Warner Bros. Discovery has shown early interest in exploring a partnership with Paramount Global to combine WBD’s Max and Paramount+, according to sources.
Paramount Global, after its controlling shareholder Shari Redstone called off merger talks with Skydance Media last month, is proceeding under a new strategic plan under three co-CEOs to cut costs, explore the sale of certain assets and accelerate benefit of Paramount+ through a possible connection. venture with another player.
A potential dance partner for Paramount is Warner Bros. Discovery. A source confirmed WBD’s preliminary interest in evaluating a streaming JV with Paramount Global, as first reported by CNBC.
Of course, it’s no surprise that Warner Bros. Discovery would at least consider a broadcast JV with Paramount, given how public Paramount Global’s management team has been about their desire to find a partner. At this point, the situation more or less involves each company kicking the tires on what such a partnership might look like.
Representatives of Warner Bros. Discovery and Paramount Global declined to comment.
At the June 25 Paramount Global employee town hall meeting, Chris McCarthy, one of the three-member Office of the CEO (and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks), discussed two potential broadcast partnerships.
The first option “is to enter into a deep, long-term relationship with a leading technology platform that already has the full scale that we’re trying to get. But what they don’t have is our content scale, and together we’re going to make a very powerful combination to bring in more minutes and bigger profits,” McCarthy told employees at City Hall. “And that would allow us to focus a larger percentage of our budget on what we do best – that’s creating hit content.”
The second type of partnership that Paramount Global is exploring “involves us joining forces with one or more other SVOD players,” McCarthy said. “The sheer volume of hit content we can deliver together would be incredible across TV, film and sports and would attract millions of viewers. Plus, we’ll share in all other non-content expenses.”
McCarthy said: “The great news is that there is tremendous interest in partnering with us on both of these strategic options, given the strength of our content, the volume of our hits and our industry-leading track record.”
Separately, at a recent investment conference, the CEO of Warner Bros. Discovery’s David Zaslav said the company will be “opportunistic” in seeking M&A deals in the next two to three years. “There are a lot of players who are losing a lot of money,” Zaslav said May 30 at Bernstein’s 40th Annual Strategic Decisions Conference. “There will be some players who want to get out of the business, who will try to consolidate their streaming businesses with others,” he said, adding that he believes there will be four or five dominant global streaming platforms while things shake out.
Paramount earlier this year discussed merging Paramount+ with NBCUniversal’s Peacock in the past, but so far nothing has happened on that front. Meanwhile, late last year, Zaslav and Bob Bakish (then Paramount CEO) briefly discussed the idea of merging WBD and Paramount Global, but those talks went nowhere.
Both Paramount+ and Max have announced price increases in recent weeks as both companies are eager to prove to Wall Street that their streaming businesses can be profitable growth engines.