Media giant "Paramount Skydance," which owns a leading terrestrial broadcaster and a global film studio, has moved to acquire "Warner Bros. Discovery (WBD)," which holds a global content asset. If the merger of the two giant media corporations goes through, a "media behemoth" with unprecedented clout in Hollywood film studios as well as the news and streaming service markets is expected to be born.
According to foreign media reports including the Wall Street Journal (WSJ) on the 11th (local time), Paramount Skydance is pushing to acquire the entire WBD enterprise on the strength of massive financial resources. The WSJ said the specific offer price had not been disclosed, but Paramount Skydance plans to pay most of it in cash. Backed by Oracle founder Larry Ellison's vast wealth, his son David Ellison created the new media giant by merging his own film studio Skydance with Paramount, which owns the CBS broadcaster and Paramount Pictures. Larry Ellison on the 10th overtook Tesla founder Elon Musk to become the world's richest person.
Once news of the acquisition push broke, WBD shares surged 29% on the New York stock market that day, sending its market aggregates to $40 billion (about 5.56 trillion won). Paramount Skydance shares also jumped about 16%, reflecting expectations for the debut of a new media behemoth. However, major outlets said a formal takeover offer has not yet been submitted, and there remains a possibility the deal could fall through under U.S. antitrust regulations.
The two companies hold numerous globally recognized intellectual property (IP). If their IP is combined at the moment of acquisition, it is expected to generate an immediate and powerful synergy effect. WBD owns IP with worldwide fandom such as "Harry Potter," DC Comics, "The Lord of the Rings," and "Game of Thrones." Paramount has Hollywood's flagship hits like "Mission: Impossible," "Top Gun," "Transformers," and "Star Trek."
If the two companies merge, a "franchise empire" rivaling Disney's Marvel, Star Wars, and Pixar could be created. Variety, a pop culture trade outlet, said it would be "the largest combination of two storied Hollywood studios under one corporations."
However, legal experts said the birth of a giant studio could face antitrust review on the grounds that it may reduce content diversity and weaken creators' bargaining power. In the past, after Disney acquired 20th Century Fox, the number of films produced annually plummeted rather than creating synergy. That was because Disney's strategy focused on blockbusters that guaranteed global box office returns clashed with 20th Century Fox's strategy, which included not only blockbusters but also R-rated films for adult audiences and quality mid-budget films. There were also concerns that greater dependence on mega-hits could further shrink the space for mid-budget or independent films.
If the two companies settle under one roof, a reshuffle of the global streaming market will be inevitable. WBD currently operates HBO Max, and Paramount runs Paramount+. Each has, on a global basis, 126 million paying subscribers for HBO Max and 78 million for Paramount+. Combining the two services would push global subscribers past 200 million. It would still trail Netflix, which has more than 300 million, but would be large enough to handily outpace Disney+, which is around 130 million.
The key is not merely adding subscriber counts, but how to integrate the other platforms currently in operation and generate synergy. Experts predicted that, given WBD is carrying net debt of about $30 billion (about 4.2 trillion won), considerable additional capital will be needed to secure high-quality content and competitiveness.
Integration of the news segment is cited as the most sensitive and complex issue. Paramount Skydance owns CBS News, a leading U.S. terrestrial news channel. WBD owns CNN, a leading cable news channel. If the two news channels belong to one company after the merger, they could maximize their influence on public opinion. At the same time, they are likely to face intense scrutiny from regulators, particularly from the Donald Trump administration.
Even when Skydance acquired Paramount 4th, there was a precedent in which approval of the merger was delayed as a legal dispute between President Trump and CBS dragged on. At the time, Paramount agreed to donate $16 million to the future Trump presidential library to resolve the dispute. The Federal Communications Commission (FCC) approved the merger on conditions including appointing an "ombudsman" to oversee fairness at CBS News and abolishing diversity programs.
Reuters, citing antitrust attorney Andre Barlow, said, "In this merger review process as well, political judgments in the news channel institutional sector could act as a variable." However, some predicted that given Chairman Ellison's father Larry Ellison has been a longtime ally of President Trump, political clout may be needed to overcome regulatory hurdles. There is also an outlook that the current Justice Department's Antitrust Division, which is far more pro-business than the Biden administration that applied particularly stringent standards to large corporations to prevent market monopolies, could apply looser standards than expected.