Warner Bros. Discovery/Paramount Skydance Corporation merger - Variety: Warner Bros. Discovery Shares Spike on Report David Ellison’s Paramount Skydance Readying Acquisition Bid

Story from Variety:

Shares of Warner Bros. Discovery shot up as much as 33% Thursday on a report by the Wall Street Journal that Paramount Skydance is prepping a takeover bid of Warner Bros. Discovery in its entirety.

According to the Journal report, Paramount Skydance’s bid will be for Warner Bros. Discovery as it exists currently — despite Warner Bros. Discovery’s plans to split into two separate companies next year (Warner Bros., comprising studios and streaming, and Discovery Global, including TV networks and Discovery+). The article said the Paramount Skydance bid would be “majority cash” but did not specify a price.

Paramount Skydance’s offer for Warner Bros. Discovery, which cited anonymous sources, is “backed by the Ellison family,” according to the Journal. That’s a reference to Larry Ellison, the Oracle founder who is one of the world’s wealthiest individuals with a current net worth of $370 billion. He is the father of David Ellison, the chairman and CEO of the new Paramount Skydance. The Ellison family put up about $6 billion of the money for Skydance Media’s deal to buy Paramount Global, with around $2 billion contributed by private-equity firm RedBird Capital Partners.

Reps for Paramount Skydance and Warner Bros. Discovery did not immediately respond to Variety‘s requests for comment.

At market close Thursday, Warner Bros. Discovery stock was up 29% for the day, to $16.17 per share — putting its market cap at $40 billion, a single-day gain of about $9 billion after the stock bump. Shares of Paramount Skydance, which trade under the symbol “PSKY,” closed up 15.6%.

The cost to buy Warner Bros. Discovery would also need to factor in its significant debt load. As of June 30, Warner Bros. Discovery’s total debt outstanding was $35.6 billion even after recent debt retirements.

A major rationale fueling Paramount Skydance’s interest in buying Warner Bros. Discovery would be to pool their streaming operations — to achieve greater global scale and compete with larger rivals Netflix and Disney+/Hulu.

As of June 30, 2025, Paramount+ tallied 77.7 million subscribers, a decrease of 1.3 million in the quarter, primarily reflecting “the expiration of an international hard bundle deal,” Paramount Global said in posting second-quarter 2025 results (its last under the previous ownership). Warner Bros. Discovery’s direct-to-consumer streaming division, largely comprising HBO Max, had 125.7 million subscribers as of the end of June (gaining 3.4 million in the quarter) and the company has said it anticipates hitting more than 150 million subscribers by the end of 2026.

David Ellison has outlined a tech-forward strategy to boost Paramount’s streaming business, which includes plans to consolidate Paramount+ and free, ad-supported streamer Pluto TV on a common tech stack. Ellison and Jeff Shell, Paramount Skydance’s president, also have discussed a desire to forge partnerships with other streamers.

At an Aug. 7 press conference in New York, just hours after the official close of the Skydance-Paramount deal, Ellison said that on the streaming front, “we’re open for business to explore everything.”

A combo of Paramount Skydance and Warner Bros. Discovery could also provide cost synergies and economies of scale for the companies’ film and TV network businesses. Paramount’s TV stable includes CBS, Comedy Central, Nickelodeon, MTV and BET, and Warner Bros. Discovery’s includes CNN, TNT, TBS, Discovery, Food Network and HGTV. In particular, a merger that brought together CBS News and CNN would yield obvious synergies.

The Ellison family owns 100% voting control of Paramount Skydance. Skydance closed its takeover of Paramount Global five weeks ago following FCC approval of the deal. Ellison has installed a new management team, which includes Shell, ex-Netflix exec Cindy Holland as head of the direct-to-consumer streaming business, and COO and chief strategy officer Andy Gordon, who formerly led the West Coast office of RedBird.

David Ellison has said the company (which calls itself “Paramount, a Skydance Corporation”) expects to cut more than $2 billion in costs from the company. That will include mass layoffs, with as many as 3,000 jobs expected to be eliminated by early November, Variety has reported.

Prior to Skydance clinching its deal in July 2024 for Paramount Global, which involved buying out previous controlling shareholder Shari Redstone, the CEOs of Warner Bros. Discovery (David Zaslav) and Paramount (then-CEO Bob Bakish) had discussed the possibility of a merger in late 2023. But those talks did not progress beyond an initial exploratory meetup.

Among those weighing in on Paramount Skydance’s potential bid for Warner Bros. Discovery was Sen. Elizabeth Warren (D-Massachusetts), who said on X that such a media merger “must be blocked as a dangerous concentration of power.”

Warren had pressed Skydance and Paramount for details on whether their execs had engaged in “corrupt side deals or political favors” with the Trump administration to get the merger approved. In addition to calling Paramount Global’s $16 million payment to Trump to settle his lawsuit (alleging CBS News’ “60 Minutes” deceptively edited an interview with then-VP Kamala Harris) a “bribe,” Warren cited Trump’s claim that the new owners of Paramount promised $20 million worth of free advertising. “Remember when Trump announced a multimillion-dollar secret deal with CEO David Ellison? And then — shocker — Trump approved Ellison buying CBS/Paramount,” the senator wrote. “Now, Ellison wants to take over CNN/Warner Bros.”

At the Aug. 7 press conference, David Ellison did not confirm or deny such a “side deal” when queried about Trump’s claim. “We are not going to politicize anything today,” Ellison responded. “We want to entertain first.”