Warner Bros in talks to merge with Paramount Global, sources say

Warner Bros Discovery held talks on a possible merger with Paramount Global, potentially combining two of the biggest media companies in the world, according to people with knowledge of the matter.

The talks are preliminary and may not lead to an agreement, said one of the people, who asked not to be identified because the discussions are at such an early stage.

David Zaslav, CEO of Warner Bros Discovery, met Bob Bakish, his counterpart at Paramount Global, on Tuesday in New York to discuss a possible deal, Axios reported earlier. He has also spoken with Paramount chair Shari Redstone, whose family company owns a controlling stake in Paramount, the owner of CBS and other television properties.

A combination of the companies would unite famous Hollywood properties, including the Paramount and Warner Bros film and TV studios, and put a number of pay-TV and broadcast stations, such as HBO and CBS, under a single roof.

A merger of the two large media companies is likely to face intense scrutiny by federal regulators who have challenged numerous combinations under the Biden administration. According to Axios, Warner Bros executives say they could complete such a merger because their company does not own a broadcast network like Paramount’s CBS.

Both companies have struggled as consumers have cancelled cable-TV subscriptions in favour of a new generation of streaming services. The streaming businesses are expensive to run, and have not made up for shrinking profits at traditional networks. Programming costs, especially for sports, have been escalating.