THB #454: Paramount Lunches

I am not a big fan of endless rumor-mongering for attention of the gossip class pretending to be journalists who are always popular until some big misstep takes them down on their own petard. I enjoy gossip like everyone else… but not when it takes the place of reality. Silly me.

But this scoop by Axios, which maybe not so coincidentally landed just as the stock market closed for the day, feels a bit more stable than most rumors… because it makes more sense than most.

Of course, the headline - Scoop: Warner Bros. Discovery in talks to merge with Paramount Global - doesn’t actually match the reporting - Warner Bros. Discovery CEO David Zaslav met with Paramount Global CEO Bob Bakish on Tuesday in New York City to discuss a possible merger - but welcome to 2023. When anyone in power says or does anything, it becomes extrapolation fodder for months and months and sometimes, more months.

The meeting, it seems, took place at Paramount’s offices… which means that it could have been kept quiet, but was not. By choice. The result, after stock market hours, is that both companies are down by a little, less than 2%.

But what sets this apart is… it makes more sense than any rumor that has been on the table.

The media reporter at CNBC, Alex Sherman, continues to lead the charge on saying that Comcast, CNBC’s parent company, is a potential hard-charger in buying Paramount Global. But I continue to ask, “Why?” What does Paramount Global bring to NBCUniversal, besides a library (with decent IP) and some scale, that would make NBCU a better company? What about bringing together Paramount+ and Peacock would make that a better Streaming play? Who would buy CBS, which certainly could not be merged within the same ownership as NBC?

As I recall, this endless obsession with Comcast consuming another media company of size started with discussions within Comcast, going back to the pre-Peacock days, about finding a partner to scale up. But scale has, in reality, been debunked as the primary thing to focus on in Streaming. But still, this focus persists. Even the never-very-likely talk of Disney selling off ABC and ESPN in the last year has calmed down. But anytime a merger involving WBD or Paramount comes us, “What about Comcast?!?!”

Anyway… let’s focus for a moment on why this pairing is really the only major filmed entertainment merger that makes sense.

Real estate first… $300 million for the Paramount lot. SOLD!

And then, assets…

WBD doesn’t have a broadcast network. Paramount does.

The Cable Networks at the 2 companies have surprisingly little crossover. MTV has become a very narrow brand, but WBD only really has Cartoon Network as a over-12 youth brand of any kind after selling off the CW. What could they add up to together?

The Discovery/HGTV/TLC/Food Network group of networks has no reflection at Paramount.