TLDR
Paramount rejects claims of forming a consortium for a $71 billion Warner Bros Discovery bid.
Variety report alleged backing from Saudi, Qatar and Abu Dhabi sovereign funds.
Warner Bros Discovery shares rose 5.5%; Paramount gained about 2%.
Proposed structure included $21 billion from wealth funds and $50 billion from Paramount Skydance.
Warner Bros Discovery is reviewing strategic options after TV business declines.
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Paramount Skydance Corporation (PSKY) traded at $15.90, up 1.72%, as of 2:48 PM EST when the company publicly dismissed reports of a monumental deal.
Paramount Skydance Corporation Class B Common Stock, PSKY
Variety had published claims that Paramount Skydance was forming an investment coalition to bid $71 billion for Warner Bros Discovery. Paramount called the report “categorically inaccurate.” The company’s next earnings date has not yet been announced.
https://Twitter.com/Variety/status/1990843294977282539?s=20
Market Reaction to the Report
The market responded quickly to the speculation. Warner Bros Discovery shares surged 5.5%, while Paramount stock rose about 2% during the session. The sharp movements suggested investors were weighing the possibility of massive consolidation in Hollywood if such a bid were real.
Variety’s report cited unnamed sources claiming that Paramount Skydance was working with sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi. According to the report, these funds would each contribute $7 billion, totaling $21 billion, while Paramount Skydance would contribute $50 billion.
What the Alleged Deal Would Have Looked Like
The reported proposal described a structure where the wealth funds would take small minority stakes in the company created through the transaction. The sources also claimed that each fund would receive select perks such as an IP, a movie premiere, or a movie shoot under the terms of the arrangement.
Variety framed the potential move as a sign of how newly appointed CEO David Ellison is using his Silicon Valley and family connections to scale the studio. With support from his father, Larry Ellison, the Oracle co-founder and the world’s second richest person, the strategy would have represented a significant expansion of the media company’s ambitions.
Warner Bros Discovery’s Current Situation
Warner Bros Discovery is facing mounting pressure from declining television revenues. The company owns major brands such as HBO, CNN, TNT, Warner Bros Games, and the DC film universe. In October, the company confirmed it was exploring several options, including a full-company sale, splitting its businesses, or executing separate deals for Warner Bros and Discovery Global.
These discussions stem from severe challenges in the legacy TV sector, where falling cable subscriptions and shrinking advertising revenues have squeezed traditional media giants.
Paramount’s Clear Pushback
Paramount’s firm denial signals an attempt to prevent market confusion as it continues its own strategic transitions under David Ellison. While Variety’s report ignited investor interest, Paramount’s rejection suggests the company is not engaged in any talks resembling the proposal described.
The media landscape remains in flux, and both Paramount and Warner Bros Discovery are at pivotal crossroads, shaping the future of Hollywood consolidation.
