Paramount Plans Bid for Warner Bros. Discovery

Media|Paramount Plans Bid for Warner Bros. Discovery

David Ellison, the media mogul who took over Paramount just last month, has already his sights set on another blockbuster deal: He wants to buy Warner Bros. Discovery.

Mr. Ellison is planning a bid for Warner Bros. Discovery, the parent company of HBO, CNN and the Warner Bros. movie studio, according to three people with knowledge of the plans.

A merger of the two Hollywood giants would reshape the media industry, putting some of the most renowned news and entertainment brands under the same roof. It would unite two of the biggest movie studios and two of the most influential news networks, CBS News and CNN.

The potential bid comes at a delicate time for Warner Bros. Discovery, which is already reorganizing its sprawling media business. The company said earlier this year that it would split its cable networks from its streaming and studio business, following a similar move at Comcast.

Mr. Ellison is interested in acquiring the entire company, in line with his strategy of doubling down on both streaming and traditional TV, according to the people with knowledge of the plans. The bid would be made mostly in cash.

A deal to acquire Warner Bros. Discovery would be costly. The company is worth $41 billion and has $35 billion in debt, remnants of the merger that brought it to life. But the Ellison family has the means: Larry Ellison, David Ellison’s father, is the co-founder of Oracle and one of the richest men in the world, with an estimated net worth of $383 billion, according to Bloomberg.

Mr. Ellison has moved quickly to transform Paramount since taking control of the company last month. The company struck a deal to license rights from the Ultimate Fighting Championship, reached a long-term agreement with the creators of “South Park” and commenced talks to acquire The Free Press, an against-the-grain digital publisher co-founded by Bari Weiss.

Mr. Ellison has long held ambitions to grow Skydance with acquisitions, particularly given the company’s small size relative to rivals like Comcast, two people familiar with the matter said. To succeed, he will need to persuade the board of Warner Bros. Discovery and its shareholders that they are better off selling the company now than waiting for its prospects to improve once it is separated into two companies.

Skydance, for its part, may be betting it can get a sweeter deal for the entire company — including its valuable steaming properties — rather than trying to cherry-pick choice assets afterwords.

The Wall Street Journal earlier reported on Paramount’s plans to acquire Warner Bros. Discovery, which sent the company’s stock soaring 20 percent.