Company Reports

Paramount hired Mattel CEO Ynon Kreiz to serve as co-CEO with CEO David Ellison starting Oct. 5, 2026. It also announced that the US District Court in Northern California has officially resolved the lawsuits Paramount settled on Sept. 21, clearing the way to close the Warner Bros. Discovery merger.

Paramount settled lawsuits brought by 12 US state attorneys general and the Writers Guild of America, paving the way for it to complete its acquisition of Warner Bros. Discovery soon, avoiding a March 2027 trial and the $7 million daily “ticking fee” if it didn't close by Sept. 30, 2026.

Paramount reported decent second-quarter results, with cost savings leading to profit growth across segments and streaming sales accelerating. However, ongoing developments in the Warner saga now make it clear that the deal will incur extra costs, regardless of the outcome.

Paramount has agreed to acquire Warner Bros. Discovery, and the outcome of an antitrust lawsuit, with a trial set for March 2026, will determine whether the firm can complete the merger. Like peers, Paramount has been in a period of transition as the traditional television business upon which it was largely built is in secular decline, and it has looked to replace this business with streaming. Warner faces identical challenges, and the greater scale a combined company would have should help preserve profits in legacy TV and lead to greater success in streaming. However, Paramount took on significant risk and offered to pay a steep price for this merger, so we didn’t think it would add value. With the difficulties in getting the deal completed, we now think it’s likely to destroy some value.

Paramount agreed not to close its Warner Bros. Discovery merger until June 2027, unless the lawsuit brought by several US states, led by California, is resolved sooner.

Paramount has made substantial progress in stabilizing revenue and enhancing profitability. Adjusted for last year's Skydance acquisition, total first-quarter revenue grew 1% year over year and adjusted EBITDA margin expanded 5 percentage points.

Like peers, Paramount has been in a period of transition and facing significant uncertainty about how and whether the traditional linear television business will co-exist or evolve in a media environment dominated by streaming services. Based on its current state, we think the company has the right strategy for streaming and advantages related to distribution and content ownership that will enable it to successfully manage the industry’s evolution.

After Warner Bros. Discovery deemed Paramount's revised bid for its company as superior to the one it had in place with Netflix, Netflix declined to exercise its right to match. We therefore expect Warner to officially accept Paramount's offer to buy the whole company for $31 per share.

Like peers, Paramount has been in a period of transition and facing significant uncertainty about how and whether the traditional linear television business will co-exist or evolve in a media environment dominated by streaming services. Based on its current state, we think the company has the right strategy for streaming and advantages related to distribution and content ownership that will enable it to successfully manage the industry’s evolution.

Fourth-quarter Paramount+ sales rose 18% year over year, and management expects growth to accelerate in 2026 following January price increases and growing subscriber gains. Direct-to-consumer EBITDA went negative after being positive the past two quarters, but 2026 EBITDA guidance was very strong.

Paramount revised its offer for Warner Bros. Discovery but did not disclose details. Variety reported the offer would likely be for $32 per share, up from $30. Netflix now has four days to respond and may raise its offer of $27.75 per share, which is for only the streaming and studios businesses.

With Netflix's approval, Warner Bros. Discovery has re-engaged in negotiations with Paramount in pursuit of the best deal for shareholders. Talks will remain open through Feb. 23, and Paramount has said that it is willing to improve upon its offer to buy all of Warner for $30 per share in cash.

Paramount amended its offer for Warner Bros. Discovery but maintained the headline amount of $30 per share. Until the deal closes, Paramount will now add $0.25 per share to its offer every quarter beginning in 2027. Paramount will also pay the breakup fee that Warner would owe Netflix.

With a tender offer to Warner Bros. Discovery shareholders outstanding, Paramount revised details of its bid but maintained the value: $30 in cash per share. Larry Ellison is now personally guaranteeing the equity financing, and Paramount will pay Warner $5.8 billion if it cannot complete the deal.

Warner Bros. Discovery urged shareholders to reject Paramount's offer to buy their shares for $30 apiece and instead affirm the board's decision to merge only its streaming and studios business with Netflix. Netflix and Warner assert the Netflix bid is superior, while Paramount says the opposite.

Paramount Skydance has offered $30 per share in cash for all of Warner Bros. Discovery, forcing the latter's shareholders to weigh the bid against Netflix's $27.75 cash and stock offer (nearly 85% cash) for the streaming and studios business, which constitutes most of Warner's equity value.

CNBC reported that Netflix is the leading bidder to acquire Warner Bros. Discovery, and CNBC published a letter that Paramount sent to Warner alleging that Warner is running an unfair process. Paramount is likely bidding for all of Warner, while Netflix is interested only in streaming and studios.

Like peers, Paramount has been in a period of transition and facing significant uncertainty about how and whether the traditional linear television business will co-exist or evolve in a media environment dominated by streaming services. Based on its current state, we think the company has the right strategy for streaming and advantages related to distribution and content ownership that will enable it to successfully manage the industry’s evolution.

Paramount reported good third-quarter results, but those were less important than the detailed vision that new management laid out in its first earnings call since the merger with Skydance. Targets for investment, cost reductions, and near-term growth were all encouraging.

The Wall Street Journal reported that Paramount is preparing a cash bid to acquire Warner Bros. Discovery, though it did not say for how much. Surprisingly, the bid would reportedly include the declining global networks business from which Warner is preparing to separate.