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Paramount: Warner Bros. Discovery, Paramount in discussions for a merger: Why it matters

Paramount will receive gross proceeds of $2.2 billion from the sale of Simon & Schuster, including a $200 million termination fee paid by Penguin Random House and the cash flow it received during the process.

Warner Bros. Discovery and Paramount may have discussed a possible merger. The CEOs of both the companies reportedly met in New York City this week to discuss the topic. If this happens, it will be one of the largest platforms to compete with Netflix and Disney+.Citing multiple sources, Axios reported that the meeting between Warner Bros. Discovery CEO David Zaslav held talks with Paramount CEO Bob Bakish, which lasted several hours, took place at Paramount’s headquarters in Times Square.

The duo discussed ways their companies could complement one another, for example, how each company’s main streaming service — Paramount+ and Max — could merge to better compete with Netflix and Disney+.Warner Bros. Discovery is said to have hired bankers to explore the deal.

Options on the table
There are no specific details to what the deal will include but there are two options available for Warner Bros. Discovery – either buy Paramount Global or its parent company, National Amusements Inc. (NAI). The report says both options are on the table.

“The bottom line: Talks between WBD and Paramount are still early and may not ultimately result in a deal. But given the acceleration of cord-cutting and the growing encroachment of Big Tech on media, neither company can remain on the sidelines for long,” it added.

Apple, Paramount may bundle their services
Earlier this month, a report suggested that Apple and Paramount Global may have been in talks to bundle their streaming services – Paramount+ and Apple TV+ subscription – to form a cost-effective subscription.

The Wall Street Journal reported that a combined subscription will effectively cost less than subscribing to both services separately. This is likely to help the companies attract cost-sensitive customers.

Apple TV+ subscription costs $9.99 per month and Paramount+ costs $5.99 per month, effective around $16 per month.


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