Paramount+ signage within the Times Square neighborhood of New York, US, on Thursday, Dec. 21, 2023.
Gabby Jones | Bloomberg | Getty Images
David Ellison seems to be shopping for up a media empire.
The CEO and chairman of the newly minted Paramount Skydance has tapped an funding financial institution to assist put together a takeout supply for Warner Bros. Discovery, in response to folks acquainted with the matter who spoke on the situation of anonymity to debate nonpublic dealings.
Warner Bros. Discovery had but to obtain a proposal as of Thursday, in response to folks acquainted. However, shares of the corporate soared nearly 30% Thursday afternoon, notching the inventory’s finest day of buying and selling on file.
Representatives for Paramount and Warner Bros. Discovery declined to remark.
Bringing Warner Bros. Discovery into the fold would add to Ellison’s rising listing of franchise acquisitions and sports activities media rights. WBD, which announced in June it plans to separate into two entities, has a set of fascinating belongings. Add these to Paramount’s assortment of mental properties and Ellison might have a content behemoth on his fingers.
“A bid for WBD would solidify the overlooked value of its portfolio of assets that was weighed down by its balance sheet,” Robert Fishman, analyst at MoffettNathanson, advised CNBC Thursday.
A mountain of content
Already in home, Paramount boasts films and tv exhibits from franchises like Star Trek, Transformers, SpongeBob SquarePants, Teenage Mutant Ninja Turtles, Paw Patrol, Scream and Mission Impossible.
More just lately, it has expanded its video game-based IP past Sonic the Hedgehog, which is a billion-dollar franchise in its own right, to snag the rights to make a Call of Duty theatrical film and the distribution rights to Legendary’s Street Fighter adaptation.
Warner Bros. Discovery has an enormous library of main franchises together with DC superheroes, Lord of the Rings, Game of Thrones and Harry Potter. It additionally has legacy cartoons like Scooby-Doo, Looney Tunes and Tom and Jerry. It can also be the distributor of Legendary’s Dune franchise and Godzilla and King Kong movies.
Last yr, Warner Bros. was the second-highest grossing studio at the global box office and Paramount was the fifth-highest, in response to information from Comscore.
In addition to bolstering Paramount’s theatrical slate, Warner Bros. Discovery’s streaming service HBO Max counts greater than 125 million subscribers as of the tip of the second quarter. Paramount+ at the moment has round 77 million streaming customers.
Chasing ESPN
In the wake of the Paramount-Skydance merger, Ellison additionally secured a $7.7 billion, seven-year deal to make Paramount the unique U.S. house for TKO Group’s UFC blended martial arts group. The settlement means UFC will cease its pay-per-view mannequin and occasions shall be out there on to Paramount+ subscribers and, in some circumstances, on CBS.
Sports rights are scarce and solely turn into out there when earlier offers expire. Apple is already anticipated to be the house of Formula 1, and Major League Baseball is ready till its offers expire after the 2028 season to reorganize its media packages. That implies that Paramount could have few different top-shelf sports activities belongings to bid on and purchase within the mid-term.
Meanwhile, Warner Bros. Discovery has the rights to broadcast video games from the National Hockey League, Major League Baseball and March Madness basketball together with the French Open and Nascar.
A possible tie-up between Paramount Skydance and WBD would exponentially broaden Paramount’s library of mental property and an arsenal of sports activities content that might assist it compete with Disney’s ESPN.