Paramount Skydance prepares cash bid for Warner Bros Discovery

New Delhi: Paramount Skydance is planning a majority cash bid for Warner Bros Discovery, according to a report by the Wall Street Journal, which cited people familiar with the matter.

Warner Bros Discovery is set to sell its entire operation, including its cable networks and film studio, the report said. The company announced late last year that it would reorganise into two separate divisions, one focused on traditional cable television and the other on streaming and studios.

The bid follows Skydance’s $8.4 billion acquisition of Paramount Global earlier this year. Skydance, run by David Ellison, son of Oracle co-founder Larry Ellison, is reportedly looking to add Warner Bros Discovery’s assets, including HBO and CNN, to its portfolio. If successful, the deal would unite some of the best-known entertainment brands, such as DC Comics’ Superman, Nickelodeon’s SpongeBob SquarePants, The Matrix and Star Trek.

Shares of Warner Bros Discovery rose as much as 30% after the report, while Paramount shares gained 15%, according to Reuters. Both companies have not officially commented.

Industry analysts say the potential merger would create one of the largest players in Hollywood, combining Warner Bros and Paramount alongside streaming platforms HBO Max and Paramount+. However, concerns about competition are likely to surface.

“I don’t know if the government will allow this,” Raymond Sfeir, director of the Anderson Center for Economic Research at Chapman University in Orange, California, told Bloomberg News. “It’s already a very concentrated industry to start with, and now you’ll have even more concentration. There will be less competition for streaming. When there is less competition, prices will increase over time.”

The report noted that consolidation would reduce Hollywood’s legacy studios to just four, intensifying scrutiny as traditional media companies contend with declining television viewership and advertising revenue while competing against technology giants such as Apple and Amazon.