Paramax Plus is off: Max and Paramount Plus’ merger isn’t happening

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Back in December we reported that Max and Paramount Plus were in serious discussions about joining forces; the two entertainment firms were considering a “mega merger” that would enable them to better compete with Disney Plus (and its meld with Hulu) and Netflix on both big and small screens.

In the US, that could’ve meant combining the Max and Paramount Plus services into one super-streamer.

It’s an interesting prospect, but it appears that it now won’t happen: according to CNBC, the talks have been halted and Warner Bros. Discovery is no longer pursuing a merger. CNBC says it’s “pencils down” after “several months kicking the tires” amid share price drops for both firms: Warner Bros. Discovery shares fell 10% last week after it missed revenue targets and is approaching a 52-week low, while Paramount Global is also approaching a 51-week low in anticipation of today’s earnings report.

So where does that leave Paramount?

Paramount could still be sold

The report says that Paramount still has some potential suitors. Media mogul Byron Allen has already offered $14 billion for the company, although as CNBC points out he has a history of bidding and then not buying; and while Comcast isn’t interested in buying the company outright, it’s apparently still working with bankers to explore a potential commercial partnership with Paramount Global. That might mean bundling or combining Comcast’s Peacock service Paramount Plus. Another potential partner or buyer, Skydance Media, is apparently still interested too, although details of its discussions are currently private.

Paramount is one of the most historic entertainment brands in the US, home to Hollywood studios, CBS and many other famous brands. But as a legacy business that’s still heavily dependent on network TV, cable and movie theaters, it’s been struggling in the streaming era and was hit particularly hard by the COVID pandemic. According to the LA Times, it’s also suffered from a legacy of poor decisions and underinvestment in the 2010s and needs a significant investment in order to return it to its former glories.

The LA Times for one had already predicted that a Warner/Paramount merger wasn’t going to happen: speaking to one analyst who’d rather not be named, it reported their comments that there wasn’t “a clear path to a deal for Warner Bros. Discovery or Allen Media Group.” According to the analyst the most likely deal is between Skydance and Paramount, particularly as “the process of ironing out terms is reportedly underway.”

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