By Oliver Darcy | CNN
Warner Bros. Discovery Chief Executive David Zaslav met on Tuesday with Paramount Global Chief Executive Bob Bakish, and they broached a potential merger between the two companies, two people familiar with the matter told CNN.
A potential merger of the two media giants would create an entertainment and news juggernaut, encompassing Warner Bros. and Paramount studios as well as CBS, CNN, and other cable television assets.
The discussion over lunch, which was first reported by Axios, took place at Paramount’s global headquarters in New York City’s Times Square.
Spokespeople for Warner Bros. Discovery and Paramount declined to comment.
While a potential merger between the two studios could once again upend the media industry, the talks aren’t a complete surprise. Zaslav, who executed a number of acquisitions at Discovery, has talked in recent months about going shopping for additional assets to boost Warner Bros. Discovery’s content offerings.
Meanwhile, Paramount is in need of a strategic partner to survive in the current media landscape. Shari Redstone, the family heiress of Paramount’s parent company, National Amusements, has reportedly been in talks to sell her stake in the company.
A person familiar with the matter confirmed that Zaslav has spoken to Redstone about a possible deal.
Analysts expect consolidation in the media business to continue as legacy entertainment companies bulk up in their efforts to compete with tech titans in Silicon Valley, which are increasingly wading into the content space.
Investors weren’t happy, though: Warner Bros. Discovery’s (WBD) stock fell immediately after Axios published its report and ended the day down 5.7%. It fell another 1.4% in after-hours trading. Paramount’s stock rose initially on the report but was a little less than 1% lower after hours.
Challenges ahead
Both companies face significant challenges in a rapidly shifting media environment. Linear television ratings are…
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