Warner Bros chief holds talks with Paramount Global counterpart over potential merger

Warner Bros Discovery has held talks on a possible merger with Paramount Global, potentially combining two of the biggest media companies in the world.

David Zaslav, chief executive of Warner Bros Discovery, met his Paramount Global counterpart Bob Bakish in New York to discuss a possible deal, according to Axios.

Mr Zaslav also spoke to Paramount chairwoman Shari Redstone, whose family company owns a controlling stake in Paramount, the owner of CBS and other television properties.

A combination of the companies would unite famous Hollywood properties, including the Paramount and Warner Bros film and TV studios, and put a number of pay-TV and broadcast stations, such as HBO and CBS, under a single roof. Warner Bros executives said they seek such a merger because their company does not own a broadcast network like Paramount’s CBS, Axios reported.

Both companies have struggled as consumers have cancelled cable-TV subscriptions in favour of a new generation of streaming services.

The streaming businesses are expensive to run and have not made up for shrinking profits at traditional networks. Paramount’s board has been more open to strategic alternatives, such as an alliance with another big media business, or even a sale to a private equity buyer or technology company, sources said. Paramount has sold some of its non-core assets recently, including its real estate and Simon & Schuster booking publishing business.

The company is reportedly holding talks once again about a sale of the Black Entertainment Television network, this time with a management-led group.

The Redstone family owns a majority of the voting stock in Paramount through National Amusements, a family holding company. Ms Redstone has also held talks about a sale of her family’s Paramount stake with film producer David Ellison and RedBird Capital Partners.

Mr Zaslav has shown a great appetite for deals, merging his Discovery cable networks with the Scripps channels and later acquiring Warner Media from AT&T in a $43 billion merger.

The latter deal included tax benefits that bar Warner Bros from doing new acquisitions until April 2024, two years after the completion of the AT&T transaction.