Paramount, others seek to buy Warner Bros. Discovery

Friendly regulatory climate, urge to compete with streamers fuels merger talk

The future of Warner Bros. Discovery appears to be headed in two directions: a split or an outright takeover by another media company. It’s clear that Paramount head David Ellison, whose Skydance bought the company last year, is looking for more.

That’s what media observers are looking at, as Paramount recently made a bid for the entire company, as WBD has rebuffed Ellison three times in the last two weeks with an offer for nearly $24 per share comprised of 80 percent cash.

WBD originally planned to split the company into two, but on Tuesday, announced it was putting the entire company up for sale as it received “unsolicited interest” from potential suitors. WBD still plans to split the companies, but it is unclear whether they will do that first or sell each spun-off company, as selling them is better for tax purposes. The split is not expected to be finalized until next spring.

“We continue to make important strides to position our business to succeed in today’s evolving media landscape by advancing our strategic initiatives, returning our studios to industry leadership, and scaling HBO Max globally,” CEO David Zaslav said in a statement. “We took the bold step of preparing to separate [Warner Bros. Discovery] into two distinct, leading media companies, Warner Bros. and Discovery Global, because we strongly believed this was the best path forward.”

Companies rumored to buy all or part of WBD include Comcast, Apple, and Amazon, but observers believe Paramount would have the inside track. 

This is nothing new – the then-named Paramount Global had considered merging with WBD nearly two years ago, but backed off. With Ellison now in charge and his father Larry’s strong ties to the Trump administration, a deal may encounter fewer regulatory obstacles than it would under a different presidential administration.

If Paramount buys all of Warner Bros. Discovery, it would own one of the largest film and TV libraries in the world, with two motion picture studios, streamers Paramount Plus and HBO Max, dozens of cable networks (including MTV and CNN), CBS and its owned stations, and iconic animation properties ranging from SpongeBob to Bugs Bunny. 

Paramount Skydance has made numerous moves since the younger Ellison took over. He installed Free Press editor-in-chief Bari Weiss as head of CBS News and bought the conservative news outlet for $180 million. Paramount acquired rights to UFC in a “lucky seven” deal worth $7.7 billion over seven years starting in 2026. The company is shuttering five MTV cable channels in the UK, Ireland, and other places in Europe as cord-cutting continues, and “paused” two BET Award shows. 

Paramount is expected to start laying off 2,000 employees in the U.S. by the end of this month, and more layoffs may occur if it acquires WBD.

Warner has undergone several corporate ownership changes in recent decades, from Seven Arts to Time Warner, from AT&T to Discovery. The company acquired Turner in 1996 and had a disastrous merger with AOL in 2000. This latest transformation of the studio founded by brothers Jack, Sam, Harry, and Albert Warner in 1923 will be the biggest one yet, as whatever happens, there will be changes, and Hollywood and the media business will not be the same.