The combined company will merge streaming services, including Paramount+ and HBO Max, into a single platform, Chief Executive David Ellison said on a call with analysts.
Together, the companies serve more than 200 million direct-to-consumer subscribers across more than 100 regions, positioning the merged entity to compete more directly with Netflix.
Paramount agreed to pay $31 per share for Warner Bros in a deal signed Friday after Netflix declined to raise its offer. Paramount also paid a $2.8 billion termination fee owed to Netflix.
The transaction is expected to generate more than $6 billion in cost savings, with a significant portion coming from consolidating streaming technology systems and cloud providers, executives said. The projected savings exceed Netflix's previously stated synergy target of up to $3 billion.
Warner Bros Discovery had net debt of $29 billion at the end of last year, while Paramount reported $10.36 billion, bringing the combined total to roughly $79 billion after the deal closes.
The merger will unite Paramount's CBS, MTV, Comedy Central and BET networks with Warner's CNN, HBO, TNT and Food Network. The company said it expects to produce at least 30 theatrical films annually while maintaining both studio brands.
The deal is expected to close in the third quarter, pending regulatory approvals. Analysts have said European Union antitrust clearance is likely to require only limited divestitures.
Warner Bros. Discovery said on Tuesday that Paramount Skydance had raised its bid to acquire the entertainment and media company to $31 per share.
The revised offer raises the heat on streaming giant Netflix, which in December agreed to buy Warner Bros. Discovery for $27.75 per share, or $82.7 billion, to match Paramount Skydance's bid or abandon the deal.
Still, Warner Bros. Discovery said in a news release that its board of directors has not determined whether Paramount Skydance's latest offer is superior to Netflix's deal.
"WBD will engage further with [Paramount Skydance] to determine if a proposal that constitutes a 'Company Superior Proposal,' as defined in the Netflix Merger Agreement, can be reached," Warner Bros. Disovery said.
If Warner's board decides that Paramount's offer is superior, Netflix would have four days to revise its proposal.
Paramount Skydance's revised offer includes a $7 billion termination fee if the deal fails to close because of regulatory concerns, according to Warner Bros. Discovery. Paramount Skydance would also cover a $2.8 billion termination fee that Warner Bros. Discovery would be required to pay if it ends the Netflix deal.
The sweetened bid comes a week after Warner Bros. Discovery said it would resume talks with Paramount Skydance, the owner of CBS News, to discuss its previous $30 per share bid.
Earlier in the day, Warner Bros. Discovery said in a statement that its merger agreement with Netflix remains in effect and that its board of directors " continues to recommend" the deal.
The latest development raises the stakes in the contest over Warner Bros. Discovery, which, along with its streaming and film studios, also owns cable channels including Food Network, HBO Max, HGTV, TBS and TNT.
Paramount Skydance has said that its bid represents a superior financial offer for Warner Bros. Discovery shareholders, while also describing Netflix's bid as likely to run afoul of U.S. antitrust laws.
Netflix's deal is only for Warner Bros. Discovery's studio and streaming business, with the takeover slated to occur after Warner spins off its television networks. Paramount Skydance is bidding to acquire all of Warner Bros. Discovery's assets.
Feb 15 (Reuters) - Warner Bros Discovery (WBD) is considering reopening sale talks with rival Hollywood studio Paramount Skydance (PSKY) after receiving its hostile suitor's most recent amended offer, Bloomberg News reported on Sunday, citing people with knowledge of the matter.
Members of Warner Bros' board are discussing whether Paramount could offer the path to a superior deal, the Bloomberg report said, adding that the board has not decided how to respond and may stick to the current deal with Netflix (NFLX) .
Reuters could not immediately verify the report. Paramount, Warner Bros and Netflix did not respond to requests for comment.
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Paramount had enhanced its Warner Bros bid last week by offering shareholders extra cash for each quarter the deal fails to close after this year. It also agreed to cover the breakup fee the HBO parent would owe Netflix if it walked away, even though the CBS owner did not raise its per-share offer.
Paramount said it has offered shareholders a 25-cent-per-share quarterly "ticking fee" (about $650 million) in cash starting in 2027 until closing and agreed to cover Warner Bros’ $2.8 billion breakup fee to Netflix. However, it did not raise its $30-per-share offer, valuing the deal at $108.4 billion including debt.
Both Netflix and Paramount covet Warner Bros for its leading film and television studios, extensive content library and major franchises such as "Game of Thrones," "Harry Potter" and DC Comics superheroes Batman and Superman.
Activist investor Ancora Holdings, which has built a nearly $200 million stake, last week said it plans to oppose the Netflix deal, arguing the board did not sufficiently engage with Paramount over its rival bid, which includes cable assets like CNN and TNT.
(Reporting by Chandni Shah in Bengaluru; Editing by Chris Reese and Matthew Lewis)
Paramount Skydance plans to merge Paramount+ and HBO Max platforms
Daniel Arkin
3 min read
Getty Images ·Getty Images
Paramount Skydance plans to combine Paramount+ and HBO Max into one streaming service after it officially takes over Warner Bros. Discovery, the company’s top executive announced Monday.
“We do plan to put the two services together, which today gives us a little over 200 million direct-to-consumer subscribers,” Paramount Skydance CEO David Ellison said during an investor call early Monday.
“We think the combined offering, given the amount of content and what we can do from the tech side, really will put us in a position to be able to compete with the most scaled players” in the direct-to-consumer streaming market, Ellison added.
Paramount+ is home to the “Star Trek” franchise and “Yellowstone” creator Taylor Sheridan’s popular television shows. HBO Max is the destination for “Game of Thrones,” the Batman saga and recent hits like “Sinners.”
The call came three days after Warner formally signed an agreement to be acquired in a blockbuster deal by Paramount. The deal was inked after Netflix abruptly pulled out of the bidding war for Warner's studio and streaming assets, closing the curtains on a corporate battle that had riveted Hollywood and beyond.
Paramount’s offer of $31 a share values Warner at roughly $77 billion. The takeover bid, factoring in Warner’s debt load, comes to a total of more than $110 billion.
If the Paramount-Warner merger is approved by regulators and shareholders, Ellison would take over a sprawling portfolio of assets that includes the Warner Bros. Pictures film studio, DC Entertainment, HBO and CNN. (Netflix’s bid did not include Warner’s cable channels.)
Ellison is no stranger to the regulatory approval process: Skydance Media acquired Paramount Global last year in a transaction valued at $8 billion, putting it in control of a movie studio, the CBS network and a trove of intellectual property. The deal catapulted him to the upper ranks of modern media moguls.
Monday’s investor call provided the public with an early glimpse at Ellison’s plans for Warner after the merger is complete.
He pledged to releasing 30 movies in theaters a year and vowed that HBO would continue to enjoy the resources and creative independence to “do what it does best.” HBO has long been considered one of the most prestigious brands in entertainment.
“HBO should stay HBO,” Ellison said.
Paramount executives also said they have no plans to spin off or divest the suite of Warner cable channels, which also includes TNT and TBS. Comcast, the parent company of NBC News, recently spun off cable assets such as MSNBC, which has been rebranded as MS NOW, CNBC and E! into a separate entity called Versant.
Ellison — the son of Silicon Valley titan Larry Ellison, a close ally of President Donald Trump — insisted the Paramount-Warner tie-up would “enable us to better compete in today’s rapidly evolving market place,” and lead to a “stronger Hollywood.”
The deal has been met with a mixed reaction in America's movie and television capital, with rank-and-file employees in Los Angeles expressing fear about potential job cuts, a possible pullback in content spending and wider technological disruptions.
This article was originally published on NBCNews.com
Warner Bros. in Burbank (Eric Thayer/Los Angeles Times)
As Paramount Skydance's bid for Warner Bros. Discovery stretched into the stratosphere, a painful truth emerged.
Paramount's core television business, which includes CBS, Comedy Central and MTV, is rapidly shrinking and its Melrose Avenue movie studio lost money.
Paramount this week reported a $339-million operating loss in last year's fourth quarter, which included a half-billion dollars in restructuring costs following Paramount's August takeover by David Ellison's Skydance Media.
Paramount leaders have been ferociously fighting to push Netflix out of the pole position. Earlier this week, Paramount raised bid for Warner to $31 a share and it threw in other sweeteners for a proposed deal that would top $110 billion. And late Thursday Netflix announced that it was bowing out of the auction, clearing the way for Paramount to claim the prize.
Earlier Thursday, Warner Bros. Discovery released its own gloomy fourth-quarter financial results.
Warner revenue declined 6% to $9.46 billion and the company recorded a $252-million loss.
Warner's HBO Max and Discovery+ streaming division notched growth — but not nearly enough to keep pace with the continued contraction of its traditional cable channels. Revenue for Warner's linear cable channels fell 12% to $4.2 billion.
The loss of TNT's NBA contract last year contributed to lower advertising revenue. Linear channels adjusted earnings before interest, taxes, depreciation, and amortization was down 27% to $1.4 billion.
Nonetheless, taking over Warner's historic studio in Burbank would give the Ellison-led Paramount a vast library of programming with Harry Potter, Batman and other DC Comics and television shows including "The Pitt," "The White Lotus" and "Abbott Elementary."
Paramount would gain more robust TV and movie production capabilities. Last year, for example, Paramount released just eight films.
On Thursday's call with analysts, Warner Bros. Discovery Chief Executive David Zaslav, who took over the company from AT&T nearly four years ago, touted Warner Bros.' string of successful releases, including "Sinners," "Weapons," and "A Minecraft Movie."
Warner films generated $4.4 billion in theatrical revenue in 2025.
"Our goal for Warner Bros. Discovery has been to make this great company the most innovative and exciting place to tell stories in the world," Zaslav said on the earnings call. "Looking at 2025, it's clear we fulfilled our ambition."
But despite the box office successes, revenue to Warner Bros. movie and TV studios dropped 13% to $3.2 billion. The studios adjusted earnings before interest, taxes, depreciation, and amortization dropped 23% to $728 million.
The company is still wrestling with the costs of its previous takeovers and resulting waves of reductions.
Warner's $252-million quarterly loss was a byproduct of a $1.3 billion write-down as Warner continues to amortize restructuring charges stemming from the 2022 merger with Zaslav's Discovery. Lower value of Warner's programming also factored in.
David Zaslav, the president and CEO of Warner Bros. Discovery, poses at the premiere of a 4K restoration of the 1959 film "Rio Bravo" on the opening night of the 2023 TCM Classic Film Festival, Thursday, April 13, 2023, at the TCL Chinese Theatre in Los Angeles. (Chris Pizzello / Invision / AP)
Warner has $33.5 billion in debt — another vestige of the 2022 merger, which led to thousands of job losses and dumped programming.
"We canceled a lot of movies and a lot of [TV] series when we first got here," Zaslav said. "We canceled a lot of stuff ... that we didn't think was going to be successful."
Thousands of entertainment workers also lost their jobs amid the reductions — adding to a troubling employment picture as film production slows in Los Angeles.
Warner's fourth-quarter loss of 10 cents a share was wider than analysts' estimates of a loss of 3 cents a share.
The earnings didn't dent Warner stock, which was trading at around $29 a share Thursday — buoyed by the bidding war between Netflix and Paramount. Last summer, Warner shares went for about $12.
"Our board continues to lead a rigorous, highly competitive and thorough sales process," Zaslav said, adding the company has held sale talks with four prospective buyers since Ellison launched the bidding for Warner in September.
The interest in the company has "led to eight price increases, and have thus far achieved a 63% increase in value versus the first offer received in September," Zaslav said. The process has been "delivering significant value for WBD shareholders."
Should Netflix or Paramount succeed in the bidding for Warner, the winner would face years of retrenchments and cost-cutting.
Acquiring Warner Bros. Discovery would saddle either company with more than $60 billion in debt.
The Melrose gate of Paramount Pictures Studio in Hollywood. (Al Seib / Los Angeles Times )
Paramount Skydance is betting its future on its streaming business, as gains at the media and entertainment company's Paramount+ platform helped boost earnings for the fiscal fourth quarter of last year.
On Wednesday, Paramount reported $8.1 billion in revenue for the three-month period that ended Dec. 31, up 2% compared to the previous year's quarter. That was because of growth in its streaming business, which saw a 10% increase in quarterly revenue to $2.2 billion, as well as gains at Paramount's filmed entertainment segment, which reported revenue of $1.3 billion, an increase of 16% compared to the previous year.
The company's TV media business, however, had a tougher quarter.
That segment reported revenue of $4.7 billion, down 5% compared to the previous year, as traditional broadcast networks continue tolose subscribers. Paramount also cited a 10% decrease in advertising, partially because of a drop in political spending and not having the Big Ten football championship as it did in 2024.
Paramount reported an operating loss of $339 million, which included $546 million in restructuring and transaction-related costs attributed to its merger with Skydance last year. Diluted losses per share totaled 52 cents, compared to a loss of 33 cents during the prior year.
Chief Executive David Ellison praised the company's progress under his tenure, noting that investments in the film studio, original series and the Ultimate Fighting Championship and tech upgrades to Paramount+'s streaming platform and advertising would build momentum in the coming years.
"It's been six months, but we really do feel good about the work the team has done to date," he said during an earnings call with analysts Wednesday afternoon. "You can expect that to accelerate into the future quickly."
The company said it expects total revenue of $30 billion this year, which would mark a 4% increase compared. Paramount signaled the primary driver of that growth will be its streaming business, though the company also anticipates a boost from its studio segment.
Company executives declined to answer questions on the call about Paramount's bid to acquire rival Warner Bros. Discovery.
The only mention of the ongoing fight with Netflix was in Paramount's letter to shareholders, which noted that the company was "confident" in its standalone strategy and growth trajectory, but that adding Warner would be an "accelerant to achieving these goals more quickly" and in a way that would be "economically compelling" for Paramount's shareholders.
Paramount submitted a higher bid Monday offering $31 a share in cash to Warner Bros. Discovery investors. Previously, the offer was $30 a share. The company also agreed to pay $7 billion to Warner should the deal fail to clear various regulatory hurdles. That was a $2 billion increase.
Paramount reaffirmed it would cover the $2.8 billion termination fee Warner would owe Netflix if Warner abandoned its deal with the streamer. Paramount also said it would pay a so-called ticking fee sooner. Now, the company said it would pay an additional $0.25 per quarter to shareholders after Sept. 30 until a Paramount-Warner transaction closed. It also agreed to cover Warner’s potential $1.5 billion in financing costs associated with a planned debt exchange offer.
Additionally, Paramountsaid it “agreed to an obligation to contribute additional equity funding to the extent needed to support the solvency certificate required by PSKY's lending banks.” That provision was offered because Warner board members expressed concerns that Paramount may not be able to round up sufficient financing to close such a gargantuan deal.
The company's earnings renewed concerns about the potential Warner acquisition, John Conca, analyst at Third Bridge, wrote in an email, particularly in light of the declines it's facing in its own TV business.
"It is becoming questionable why leadership is aggressively pursuing [Warner], a deal that would effectively double their exposure to dying linear networks while also creating even more massive integration headaches," he said.
