A massive shakeup in the entertainment industry could be in the works as Warner Bros. Discovery and Paramount Global have recently held talks for a possible merger of the two media giants that both encompass movies, TV, and streaming.

Variety has confirmed that Paramount Global CEO Bob Bakish and Warner Bros. Discovery CEO David Zaslav met during a lunch meeting in New York on Tuesday. There, the two discussed a possible merger between two of the biggest media empires in the world.

Reports also indicate that Zaslav has also already spoken with Shari Redstone who owns the National Amusements Inc., which in turn owns a controlling stake in Paramount Global. However, representatives for both companies declined to comment on this news about a possible Warner Bros. Discovery and Paramount merger.

As the two sides are still in talks about a possible merger, its terms are still not known, with this still being the preliminary stage of the talks. Should this happen, though, this could mean that the entire entertainment industry could very much be shaken up.

Paramount Global and Warner Bros. Discovery Both in Debt Ahead of Possible Merger

Reports of the possible merger came as both companies were saddled with massive amounts of debt. Currently, Warner Bros. Discovery has been cutting costs and this has made many on Wall Street positive on the company, according to CNN.

On the other hand, Paramount Global reported a long-term debt of $15.6 billion, which is much less than Warner Bros. Discovery, which has a debt load of $43.5 billion. Despite this, however, Warner Bros. Discovery still has the higher market value with a market capitalization of $28.4 billion as of the close of trading on Dec. 20. It is worth over twice more than Paramount's, which stood at $10.3 billion.

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However, it is noted that buying Paramount would not help Zaslav's effort to unwind his company's debt burden as both companies are billions of dollars in debt.

Of the major media companies, Warner Bros. Discovery had the largest increase in stock, being up by 23%. Meanwhile, Disney is up just 5%, and Paramount has fallen 8%.

Warner Bros. Discovery and Paramount Global Struggling as Streaming Becomes More Popular

The struggles both companies are currently having may be because of the advent of streaming. While they each have their own streaming services, with Warner Bros. having Max and Paramount having Paramount+, both are eclipsed by the two heavyweights in the industry, Netflix and Disney+.

Because of Netflix, consumers have largely abandoned cable TV, and this was where the two companies also got much of their revenue. However, USA Today noted that streaming itself also has its own set of problems as competition is fierce and all companies are experiencing slowing subscription growth.

A merger between Warner Bros. and Paramount would likely mean that they would pool their assets together, including combining their Max and Paramount+ premium streaming services to take on Netflix, Disney+, and Hulu.

The merger could also mean that Warner Bros. will be able to get a treasure trove of properties from Paramount Pictures, including Terminator, Transformers, Mission: Impossible, Top Gun, A Quiet Place, Teenage Mutant Ninja Turtles, and many more. The two would also combine their cable tv operations, including channels like the Discovery Channel, HBO, Animal Planet, CNN, Comedy Central, and more.

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This article is owned by Latin Post.

Written by: Rick Martin

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