Paramount Skydance has the inside track to acquire Warner Bros. Discovery, according to well-placed media executives and it’s all about a cable network that has a troubled relationship with Donald Trump. As first reported by The Post, the battle for control of WBD officially kicked off on Thursday at noon, as Paramount Skydance, Comcast and Netflix submitted bids for WBD, which owns the No. 1 Hollywood studio and the No. 3 streaming service in addition to HBO and CNN. In a twist that is in some respects surprising, it is CNN that is seen as key to giving Paramount Skydance a leg up on other bidders, I am told. That’s because PSKY’s owners tech titan Larry Ellison and his Hollywood mogul son, David Ellison appear to be the only bidders that so far are interested in buying the WBD cable-news subsidiary as part of the deal. They see CNN, warts and all, as a very profitable business worth saving. Trump, meanwhile, desperately wants CNN whose correspondents regularly spar with him at the White House and on Air Force One “neutralized” out of its anti-MAGA coverage, one top broadcast executive recently told. And in his thinking, Larry Ellison, the billionaire Trump donor who is co-founder of software giant Oracle, is the perfect vehicle to set CNN straight. Specifically, Trump wants the Ellisons to do to CNN what they are doing with their CBS subsidiary after hiring Bari Weiss, the right-of-center columnist who is under orders to squeeze left-wing bias out of its news programming. If Paramount Skydance wins the bidding battle, Weiss’s portfolio is expected to expand to also include oversight of CNN’s editorial, according to sources. ‘White-glove treatment’ Given all of the above, the Ellisons’ bid is seen gliding through the Trump regulatory gauntlet. Meanwhile, Brian Roberts’ Comcast and streaming giant Netflix are poised to get the mother-of-all regulatory reviews. “The Ellisons will get the white-glove treatment and an easy 6 months before approval,” one telecom lawyer who served in government told me. “Brian Roberts gets a proctology exam that could last two years. Same with Netflix. The Warner board might just say it’s not worth the wait.” The Ellisons, it should be underscored, aren’t looking to take control of CNN just to make nice with The Donald. Sources at the company say they actually like CNN’s business despite the broad decline in linear TV viewership and its lowish ratings particularly compared to my employer, Fox News. People at Paramount Skydance point to CNN’s global news reach with reporters in just about every country. It’s in every airport, it seems, and every hotel. They believe the network which still churns out an estimated $500 million in yearly profits can be made more profitable by combining it with CBS’s news infrastructure and continuing its migration to digital platforms away from traditional cable. Larry Ellison can easily afford to make that happen. Since The Post first broke the news of a looming WBD auction back in September, its CEO, David Zaslav, a shrewd media dealmaker, has said he wants a deal that “starts with a 3” namely a deal valued at $30 a share, or $70 billion. He only gets that with a real-live bidding war, and media insiders are increasingly dubious. First, neither Comcast nor Netflix will likely shell out that much because they are only bidding for chunks of WBD as opposed to the whole company. In selling pieces of the company, WBD could be hit with a tax bill known as tax leakage that is common in such M&A transactions, depressing its valuation. Regulatory pressure Then there’s the regulatory mountain which both Comcast and Netflix have to climb and which Paramount doesn’t. Brian Roberts is set to spin off his Trump-hating cable channel, MSNBC, nullifying some of the antitrust issues on media consolidation. But Trump isn’t about to forgive him for years of abuse at the hands of Rachel Maddow & Co. Accordingly, the thinking among lawyers who work on such deals is that if Comcast wins the bidding war, his antitrust chief Gail Slater will sue to stop the deal, focusing a lengthy probe on the fact that Comcast will be merging its Universal Studios with Warner Bros. Roberts can go to court to plead his case and it’s worth noting that the government has a horrible record on such lawsuits. Still, we’re talking nearly two years of legal wrangling that the WBD board might think isn’t worth the trouble. Netflix faces similar hurdles because it would combine its No. 1 streaming service with WBD’s No. 3. And let’s not forget its political baggage. While Roberts has the MSNBC albatross, Netflix is run by Reed Hastings and Ted Sarandos, who have spent years supporting progressive causes from the Left Coast. That’s why the Ellisons believe they can get away with paying no more than $27 a share for WBD significantly below Zas’ $30 a share bogey.
https://nypost.com/2025/11/22/business/paramount-skydance-is-currently-winning-the-war-to-acquire-warner-bros-discovery/
Tag: paramount
Paramount Shares Jump After Q3 Earnings Report And David Ellison Comments
Paramount shares jumped more than 10% on Tuesday following the release of the company’s third-quarter earnings report and a strategic update from CEO David Ellison and his management team. The stock climbed above $16.90, reaching its highest level in two weeks midway through the trading session. However, trading volume on the Veterans Day holiday was lighter than average.
Since the August 7 close of the Paramount-Skydance merger, shares have surged nearly 50%, though they have remained relatively flat in recent weeks. Paramount’s quarterly revenue came in slightly below Wall Street analysts’ expectations, alongside other less-than-stellar data points in the report. Still, with the merger timing meaning current management wasn’t fully in control for the entire quarter, investors focused more on executive commentary about strategy than on the financials themselves.
During the earnings call on Monday, Ellison shared insights aimed at intriguing investors. While acknowledging possible merger and acquisition (M&A) opportunities, he refrained from discussing specific targets. “We really look at this as ‘buy versus build’ and we absolutely have the ability to build,” he said.
Notably, shortly after finalizing the Skydance merger, Ellison and his team have made three offers to acquire all of Warner Bros. Discovery (WBD). WBD, for its part, has confirmed it is also considering interest from outside parties in its studio-and-streaming division and is still weighing plans to formally split into two companies.
Paramount also raised its cost savings target from the Skydance deal, increasing the goal to $3 billion, up from $2 billion. In addition, the company announced plans to significantly ramp up its film and TV output. On the streaming front, Paramount has made bold moves by adding UFC bouts without charging subscribers extra, using this value-add to justify an upcoming price increase scheduled for January.
Wall Street analysts responded to the earnings report with generally cautious, measured reactions, emphasizing the long timeline typically involved in M&A activity. A strategic chess game is unfolding among Ellison, WBD CEO David Zaslav, and other interested players like Comcast and Netflix. Even once more clarity emerges in the coming weeks and months, any proposed combination would introduce further uncertainty and transition.
Jessica Reif Ehrlich, an analyst at BofA Securities, captured the mood in her client note titled “Sky High Ambitions But Patience Required is Paramount.” Despite rating the stock as “underperform” (sell), she raised her 12-month price target from $11 to $13. She cautioned, “There are still many unknowns on the strategic initiatives the company has undertaken and, as evidenced by prior large combinations, restructurings often take years to implement.”
Doug Creutz of TD Cowen, who holds a “hold” rating on the stock, acknowledged that the management team did a “credible job” outlining their vision. “Unsurprisingly,” he added, “the plan is another variant on the old standby ‘cut lots of expenses and make better content.’ Execution will be critical.”
Robert Fishman of MoffettNathanson argued that the newly combined company is “off to a promising start.” However, he noted concerns about Paramount’s plan to increase content spending by $1.5 billion annually alongside boosting Paramount+. “The question that hangs over this approach,” Fishman wrote, “is the level of investment required for the company’s direct-to-consumer (DTC) offering to truly compete with the likes of Netflix, Disney, and Amazon – all of which hold a considerable lead in global scale, content output, and engagement.”
Fishman believes that to accelerate its DTC growth, M&A is likely the most viable path Paramount Skydance will pursue. He maintains a “neutral” rating on the stock.
Similarly, Guggenheim’s Michael Morris, also neutral on Paramount shares, highlighted the company’s simultaneous increase in cost savings projections and lowering of profit guidance, likening it to “media merger déjà vu.” Unless a WBD transaction materializes, he wrote, Paramount “is running a very similar playbook to that of Warner Bros. post the Discovery combination in 2022, where optimism and increased synergies yield lower financial estimates.”
As the strategic moves unfold, Paramount’s journey remains one to watch, with execution and M&A developments likely to define its trajectory in the months ahead.
https://deadline.com/2025/11/paramount-shares-jump-q3-earnings-david-ellison-comments-1236614077/