Perhaps the next big entertainment agreement is approaching.

According to a source who spoke with The Hollywood Reporter, Paramount Global CEO Bob Bakish and Warner Bros. Discovery CEO David Zaslav met this week.

The sources stated that although it was “very, very early” in the talks, the moguls discussed the idea of a merger between the companies. WBD and Paramount representatives declined to comment. The meeting was initially reported by Axios.

READ MORE: There Are Rumors That Paramount Is In Talks To Sell BET For About $2 Billion

Should a merger materialize, it would unite two of the largest companies in the entertainment sector, as WBD now owns HBO, the former Turner and Discovery cable channels, and the Warner Bros. film and TV studios. It runs the Max streaming service as well.

In addition to owning the old Viacom cable networks, including MTV, Comedy Central, BET, and Nickelodeon, Paramount also controls CBS, Paramount Pictures, and its thriving film and TV studios.

Due to WBD’s absence of a domestic broadcast network and its largely complementary business lines, this combination is expected to face less regulatory scrutiny than other possible merging opportunities. The merging of the two historic TV and film studios would probably be the main point of contention.

READ MORE: Members Of Walmart+ Can Now Add Showtime And Ad-Free Streaming To Their Free Paramount+ Subscription

Yet there would be significant synergies. Leagues seeking broadcast accessibility in addition to cable and streaming would benefit from the CBS broadcast network and its local stations, which would complete a linear gap in WBD’s portfolio and strengthen its sports business. With the exception of a long-term agreement to share March Madness, the rosters of rights for CBS Sports and WBD Sports do not cross, and it would include the NFL in WBD’s portfolio.

According to a high-level source, CBS News and CNN also pursued merger discussions in the late 1990s and early 2000s, but no agreement was ever finalized there. At the time, it was believed that CNN’s cable programming and CBS News’ broadcast programming would enhance one another.

Naturally, it would also drastically change the entertainment scene by bringing together beloved properties like Spongebob Squarepants, Looney Tunes, Mission Impossible, Harry Potter, DC Comics, and Star Trek. That is, if regulators authorized the deal or if they mandated a spinout of some kind to meet their requirements about competition.

With a merger helping to bulk them up, the two streaming services—Max/Discovery+ (95 million worldwide subscribers) and Paramount+ (63 million subs)—are viewed as subscale in comparison to Netflix (247 million subscribers) and Disney+ (105 million core subs).

READ MORE: The SHOWTIME TV Network Will Undergo A Rebranding Process And Be Renamed As Paramount+ Alongside The Inclusion Of SHOWTIME In January

Throughout the streaming battles, Paramount and WBD have seen difficult years, as evidenced by the fact that their stock prices are still much below their peak values. Even though some of their cost-cutting measures have infuriated the community, WBD seems to be getting closer to becoming profitable in the streaming space.

Both businesses and NBCUniversal, which is controlled by Comcast, have been mentioned as prime candidates for a merger in 2024. As per the conditions of the Reverse Morris Trust agreement, which resulted in the merger of Discovery and WarnerMedia, WBD is not officially permitted to close any deals until April 2024.

Ever since taking over Discovery Communications in 2006, Zaslav has been an active negotiator. He masterminded the buyout of rival Scripps Networks Interactive, transforming the business into a massive player in unscripted television with brands including Discovery Channel and Food Network.

Naturally, he also started the negotiations to buy WarnerMedia when he infamously texted AT&T CEO John Stankey a golf emoji, starting a formal dialogue.

In the past month, Zaslav and WBD board member John Malone have both stated in the open that they envision “opportunistic” transactions; many observers have speculated that they had Paramount in their sights.

It’s also said that Shari Redstone, who has a controlling interest in Paramount through her family business National Amusements, has entertained discussions on her NAI’s involvement in the film. The latter has additionally attempted to market “non-core” brands, such as the cable channels BET and book publisher Simon & Schuster.

According to a person familiar with the situation, Byron Allen, the founder of Allen Media Group, has also expressed interest in purchasing the BET assets (including BET, BET+, and VH1) again and has offered $3.5 billion in a letter to Paramount executives.


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