Paramount Will Buy Warner Bros

The most vexing obstacle for David Ellison and Paramount‘s expected offer to acquire Warner Bros. Discovery looks to be David Zaslav – though probably not for long.

As of now, Zaslav is moving ahead with a somewhat-still-fuzzy plan unveiled this past summer to split WBD in half by next spring to free the studio and streaming of several billion in debt and freefalling cable assets. At the same time, word on the Burbank streets is that Netflix or Amazon could be looking to add some DC or GoT to their balance sheets, alternatives promoted by the WBD CEO.

“David’s a dealmaker, that’s who he is,” a streaming exec asserts, putting emphasis on enhanced shareholder value as Zaslav’s endgame. “He’s always gauging the possibilities and getting the best value, and that is what I think he is doing here. Whether it works or not, who can say right now?”

Zaslav has reportedly engaged Goldman Sachs to gauge buyer interest and is valuing the company’s studios and streaming units at more than $30 per share, a premium to the $22 to $24 range floated by Ellison’s camp. On the other side of town, Paramount Skydance CEO Ellison, who of course is the son of Oracle overlord Larry Ellison (the second-richest man on the planet) is in discussions with Apollo and other private equity investors to join a potential $60 billion offer.

But what will the deep-pocketed Ellisons find if and when they take the reins? One thing, studio and Century City sources tell Deadline, is that the long and winding road to a regulatory green light from the Trump administration to close Skydance-Paramount last August established a template for further deals. The well-connected Ellison regime, whose patriarch has been a longtime Trump donor and White House visitor, anticipates it could seal a deal with the feds for the whole WBD enchilada in less than six months Stateside and within nine months in Europe and the UK – money music to shareholders’ ears.

With that, the Skydance founder and gang may have reasons for concern, industry insiders and Wall Street watchers say, and a case for trying to drive down the price, due in part to the timeline of the split. Zaslav recently said the division of WBD into Warner Bros. and Discovery Global would happen by April 2026.

Yet, with regulatory hoops to jump though, the notion of wrapping the transaction in the next six months is seeming increasingly optimistic. Looming beyond the planned split date is a June 2026 annual shareholder meeting that could be rough if the split isn’t accomplished or rescheduled by then.

“I think if you just look at David Zaslav’s performance, he’s pretty much failed shareholders every step of the way, right?” an insider exclaims. “Servicing debt and bad decisions eroded billions and billions in market cap since Discovery basically took over Warner Bros. three years ago.”

Says one East Coast banker with deep Hollywood ties who is wary of the upside of a WBD split: “My perspective is, they break up the company and they figure out how to get some more equity into it. Even then, their performance will lead to a bad balance sheet over time again.”

Yet, as Team Ellison circles, the quick-footed WBD CEO supposedly has attracted the interest of Amazon and Netflix as potential buyers – or at least that’s the word on Warner Boulevard. Off the lot, however, there’s skepticism that either the House of Bezos or the Ted Sarandos and Greg Peters-run streamer are truly interested.

“Amazon got stung by buying MGM with little to show for it, and the FTC just made them pay up a $2.5 billion civil penalty,” one studio (not Paramount) source says. “Buying Warner Bros any time soon doesn’t fit with their M.O.” Amazon did not respond to Deadline’s request for comment on a possible WBD purchase or interest.

Contacted by Deadline, Netflix shut down speculation by referring to co-CEO Peters’ blunt remarks on the subject earlier this week: “We come from a deep heritage of being builders rather than buyers,” Peters said Wednesday at the Bloomberg Screentime conference in Los Angeles. “One should have a reasonable amount of skepticism around big media mergers. They don’t have an amazing track record over time.”

On stage at the conference yesterday, Ellison declined to comment on a WBD buy. Paramount did not respond to a request for comment from Deadline on a possible purchase. Neither did WBD.

It seems that unless a presently unidentified proxy investor group or K-pop billionaire jumps in at the eleventh hour, the Melrose lot-based Ellison is the only one openly(ish) looking at buying Burbank’s debt-laden WBD one way or another.

“In the deal business, you’ve got to see where the leverage is with the potential buyer and the potential seller – that always depends on the performance of the company in hand,” a Wall Street source tells Deadline regarding the realities of what is ahead for Paramount and WBD.

“When you have the kind of performance that Zaslav has had, he doesn’t have a lot of options,” the moneyman adds. “Number one: it’s all boxed in. Number two: there are not a lot of companies that want to buy declining assets. Number three: shareholders, therefore, will be much more focused on certainty than on some fiction of fake buyers and corporate splits.”

The separation would follow years of retooling during the three-plus rocky years since WarnerMedia and Discovery closed their $43 billion merger. That was a much smaller company buying a much bigger one, resulting in about $50 billion in debt and handing operational control of the new entity to Zaslav despite Discovery’s minority stake in the merged company. Shareholders are generally bullish on the split plan, but they may like a hefty cash buyout better.

How much a pre-split Warner Bros Discovery is really worth is a question under debate among the town’s openly cash-infused player Paramount and its almost certain acquisition target. While specifics are fluid, Paramount and Ellison have landed on $60 million as a ballpark valuation, while WBD and Zaslav, unsurprisingly, have a higher number in mind.

“Zas is playing the odds to get the best deal he can on his timeline with the biggest bidder in hand,” an industry insider told Deadline, viewing the split as a Hail Mary pass that has a chance of being completed.

Even with a pre-pandemic box office level of $4 billion this year so far for the Michael De Luca- and Pam Abdy-led movie studio, Zaslav and CFO Gunnar Widenfels have had to pare and pare to pay down debt. In June, it stood at $35.6 billion.

In quarter after quarter, many missing targets, Zaslav and Weidenfels expressed surprise at just how bad things were at Warners once they got a good look under the hood; they said that hadn’t really been possible until the deal formally closed in April 2022. Among the challenges they found: HBO worked in silos and was overstaffed; streaming was bleeding cash; and there was superhero fatigue. WBD took a series of big write-downs for content, a huge one for cable, lost the NBA, created chaos at the viewer-bleeding CNN and flip-flopped over the DTC branding of HBO and Max.

Yes, even with the fact that WBD no longer offers forward-looking guidance in earnings reports, the company outlook is better, in relative terms – and hoping for a further lift if one becomes two.

Lifted from Comcast’s playbook, the idea of the split – aside from whether it ever actually happens – provided a long-sought tonic for WBD stock, which had skidded below $8 a share earlier this year. The company is taking streaming international and is having a great 2025 box office run, with A Minecraft Movie, Sinners, Weapons, the Superman revival and the latest installments of Final Destination and The Conjuring turned around the studio’s fortunes and those of the just re-upped De Luca and Abdy. The studio also helped Apple’s F1 take the checkered flag in a distribution deal and launched gusty auteur gamble One Battle After Another, which has awards heat even with an iffy profit outlook.

Debt, which haunted the old WarnerMedia when it was owned by AT&T, continues to hamper investment in WBD.

A “restructuring in June took about $3 billion off their debt, but they also have a $17 billion bridge loan, which is syndicated across Wall Street banks, which had not yet been refinanced,” a well-placed finance chief told us of the math and risk. “That’s one of the critical reasons why they can’t spin off the company yet with the cable properties and studio. Two is, as part of their debt plan, they have to monetize 20% of one of the spin companies, which is studios and streaming, which they expect to have a high value. If they don’t get the value when they spend, they’ll still be over leveraged in the cable company. It is all fraught with risk.”