In December, we reported that Max and Paramount Plus were in serious talks about joining forces; the two entertainment companies were considering a “mega merger” that would allow them to better compete with Disney Plus (and its merger with Hulu) and Netflix on both big and small screens.
In the US, that could have meant combining the Max and Paramount Plus services into one super streamer.
It’s an interesting prospect, but it looks like that won’t happen now: according to CNBC, the talks have ended and Warner Bros. Discovery is no longer pursuing a merger. CNBC says it has “turned the pencils down” after “kicking the tires for several months” amid a decline in stock prices for both companies: Warner Bros. stock. Discovery fell 10% last week after missing revenue targets and is nearing a 52-week low, while Paramount Global is also nearing a 51-week low ahead of today’s earnings report.
So where does that leave Paramount?
Paramount could still be sold
The report says Paramount still has a number of potential suitors. Media mogul Byron Allen has already offered $14 billion for the company, although as CNBC notes he has a history of bidding and then not buying; and while Comcast isn’t interested in acquiring the company outright, it is apparently still working with bankers to explore a possible commercial partnership with Paramount Global. That could mean bundling or combining Comcast’s Peacock service Paramount Plus. Another potential partner or buyer, Skydance Media, is apparently still interested as well, although the details of the talks are currently private.
Paramount is one of the most historic entertainment brands in the US, home to Hollywood studios, CBS and many other well-known brands. But as a traditional company that still relies heavily on network TV, cable and movie theaters, it has struggled in the streaming era and was hit particularly hard by the COVID pandemic. According to the LA timesit has also suffered from a legacy of poor decisions and under-investment in the 2010s and needs significant investment to return it to its former glory.
For example, the LA Times had already predicted that there would be no merger between Warner and Paramount: in a conversation with an analyst who asked not to be named, it reported their comments that there was no “clear path to a deal for Warner Bros. Discovery or Allen Media Group.” According to the analyst, the most likely deal is between Skydance and Paramount, especially since “the process of ironing out terms is reportedly ongoing.”