Share prices of Warner Bros. Discovery soared by nearly 30 percent on Thursday afternoon following reports that Paramount, fresh off its merger with Skydance Media, was preparing a majority cash bid to acquire the media conglomerate.
The Wall Street Journal reported that the Ellison family – led by Larry Ellison, one of the world’s richest men – was backing the proposed purchase of WBD and would include the entire company, including its cable television networks and movie studio. Warner had previously announced its intention to separate into two distinct businesses, with the global TV assets in one company and the other incorporating its streaming and studio operations.
In fact, earlier this week, WBD CEO David Zaslav said during an investor conference this week that the restructuring would take place in April, with the streaming and studio business being renamed Warner Bros. and the television properties – which include CNN, TNT and TBS – going by Discovery Global.
Besides shares in WBD jumping on the news – they were up 26 percent by mid-afternoon – the stock price of Paramount Skydance also surged nine percent following the report.
A Warner Bros. Discovery spokesperson declined to comment. Representatives for Paramount did not respond to requests for comment.
“Warner Bros. Discovery had yet to receive an offer as of Thursday, according to people familiar with the matter, who spoke on the condition of anonymity to discuss nonpublic dealings,” CNBC reported on Thursday afternoon.
“Such a deal would be a big swing. Warner Bros.’s nearly $33 billion market cap is more than double that of Paramount Skydance,” the Wall Street Journal also noted. “A bid hasn’t yet been submitted and the plans could still fall apart.”
The potential takeover of Warner Bros. Discovery comes just weeks after Skydance, led by Larry Ellison’s son David, wrapped up its $8.4 billion acquisition of Paramount Global following a politically fraught process that included a $16 million payment to Donald Trump to settle the president’s “meritless” lawsuit with CBS News.
The settlement, along with the president’s claim that David Ellison agreed to a secret “side deal” to air $20 million of pro-Trump ads on CBS, has sparked an investigation from House Democrats into potential violations of anti-bribery statutes.
Prior to receiving approval for the merger from the FCC, which is led by Trump’s handpicked chairman Brendan Carr, Skydance also committed to hiring an ombudsman to review “complaints of bias” at CBS once it took over Paramount. Earlier this week, Paramount announced that former Trump appointee and conservative think tank leader Kenneth Weinstein would be the new CBS ombudsman.
David Ellison, whom Trump has called a “great man” who will “do the right thing,” is also reportedly close to purchasing the anti-woke media startup The Free Press and installing its founder Bari Weiss in a senior management position at CBS News. While that deal is not finalized, the prospect of Weiss taking on a newsroom leadership role shows Ellison’s intention to make significant changes at the network.
While the proposed deal would likely not require clearance from the FCC because WBD doesn’t hold any broadcast licenses, which was a hurdle in the Paramount-Skydance merger, the scale of the acquisition could result in potential antitrust and regulatory scrutiny.
Besides placing two large and long-running movie studios under the same ownership, the deal also looks to combine both companies’ massive streaming divisions. As of this summer, Paramount+ boasted 77.7 million subscribers, while Warner’s HBO Max and other streamers had nearly 126 million subscribers.
“And while the Antitrust Division is typically free of political interference, all bets are off in this administration. Even though Donald Trump has praised the Ellisons, Warner Bros. Discovery owns CNN, a target of the president’s attacks even more than CBS News ever was,” Deadline observed.
