Paramount Global engaged in extensive merger discussions with Warner Bros. Discovery (WBD) for months before ultimately abandoning the talks and agreeing to a deal with Skydance Media, according to a regulatory filing released Monday.
The filing sheds light on Paramount’s efforts to find a buyer or partner following lower-than-expected financial results in 2023. The company held talks with at least 12 potential bidders, including WBD, Comcast, Byron Allen, and Apollo Global Management, according to a report from Bloomberg.
Warner Bros. Discovery Discussions:
Paramount’s then-CEO Bob Bakish and WBD CEO David Zaslav initiated merger discussions in December. However, by late February, Paramount’s board decided to cease sharing financial information with WBD due to the lack of a concrete offer.
Despite Zaslav’s continued interest, talks with National Amusements Inc., the Redstone family holding company that controls Paramount, indicated that WBD would need to pay a premium in cash, making a deal “challenging.” Discussions continued into April, but WBD remained unwilling to offer cash consideration to shareholders.
Exploring Other Options:
Paramount also held discussions with Comcast and, at one point, was an early leader for a merger deal. Comcast CEO Brian Roberts initially expressed interest in licensing content and later proposed a joint venture between Peacock and Paramount+, with Comcast retaining majority control. This would have seen both companies remain as independent companies with a joint streaming service with shared ownership.
Offers from Byron Allen and Apollo Global Management were also considered, but the board raised concerns about the lack of specifics and financing details.
Skydance Emerges as the Winner:
Amidst these discussions, Skydance, backed by Oracle co-founder Larry Ellison, persisted in its pursuit of Paramount. In April, Paramount granted Skydance exclusive negotiating rights, ultimately leading to the merger agreement announced in July.
The filing provides a glimpse into the complex and often protracted nature of merger negotiations in the media industry. While a deal with WBD could have created a media powerhouse, various factors, including valuation and deal structure, ultimately led to its demise. Paramount’s decision to merge with Skydance instead reflects the company’s strategic focus on content creation and its desire to navigate the evolving media landscape with a partner that aligns with its vision.