Investors have spoken. After preliminary talks between Warner Bros. Discovery and Paramount Global for a merger, the stock of Warner Bros. closed down 5.7 percent, and Paramount stock closed down two percent.
Besides the regulatory hurdles, such a merger will not be adding financial resources. It will probably be based on more cuts: personnel and services. Previous recent examples are of warning: Viacom merger with CBS did not improve their corporate fortunes, and the sale of Fox assets to Disney, reportedly only benefitted Fox.
According to financial news reports, the merger is driven by consolidation needed to simplify a streaming ecosystem with too many options and to compete against Netflix. The two companies’ streaming services have been notoriously struggling: Warner’s Max has 95 million subscribers, Paramount+ has 63 million subscribers, while Netflix reaches 247 million subscribers.
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