The world of cinema is on edge: Warner Bros. and Paramount could merge

During last night, the news broke: two giants of entertainment and communication were considering a merger to compete on equal terms with the giants in the coming decades. We are talking about Warner Bros. Discovery and Paramount Global.

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If you like movies it’s impossible not to know them, since both actors are responsible for some of the best sagas and movies in history. Paramount, for example, is one of the pillars of Hollywood since 1912.

This movement, which we will now explain, would mean that two very important actors are joining forces to face an uncertain future in an industry that is not going through its best moment.

For now, they are just conversations between two giants of cinema

The CEO of Warner Bros. Discovery, David Zaslav, met with the CEO of Paramount Global, Bob Bakish, at a lunch held on Tuesday in New York where they discussed a possible merger, as reported last night by Variety.

Zaslav has also spoken with Shari Redstone, whose National Amusements Inc. holds a majority stake in Paramount Global, about a possible combination of the companies.

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And while it was not possible to know the terms of a possible merger of the companies, both companies have hired bankers, but the state of the conversations is described as very preliminary.

At the end of the third quarter, Paramount Global had a long-term debt of 15.6 billion dollars, considerably less than WBD, whose debt amounted to 43.5 billion dollars.

But in terms of market value, Warner Bros. Discovery is the bigger fish, with a market capitalization of $28.4 billion, compared to Paramount Global’s $10.3 billion.

A completely historic union at the franchise and saga level

Warner Bros. Discovery and Paramount would be trying to pool their assets, which span television, film, sports, and streaming, to gain greater scale and operational efficiency.

Specifically, WBD and Paramount would be interested in combining their premium streaming services Max and Paramount+ to better compete with Netflix, Disney+, and Hulu.

Regarding the cinema, Warner Bros. Discovery would acquire top-tier properties from Paramount Pictures, including film franchises such as: Terminator, Transformers, Mission: Impossible, Top Gun, A Quiet Place, Teenage Mutant Ninja Turtles, The Godfather, Paranormal Activity, Scream, and Star Trek.

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Warner Bros. Pictures, on the other hand, includes the films from the DC Extended Universe and the cinematic franchises of Harry Potter and The Lord of the Rings.

It is expected that the merger of Warner Bros. and Paramount Global will also combine their television operations. Warner Bros. Discovery’s cable lineup includes CNN, HBO, TNT, TBS, Discovery Channel, Cartoon Network, Food Network, HGTV, TLC, and others. Paramount’s networks include CBS, Comedy Central, MTV, Nickelodeon, and BET.

A sector that doesn’t stop buying and merging to survive

Also this week, media mogul Byron Allen reached out to Paramount’s top executives to extend a $3.5 billion offer to purchase BET Media Group, which includes BET, VH1, and the BET+ streaming service.

Warner Bros. Discovery was formed after Discovery Inc. acquired WarnerMedia from AT&T, a transaction that was completed in April 2022. And Paramount Global is the result of the merger between CBS and Viacom that was completed in December 2019.

Sources said that top executives at Warner Bros. Discovery felt they had to move sooner rather than later to engage in talks with Paramount Global. There is no longer room for big companies, now there is only space for giants.