David Ellison, head of Paramount, shared his plan to merge with Warner Bros. Discovery. A key part of this involves combining their streaming services, HBO Max and Paramount+, which currently have over 200 million subscribers combined.
Ellison explained during a Monday investor call that the deal allows them to effectively compete with industry leaders. This came after Paramount unexpectedly completed the $110 billion acquisition late last week – a deal Ellison’s team had been working on for six months.
Ellison mentioned some of the well-known franchises that Paramount—the studio behind “Mission: Impossible” and “Top Gun”—will gain access to when it merges with Warner Bros. Warner Bros. currently owns the rights to popular series like Harry Potter, “Lord of the Rings,” DC Comics, and “Game of Thrones.”
The new company’s success hinges on boosting its streaming service to better compete with leaders like Netflix, which has 325 million subscribers globally, as well as Walt Disney and Amazon Prime Video.
Okay, so if these two media giants merged, they’d suddenly have a ton of cable channels to deal with. I’m talking about classics like CBS and Nickelodeon from Paramount, plus big names like CNN, TNT, and even the Food Network from Warner Bros. It’s a huge portfolio, and figuring out how to manage all that linear TV would be a massive undertaking, honestly.
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After Netflix finalized its purchase of Warner Bros., the Ellisons and their colleagues immediately started planning how to regain their footing.
Traditional cable channels are seeing fewer viewers as more people switch to streaming services. Paramount, which still makes a significant amount of money from its cable channels, stated on Monday that it doesn’t intend to sell any of them, as those profits are currently being used to pay off debts.
When Warner Bros. Discovery first took over, it declined requests to sell CNN, stating the network was a valuable part of its business.
It will take some time for these two streaming services to fully combine. First, Warner Bros. Discovery shareholders need to agree to the deal, and then regulators in different countries need to approve it. So far, Germany and Slovakia have indicated they are on board.
Next, the company faces significant technical hurdles as it moves its technology to new systems, especially given its large cloud-computing contracts. According to Ellison, this integration process will happen gradually “over the next several years.”
During Monday’s conversation, Ellison tried to reassure people that the merger wouldn’t just lead to more job losses and reductions in what’s available to watch, issues that have become common at Warner Bros. Discovery.
Warner Bros. Discovery, led by CEO David Zaslav, has been working hard to reduce the massive debt it took on when it acquired WarnerMedia in 2022. The company currently has $33.5 billion in debt, which Paramount would need to take on along with its own expenses and debts if the two companies were to merge.
I was really glad to hear Kevin Ellison publicly thank HBO and their leadership, especially Casey Bloys. He’s a hugely respected figure in the industry, and it’s clear everyone appreciates his work.
Ellison’s move seemed designed to address concerns about whether Bloys and Cindy Holland, the head of streaming at Paramount, could successfully work together after the merger of Paramount and Warner Bros.
According to Ellison, HBO is a hugely valuable asset. It will continue to receive the funding and creative freedom it needs to excel. They also plan to keep licensing HBO content to other services and will continue producing shows through their television studios, with a commitment to expanding those studios and the successful programs they create.
Ellison stated that HBO wouldn’t be changed and would continue to pursue its current goals. He emphasized, “We want HBO to remain HBO.”
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Warner Bros. Discovery has reversed course after removing the ‘HBO’ name from its streaming service two years ago.
The new plan is for Warner Bros. and Paramount to operate as mostly separate film studios, both releasing around 15 movies each year. According to Ellison, the combined company will continue to release films in theaters for 45 days before making them available on streaming services.
As a big movie fan, I was really relieved to hear that they weren’t planning on cutting the money for actually making the films. Ellison himself said they have no plans to reduce production budgets, which is great news for everyone who loves seeing new movies!
Despite the merger, the new company will start with a significant debt of $79 billion, making it one of the biggest leveraged buyouts ever. The son of Oracle’s co-founder, Larry Ellison, is financially supporting the deal, but the new company will have $25 billion more debt than Warner Bros. Discovery did, which resulted in numerous layoffs.
Paramount’s COO, Andrew Gordon, confirmed the company plans to cut costs by $6 billion. These savings will primarily come from streamlining its streaming services – like Paramount+ and HBO Max – by using fewer technology platforms and cloud providers, as well as reducing office space worldwide.
It’s currently unknown if Paramount will sell its historic studio lot on Melrose Avenue and relocate to the Warner Bros. studio in Burbank. Warner Bros. has a much larger and better-maintained lot, likely due to years of greater investment compared to Paramount (previously Viacom).
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What the Paramount-Warner Bros. Discovery deal means for the cable network CNN.
Gordon stated that the company is working to attract investment, expand its operations, and pay down its debts in the short term.
Gordon explained that Paramount paid Netflix a $2.8 billion fee on Friday, enabling Warner Bros. Discovery to cancel their previous agreement signed on December 4th. As part of the deal, Paramount will pay $31 per share to Warner Bros. Discovery’s investors.
According to Ellison, his plan to acquire Warner Bros. isn’t about simply making the company bigger, but about fundamentally changing how the business operates.
Mid-day Monday, Paramount Skydance shares were trading down about 1% to $13.30.
Netflix’s stock increased by 1% to close at $97.24. Warner Bros. Discovery’s stock price remained unchanged at $28.40.
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2026-03-02 22:01