Warner Bros Discovery and Paramount Global discussing merger, reports say

The chief executives of Warner Bros. Discovery and Paramount Global have been discussing a possible merger of the two media behemoths, media reports have said.

Axios first reported that David Zaslav met with Bob Bakish in New York on Tuesday to discuss combining the two corporations.

The companies are two of the biggest in the entertainment space, with Warner Bros. Discovery owning brands such as CNN, DC and Game of Thrones, while Paramount owns broadcast network CBS, MTV and Nickelodeon.

Both have their own streaming services, Paramount + and Max, and are competitors to the likes of Netflix, Disney+ and Amazon Prime.

But it would still be a struggle for the joint forces to take on the bigger players.

 "[Their] combined market value would still be under 20% of Netflix’s," Derren Nathan, head of equity research, Hargreaves Lansdown said.

"Both names have however been sinking billions of dollars into their own streaming services which if combined could see them leapfrog Disney into third place in the subscriber number league table," he said.

"Certainly, there’s a lot of synergies to be had here but with $67bn (£52.9 billion) of net debt between them, it may not be a perfect marriage if a deal goes ahead.”

Investors did not see overly enthused by the reports of the merger, with NASDAQ-listed shares of Warner Bros. Discovery falling almost 6%, while Paramount stock dropped around 2%.

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