Paramount plans bid for Warner Bros Discovery

David Ellison, the media mogul who took over Paramount just last month, has already set his sights on another blockbuster deal: He wants to buy Warner Bros. Discovery.

Ellison is planning a bid for the company, which owns HBO, CNN and the Warner Bros. movie studio, according to three people with knowledge of the plans.

A merger of the two Hollywood giants would reshape the media industry, putting some of the most renowned news and entertainment brands under the same roof. It would unite two of the biggest movie studios and two of the most influential news networks, CBS News and CNN.

Warner Bros. Discovery is already reorganizing its media business. The company said this year that it would split its cable networks from its streaming and studio business, following a similar move at Comcast.

Ellison 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. The bid would be made mostly in cash.

A deal to acquire Warner Bros. Discovery would be costly. The company is worth $41 billion and has $35 billion in debt, remnants of the 2022 merger that brought it to life. But the Ellison family has the means: Ellison’s father, Larry, is a co-founder of Oracle and one of the richest men in the world, with an estimated net worth of $383 billion, according to Bloomberg.

David Ellison has moved quickly to transform Paramount. The company struck a deal to license rights from the Ultimate Fighting Championship, reached a long-term agreement with the creators of “South Park” and commenced talks to acquire The Free Press, an against-the-grain digital publisher co-founded by Bari Weiss.

Ellison has long held ambitions to expand Skydance with acquisitions, particularly given the company’s small size relative to rivals like Comcast, two people familiar with the matter said. To succeed, he will need to persuade the board of Warner Bros. Discovery and its shareholders that they are better off selling the company now than waiting for its prospects to improve once it is separated into two companies. News of the potential bid sent Warner Bros. Discovery’s stock soaring 27% on Thursday.

Once the Warner Bros. Discovery split is completed next spring, the company that includes the streaming and studio business — to be called Warner Bros. — could be enticing to a wide variety of bidders. That includes tech companies, like Amazon and Apple, that are trying to expand their own entertainment businesses. Indeed, some people in Hollywood say the goal of splitting up Warner Bros. Discovery is to set up a bidding war.

Others on Wall Street question whether technology giants would want to spend money on content while in a fierce battle to win the race on artificial intelligence.

Conversely, David Zaslav, who would be chief executive of the slimmed-down Warner Bros., may have another goal in mind: acting as the consolidator himself, perhaps by making a play for assets currently owned by Comcast.

Warner Bros. is one of the most powerful old-line movie and television studios left standing. It owns or controls characters such as Harry Potter, Batman and Bugs Bunny and franchises including “Game of Thrones,” “The Lord of the Rings,” “Friends” and “The Conjuring.” The Warner Bros. library of intellectual property is widely viewed as second only to Disney’s — and less exploited.

After one of the worst box office runs in its 102-year history last year and early this year, Warner Bros. suddenly found a colossal hit in April with “A Minecraft Movie.” Since then, the studio has served up six more consecutive No. 1 movies, enough to rank as the No. 1 studio in domestic market share for the year to date, according to Comscore.

The HBO Max streaming service has also rebounded. It is now profitable and available worldwide. Although its viewership remains low, especially compared with Netflix, HBO Max has put together a formidable lineup of hits, including “The Pitt,” “The White Lotus,” “The Last of Us” and “The Gilded Age.”

Skydance may be betting it can get a sweeter deal for the entire company — including its valuable steaming properties — rather than trying to cherry-pick choice assets afterward.

Any deal would require the blessing of the Trump administration, which has put media companies under the microscope since Inauguration Day. Brendan Carr, the chair of the Federal Communications Commission, approved Skydance’s merger with Paramount this summer only after Ellison agreed to appoint an ombudsperson — a kind of editorial referee — for CBS News and committed not to restart the company’s diversity, equity and inclusion program.

Regulators would examine whether the combined company would have too much sway over the news and entertainment industries, bringing together two major movie studios and influential news networks.

A particular sticking point may be combining CNN, which President Donald Trump has denounced as “fake news,” with CBS News, which the president has closely scrutinized. Some regulators, given his criticism, may balk at putting CNN under the same corporate umbrella as a broadcast news network. However, Comcast for years has operated MSNBC under the same corporate roof as NBC News, its broadcast network.

Reviews of deals under the second Trump administration have frequently focused on political concerns as well as economic ones. (As one example, the Federal Trade Commission allowed Omnicom Group and Interpublic Group to combine so long as they agreed to not boycott media platforms because of the platforms’ political content.) Paramount may be hoping that Larry Ellison’s long-standing friendship with Trump will be helpful.

The new company would also be a major force in streaming, with two of the top five streaming services in the United States: HBO Max and Paramount+. But even together, they would be dwarfed by Netflix, the leader in the category, which has more than 300 million subscribers.

The Wall Street Journal earlier reported on Paramount’s plans to acquire Warner Bros. Discovery.

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