Under a Paramount-WBD merger, two struggling media giants would unite

Netflix has dropped out of the bidding war for Warner Bros. Discovery (WBD), making Paramount Skydance the expected owner of WBD. A Paramount-WBD merger remains subject to regulatory approval, but it’s likely that we will see a Paramount-Skydance-Warner-Bros.-Discovery media giant.

Such a conglomerate would unite two legacy media companies that have struggled with profitability for years and have strongly invested in streaming and cable.

With Paramount inching closer to WBD ownership, let’s look at what the union implies for streaming and cable.

A tale of two struggling businesses

Over the past few years, both WBD and Paramount have seen declining revenue and struggled with profitability, as summarized in the table below, leading to WBD becoming eager for a sale and Paramount throwing mountains of money at media mergers.

Quarter Paramount Skydance net earnings (in millions) Warner Bros. Discovery net earnings (in millions) Q1 2024 -554 -966 Q2 2024 -5,400 9,986 Q3 2024 1 135 Q4 2024 -224 -494 Full-year 2024 -6,190 -11,311 Q1 2025 152 -453 Q2 2025 57 1,580 Q3 2025 -257 -148 Q4 2025 -573 -252 Full-year 2025 -621 727

Paramount’s financial difficulties, combined with heavy reliance on the declining linear networks, are why analysts like Laura Martin, who covers entertainment and Internet at Needham & Company, say that Paramount “must have” WBD. Paramount is betting that the merger will lead to more consistent profitability by getting its streaming business out of the red and through content creation, theatrical releases, and licensing, as well as by deriving more value from its cable business.

HBO Max may become part of Paramount+

Paramount+ isn’t profitable. However, Paramount’s overall streaming business, including Pluto and BET+, has been narrowing losses. In Q4 2025, Paramount’s streaming business posted adjusted operating income before depreciation and amortization (OIBDA) of minus-$158 million (Paramount didn’t share full-year figures). Paramount+ grew revenue 17 percent year over year (YoY) and subscribers from 77.9 million in Q3 to 78.9 million.

WBD’s streaming business, per the company’s full-year 2025 earnings report, made $393 million adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), down from $409 million for 2024. WBD ended the year with 131.6 million streaming subscribers across HBO and Discovery+. WBD doesn’t break out numbers based on streaming service, but most of its streaming business is tied to HBO Max.

For comparison, Netflix, the largest subscription video-on-demand provider, reported net income of $11 billion for 2025. Netflix last reported its subscriber count at 301.6 million in January 2025.

For subscribers, the most obvious potential outcome is for HBO Max to become part of the Paramount+ streaming service. In November, Bloomberg, citing unnamed people familiar with the plans of Paramount CEO David Ellison, said that the executive would merge HBO Max “into the existing Paramount+ platform” because he thinks “combining the offerings will allow more people to see the work of film and TV show creators” and would be more “compelling” to subscribers.

A Paramount+ that encompasses titles from WBD would be larger and more valuable and, therefore, likely command higher subscription prices. Although Vikrant Mathur, co-founder of streaming technology provider Future Today, noted in an email to Ars Technica that “in the near term, it’s plausible that HBO Max and Paramount+ remain distinct brands but are offered in discounted bundles.”

Paramount could also fold Discovery+ or the CNN streaming service into Paramount+, but it hasn’t provided specific plans. An app that unifies Paramount+ with other streaming libraries could make finding content easier if it’s executed well.

A successful Paramount-WBD merger would be the largest streaming merger ever and would lead to further consolidation in the industry.

“What started as a fragmented but flexible streaming ecosystem is increasingly trending toward rebundling—fewer, larger super-platforms offering broader catalogues at higher price points,” Mathur said.

Paramount holds on to cable

Paramount’s WBD bid is unique in its aggressive push for cable channels, which are struggling with viewership and advertising revenue. Under a WBD merger, Paramount would add networks like HGTV, Cartoon Network, TLC, and CNN to its linear TV lineup, which currently includes Comedy Central, Nickelodeon, and CBS.

Although Paramount and WBD’s cable businesses are both in decline, they are both profitable. Paramount’s TV/media business, which includes its cable channels and production studios, reported $1.1 billion in adjusted OIBDA in Q4 2025. WBD’s cable business posted adjusted EBITDA of $1.41 billion that quarter.

Ultimately, a Paramount-WBD merger would put diversity of viewpoints at risk. Under Ellison’s ownership, CBS News has adjusted its approach with new editor-in-chief Bari Weiss. There have also been concerns about censoring CBS under Ellison’s Paramount, including from Stephen Colbert, who said this month that CBS forbade him from interviewing Texas Democratic Senate candidate James Talarico; CBS denied Colbert’s claim. Further, Paramount could have a lasting impact on CNN, including costs, layoffs, and coverage.

More to come

Regulatory scrutiny will be at the center of Paramount and WBD’s merger over the upcoming months. Federal approval is likely, but the merger also faces European regulation and potential state lawsuits. The theater industry is also lobbying against Paramount’s WBD merger.

Should a Paramount-WBD merger ultimately be greenlit, two declining businesses will be challenged to form a profitable one. Even with regulatory approval, Paramount-Skydance-Warner-Bros.-Discovery faces an uphill climb.

Although the bidding war may be settled, the fight for WBD is only beginning.