so could this.
