Warner Bros. Discovery Reportedly Out on Acquisition of Paramount; Company Now Aiming to Be Acquired?

Warner Bros. Discovery shattered the normally quiet tranquility of the holidays in late December when reports emerged that the company was in talks regarding a possible merger with Paramount Global. According to a new report from CNBC, those talks are now officially dead, as WBD has walked away from the table following a disastrous fourth quarter 2024 earnings report.

• Controlling interest in Paramount is still available, and the company has other potential suitors kicking its tires.
• Comcast has confirmed that it does not have an interest in acquiring Paramount, but could still work with the company in commercial partnerships.
• Some insiders believe WBD is aligning its own affairs for a potential sale in the future.

WBD is still carrying a debt load of around $40 billion stemming from the merger of WarnerMedia and Discovery in 2022, which made many analysts dubious that its pursuit of Paramount would lead to anything in the first place. Those prognostications are now a reality as CNBC reports that WBD is officially “pencils down” on the merger, despite talks heating up a bit in January.

This is not the end of the road in Paramount’s quest to find a buyer. Controlling interest in Paramount Global is still for sale, and David Ellison’s production company Skydance Media is still exploring the possibility of lodging a bid. Byron Allen of Allen Media Group has already registered a bid which has not yet been pulled off the table.

Paramount has been trying to streamline itself in order to make the company more attractive to potential buyers. The company recently announced a round of 800 job cuts, including the entire staff of the kids streaming platform Noggin, which will reportedly be sunset in the next few months.

Is WBD Preparing for a Potential Sale, As Well?

If Paramount doesn’t find a buyer soon, it may no longer be the only legacy media company on the market. Speculation is increasing that WBD could be trying to make itself more attractive to prospective buyers as well, as it is about to emerge from the legally mandated two-year moratorium on mergers and acquisitions following the WarnerMedia and Discovery combination in 2022.

According to Matt Belloni of Puck News — whose discussions of WBD’s financial struggles were shared on X (the social media platform formerly known as Twitter) by fellow Puck analyst Dylan Byers — just about the only metric that WBD CEO David Zaslav has managed to improve for the company is its free cash flow, which coincidentally determines the level of bonuses to be paid out to him and other high-level executives.

What a disaster $WBD

via ⁦@MattBelloni⁩’s What I’m Hearing… pic.twitter.com/Y9w05E1WQ9

— Dylan Byers (@DylanByers) February 26, 2024

A report from Variety discussing WBD’s recent outlays on its theatrical slate could also point to the company aligning itself for a potential sale. The report outlines WBD’s new output deal with Tom Cruise, whose films “Top Gun: Maverick” and “Mission: Impossible - Dead Reckoning” have been financial bright spots for the otherwise still-recovering cinema business, as well as their pursuit of the rights to Quentin Tarantino’s next film. According to one insider who spoke with Variety, WBD is trying to acquire such assets in the name of making itself more attractive to buyers.

“The strategy at Warner Bros. right now and the reason they made some of these big star deals is they’re basically playing with other people’s money,” the insider said. “They’re shopping for Quentin or Cruise with the notion they can use it as a shiny object that is going to be additive when Zaslav sells the company.”

The next year could be a wild ride in Hollywood. Legacy media companies are still grappling with the economics of streaming and the continuing decline of their linear TV channels, and it seems likely that some are not going to survive. It’s hard to predict which companies will continue and which will be merged with other firms; Paramount is definitely up for sale at the moment, and it may be joined by Warner Bros. Discovery before long.