The entertainment sector is bracing for a potential seismic shift as reports indicate Paramount Skydance is preparing a substantial cash bid to acquire Warner Bros Discovery. News of the proposed merger triggered a nearly 30% surge in Warner Bros Discovery’s stock, while Paramount Skydance shares climbed 16%, signaling investor confidence in a deal that could redefine competition against established streaming leaders.
The reported offer is a majority cash bid for the entirety of Warner Bros Discovery, encompassing its renowned movie studio and prominent cable networks, including HBO and CNN. Oracle’s Larry Ellison is reportedly backing Paramount’s bid, led by his son David Ellison, who runs Paramount Skydance. As of recent market close, Paramount Skydance held a market value of approximately $19 billion, significantly less than Warner Bros Discovery’s roughly $40 billion valuation. It remains critical to note that a formal bid has not yet been submitted, and the plans are subject to change.
If finalized, this consolidation would represent the largest in Hollywood since The Walt Disney Company’s acquisition of Fox Corp.’s entertainment assets in 2019. Such a merger is strategically aimed at achieving the scale necessary to compete effectively with dominant streaming platforms like Netflix and Disney, as the industry continues its evolution driven by shifts in traditional viewing habits. This aligns with Warner Bros Discovery’s previously announced internal strategy to divide its operations into two distinct divisions: one focused on cable television and the other on streaming and studio productions.
The potential acquisition follows closely on the heels of the recent $8 billion merger between movie giant Paramount and independent film studio Skydance Media. This preceding transaction became embroiled in controversy due to a $16 million defamation settlement paid by Paramount to US President Donald Trump. The President had alleged that Paramount’s CBS News deliberately edited a “60 Minutes” program featuring then-Vice President Kamala Harris in a deceptive manner.
Paramount asserted that the settlement with President Trump was “completely separate from, and unrelated to, the Skydance transaction and the FCC approval process.” However, critics widely perceived the payout as a strategic appeasement, designed to facilitate the merger’s regulatory approval. Further raising questions were Skydance’s declarations to end Paramount’s diversity programs and establish an ombudsman to review bias complaints. Additionally, the cancellation of “The Late Show with Stephen Colbert” by Paramount prior to the merger’s approval drew criticism, although Paramount denied any political motivation behind the decision.
David Thompson earned his MBA from the Wharton School and spent five years managing multi-million-dollar portfolios at a leading asset management firm. He now applies that hands-on investment expertise to his writing, offering practical strategies on portfolio diversification, risk management, and long-term wealth building.