Paramount Skydance is reportedly preparing a bid to acquire Warner Bros Discovery.
Variety, an entertainment industry trade magazine in the United States, first reported the looming proposal on Tuesday, quoting sources familiar with the talks.
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The publication said the company formed an investment consortium with the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi to submit a $71bn bid for Warner Bros Discovery.
The report said Paramount Skydance would contribute about $50bn towards the proposed acquisition with the remainder coming from the wealth funds.
Paramount Skydance has described the involvement of the sovereign wealth funds as “categorically inaccurate”.
Paramount Skydance is now led by David Ellison, the son of Larry Ellison, cofounder of Oracle and a close ally of US President Donald Trump. Warner Bros Discovery previously rejected a bid from the Ellison family, which holds all board voting power at Paramount Skydance.
Neither Paramount nor Warner Bros Discovery responded to Al Jazeera’s request for comment.
Under the proposed structure, the wealth funds would take small minority stakes and each would receive “an IP, a movie premiere, a movie shoot”, the report said.
Warner Bros Discovery – home to the DC film universe and television studios, HBO, CNN, TNT and Warner Bros Games – is on the verge of breaking up, crippled by declines in its television business.
The company said in October that it has been considering a range of options, including a planned separation, a deal for the entire company or separate transactions for its Warner Bros or Discovery Global businesses.
Nonbinding, first-round bids are due on Thursday.
Paramount is the only company currently considering a full buyout according to the US news website Axios. Warner Bros Discovery also wants to have a deal by the end of the year, according to Axios’s reporting.
Political pressures
The looming deal is shaped in part by how the Trump administration views coverage by the news outlets owned by Warner Bros Discovery.
Netflix and Comcast are also reportedly exploring bids, but any Comcast-led effort would need regulatory approval.
Trump has also repeatedly attacked Comcast over its TV news coverage, saying the company “should be forced to pay vast sums of money for the damage they’ve done to our country”.
Comcast owns NBC News and its subsidiary Versant Media, the parent company of MS-Now – formerly MSNBC – and CNBC.
CBS, owned by Paramount Skydance, has taken a more conciliatory posture towards the administration, including hiring a Trump nominee as an ombudsman to investigate bias allegations after settling a Trump lawsuit claiming its flagship programme 60 Minutes deceptively edited an interview with 2024 Democratic presidential nominee Kamala Harris, who lost to Trump.
Paramount Skydance also recently tapped Bari Weiss, a right-leaning opinion journalist with no television background, to lead the CBS broadcast news division.
Any of the deals that are being discussed raise antitrust concerns. But if Paramount Skydance, which already owns CBS, now purchases CNN as part of Warner Bros Discovery, “that would create an added civic risk”, Rodney Benson, professor of media, culture and communication at New York University, told Al Jazeera.
“Such a deal would put two leading news outlets under the roof of the same large, multi-industry conglomerate with avowed close relations to the party in power – and that could lead to more conflicts of interest, less independent watchdog reporting and a narrowing of diverse voices and viewpoints in the public sphere,” Benson said.
Warner Bros Discovery remains the parent company of CNN.
On Wall Street, Paramount Skydance shares were up 1.7 percent in midday trading. Warner Bros Discovery was also up 2.8 percent from the market open. Comcast gained 0.5 percent, and Netflix climbed 3.5 percent.