Warner Bros. Discovery (WBD) Chief Executive Officer David Zaslav has told staff he is "excited" about a potential merger with Paramount Global, a significant shift after months of pursuing a deal with Netflix. The pivot follows Paramount's unsolicited, higher-value offer for the entire company.
Addressing employees at a company town hall on Friday, Zaslav stated that joining forces with Paramount could create a "great company." A recording of the internal meeting was obtained by Business Insider. "We're getting bigger, and we're getting stronger," Zaslav said on the call.
Strategic Reversal Following Paramount's Bid
WBD had previously agreed to sell its studio and HBO assets to Netflix for $27.75 per share. Paramount subsequently launched a rival bid of $30 per share for the whole company, including its cable television networks, arguing it represented superior value for WBD shareholders.
Zaslav acknowledged the sudden change in strategy, stating the decision to switch from the Netflix agreement to Paramount's offer "all happened very quickly." He described the process as feeling "a little whiplash-y," adding that he and WBD's board of directors were still "getting our bearings."
Defence of the Decision and Future Challenges
The CEO defended the move, stating Paramount "acted with determination" in its pursuit. He explained that WBD underwent a "thorough, rigorous strategic review process" and was legally obligated to evaluate unsolicited offers that could deliver greater shareholder value.
Zaslav framed the potential merger as critical for WBD's long-term survival in a consolidating media landscape. "If Warner Bros. is going to survive, then we needed to be bigger, and we needed to be global," he said, warning that "some of these companies are getting so big that they can just run us over."
Regulatory Hurdles and Fallback Plan
The proposed Paramount-WBD deal is not guaranteed and must first clear regulatory approval, a process Zaslav indicated could take at least six to twelve months. He outlined a contingency plan, noting, "The deal may not close. If it doesn't close, we get $7 billion, and we get back to work."
The context for the merger includes significant cost-saving targets. Last week, WBD's board warned shareholders that accepting Paramount's deal could trigger an employee exodus, citing the $6 billion in savings planned by Paramount's controlling shareholder, Shari Redstone. In contrast, Netflix had projected savings of $2 billion to $3 billion from its now-abandoned arrangement with WBD.