Paramount Skydance is preparing a majority cash bid, through an investment bank, for Warner Bros Discovery, backed by the Ellison family, the Wall Street Journal reported on Thursday, citing people familiar with the situation. The Ellison family is interested in acquiring the entire company, in line with his strategy of doubling down on both streaming and traditional TV, the people with knowledge of the plans said. Shares of Warner Bros surged nearly 30% while Paramount was up 7% after the news. A bid has not yet been submitted and the plans could still fall apart, WSJ said. Representatives for Paramount and Warner Bros. Discovery declined to comment..
A bid could come as early as next week, CNBC’s David Faber reported. Shares of Warner Bros. Discovery closed Thursday at $16.15, or up more than 28%, the stock’s best day ever. The company’s stock rose after the initial report from the the Wall Street Journal that the recently merged Paramount Skydance was preparing a takeover bid. Shares of Paramount Skydance closed up about 15%.
Warner Bros. Discovery recently announced plans to separate its global TV networks business from its streaming business and studios. Earlier this week, WBD CEO David Zaslav said at an investor conference that the planned separation would likely be completed by April. The streaming and studio assets would be renamed Warner Bros., while the global TV networks business — which will own a suite of pay TV networks including TNT and CNN — will be Discovery Global. While WBD executives said in June that each company would be “free and clear” to do deals following the split, a bid before the separation would have to be for the entire company, one of the people said.
A merger between Paramount Skydance and Warner Bros. Discovery would create a media behemoth with a huge portfolio of pay TV networks, a sprawling range of sports rights and two major film studios. Paramount Skydance owns broadcast network CBS, as well as pay TV networks like BET, MTV and Nickelodeon, and streaming service Paramount+. Its film studio is known for movies like “The Godfather,” “Top Gun,” and “Forrest Gump.” Paramount Skydance is the result of an $8 billion merger that was announced last year and received regulatory approval in August to move forward after a lengthy delay.
With the exception of a broadcast TV network, WBD has similar assets, a result of its own merger in 2022 between Warner Media and Discovery. The company owns networks like CNN and TNT, as well as HBO and streaming service HBO Max. Its Warner Bros. film studio also has a historic track record, and owns the intellectual property to franchises like “Harry Potter,” DC Comics and “The Lord of the Rings.” Both companies have a long list of major sports rights, too, the marquee content for all traditional TV and streaming platforms. A merger would put the likes of the NFL, MLB, an array of college football and basketball, and other major sports under one roof.
Any deal would require the blessing of the Trump administration, which has put media companies under the microscope since Inauguration Day. Brendan Carr, the chairman of the Federal Communications Commission, approved Skydance’s merger with Paramount this summer only after Mr. Ellison agreed to appoint an ombudsman for CBS News and committed not to restart the company’s diversity, equity and inclusion program.
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