Don’t bet against Paramount Skydance CEO David Ellison — especially if he has President Donald Trump on his side.
Paramount made a bid for all of Warner Bros. Discovery in time for the media conglomerate’s self-imposed Thursday deadline, according to The New York Times. Comcast and Netflix are also bidding for the streaming and studios side of WBD, The Times reported.
Spokespeople for Paramount and WBD declined to comment. Spokespeople for Comcast and Netflix didn’t respond to requests for comment.
A Paramount-WBD deal would be the largest media tie-up since Disney bought Fox’s TV and movie studio in 2019. While mega-mergers of that magnitude are rare, legal experts say that Ellison’s apparent rapport with Trump may help Paramount get around antitrust concerns.
“If we were talking about this a year ago, there’s no way,” said Corey Martin, an entertainment lawyer at Granderson Des Rochers in Los Angeles. “But we’re not under a Biden administration.”
Trump said in June that the then-incoming Paramount CEO was “great” and would “do a great job” at the media company. More recently, Ellison was invited to a White House dinner for Mohammed bin Salman, the Crown Prince of Saudi Arabia, on Tuesday night. Ellison’s father, the billionaire Oracle cofounder Larry Ellison, has been a closer supporter of Trump for years.
David Ellison has said he doesn’t want to “politicize our company in any way, shape, or form.” Despite this stance, his move to appoint the anti-woke media entrepreneur Bari Weiss as the top editor at Paramount’s CBS News made waves in the worlds of politics and media.
Paramount is the most logical bidder for WBD because it has the clearest path on the financing and regulatory fronts, and is the most motivated to make a deal, Raymond James media analyst Ric Prentiss wrote in a mid-November note.
WBD’s other bids have holes
WBD put a for-sale sign on itself in late October, after CEO David Zaslav said it had received “unsolicited interest” from multiple suitors. It appears Paramount, Comcast, and Netflix are most interested, though only Paramount seems to have the appetite to swallow all of WBD, which is separating its studio and streamer from its cable networks.
Rival Comcast is spinning off most of its cable TV assets, so adding more networks from WBD wouldn’t make sense. Its stagnant stock price and high debt load may also limit how much it’s able to bid without an equity partner, Raymond James’ Prentiss wrote.
Another negative factor: Trump has expressed disdain for Comcast CEO Brian Roberts, as well as for MSNBC (which Comcast is spinning off) and NBC News.
The fit between Comcast and WBD “on paper, is nearly perfect,” media analyst Craig Moffett wrote in a mid-November note. But the MoffettNathanson cofounder also said “the regulatory/political impediments to an acquisition could prove to be insurmountable.”
And while Netflix has the financial firepower to compete with Paramount in a bid, it has no interest or need for legacy TV networks. Co-CEO Ted Sarandos said the company is “choosy” about dealmaking on its latest earnings call.
Netflix “is merely doing its due diligence” on WBD and “would not pay a premium to the current price in a competitive bidding process,” MoffettNathanson’s Robert Fishman wrote last week.
Plus, the streaming giant could run into regulatory roadblocks, either in the US or abroad.
Morgan Stanley’s Ben Swinburne said in a Wednesday note that Netflix had the “smallest synergy opportunity,” meaning cost savings from a WBD deal, “and perhaps the toughest regulatory path.”
Concerns abound — but perhaps not from regulators
Wall Street’s excitement isn’t shared by Hollywood creatives and some Paramount employees.
A Paramount marketing strategy staffer expressed concern that a merger would lead to more layoffs, although they said they had grown accustomed to cuts.
“Everyone at Paramount is used to it, in a sinister kind of way,” this person said of layoffs. Ellison’s company laid off 1,000 staffers in late October, and a person familiar with Paramount’s plans told Business Insider that about 1,000 more cuts are coming, though the timeline on that is unclear.
Industry analysts say a merger of Paramount and Warner Bros. would be challenging to get through in a normal regulatory environment, as a consolidated studio could potentially pay creatives less while raising prices.
Antitrust regulators typically focus on how a merger of two powerful companies could impact the labor market and their pricing power over consumers. However, Martin, the entertainment lawyer, said much of that conventional analysis “is out the window” in the second Trump administration, in which personal relationships play a larger role.
Trump’s apparent goodwill toward Paramount and Ellison, along with his administration’s M&A-friendly stance, has legal experts feeling rosy about the chances of Paramount’s WBD bid.
“There’s room for some optimism by the companies that they would be able to consummate this merger if they wanted to,” said Ray Seilie, an entertainment litigator at Los-Angeles-based law firm Kinsella Holley Iser Kump Steinsapir.
‘Now or never’
If WBD splits itself next summer, the two companies couldn’t get acquired for two years without incurring significant tax penalties. That could delay any bidding process until 2028, when it’s unclear who will control Congress and have the inside track to the White House.
In other words, Paramount Skydance might be thinking it’s “now or never” to get a deal done for the WBD assets, Seilie said.
While Hollywood may complain about one firm controlling the Paramount Pictures and Warner Bros. studios, Ellison’s plea to the Trump administration may be simple, legal experts said: buying WBD is the only way to survive when competing against deep-pocketed tech giants in a cutthroat industry.
“It’s possible that the way things are right now are unsustainable, and they need this merger in order to effectively compete against Netflix,” Seilie said.
Pairing Paramount+ with HBO Max and Warner Bros. could make Paramount a streaming superpower.
By bidding on WBD, Ellison can “take advantage of a much larger opportunity to redefine Paramount’s future,” MoffettNathanson analyst Robert Fishman wrote.
