In what could become the biggest shake-up in Hollywood since Disney’s $71 billion takeover of 21st Century Fox in 2019, Paramount Skydance Corp. is preparing a bid to acquire rival Warner Bros. Discovery Inc., according to a Bloomberg report. The move, spearheaded by filmmaker David Ellison and backed by his billionaire father Larry Ellison, could shrink the roster of legacy U.S. media giants from five to four.
Paramount, which recently came under David Ellison’s control, is working with an investment bank on the offer. While no direct talks with Warner Bros. Discovery have been held yet, people familiar with the matter said the potential deal is being structured largely as a cash transaction. Financial specifics remain undisclosed.
Seismic impact on the entertainment industry
Warner Bros. Discovery has already begun reshaping its business, announcing in June that it would split operations into two entities—one focused on cable television, the other on streaming and studios. For chief executive David Zaslav, any takeover bid would have to carry a significant premium, as he works to highlight the company’s higher-value assets such as HBO and Warner Bros. studios, while disentangling them from its debt-heavy cable networks.
If successful, the merger would consolidate some of Hollywood’s most iconic franchises under one roof—Paramount’s Mission: Impossible, The Godfather and Yellowstone alongside Warner Bros.’ Harry Potter, Batman, Casablanca, and HBO classics like The Sopranos. Paramount would also gain control of two of Southern California’s major studio lots, strengthening its grip on the entertainment capital.
Market reaction and industry backdrop
News of the possible takeover sent Warner Bros. Discovery shares soaring 29% to $16.15 in New York on Thursday, lifting its market capitalisation to $40 billion and enterprise value to $71 billion, including net debt. Paramount shares also jumped 16% to $17.46, valuing the company at over $19 billion, with $11.6 billion in net debt.
The prospective merger comes amid sweeping industry-wide changes. Traditional studios have been battered by cord-cutting, falling box office receipts, and fierce competition from streaming giants such as Netflix and YouTube. The pressures have triggered cost-cutting, layoffs, and restructuring across the sector, including Comcast’s plan to spin off MSNBC, CNBC, and USA Network into a new Versant Media Group by year-end. If the deal progresses, it would mark a landmark consolidation in Hollywood.