Warner Bros. Discovery and Paramount Global are reportedly in early talks about a potential merger. If the deal pushes through, the collaboration could create a news and entertainment giant that would likely spark further industry consolidation.

According to BBC, the partnership would see the owner of HBO channels and CNN team up with the studio behind the CBS News and Mission Impossible films.

As first reported by Axios, Warner chief executive David Zaslav and Paramount Global CEO Bob Bakish discussed a possible merger over lunch in New York earlier this week. Multiple sources told Axios that the meeting took place at Paramount's headquarters in Times Square and lasted several hours.

(Photo : Charley Gallay/Getty Images for TCM)
LOS ANGELES, CALIFORNIA - APRIL 14: The Warner Bros. logo is displayed before the screening of "Ocean's Eleven" during the 2023 TCM Classic Film Festival on April 14, 2023 in Los Angeles, California.

Warner Bros. Discovery Merger Talks With Paramount Global 

If the talks materialize into a deal, it would create a powerhouse with a combined market value of $38 billion.

The media landscape has undergone significant transformations due to the rise of streaming services, necessitating traditional media companies to adapt swiftly to the changing dynamics dominated by streaming giants such as Netflix, Amazon Video, and Apple TV. 

Warner and Paramount are both facing losses in their video streaming services, as reflected in stock prices trading below their historical highs from the early days of streaming. 

As a result, both companies have had to implement cost-cutting measures. According to the sources, discussions between Zaslav and Bakish are in the early stages, and the outcome remains uncertain. 

The talks reportedly include merging their respective streaming services, Paramount Plus and Max (formerly HBO Max), as a strategic move to enhance competitiveness against formidable rivals like Netflix and Disney Plus.

READ ALSO: Apple and Paramount Streaming Bundle Report Spurs Rise in Media Stocks

Paramount Plus and Warner Bros. Discovery vs. Streaming Giants

The merger discussions come in the wake of ongoing industry consolidation driven by the formidable presence of streaming giants. Netflix, in particular, continues to assert its dominance, adding millions of paid subscriptions worldwide. 

While boasting substantial subscriber bases, Paramount Plus and Warner Bros. Discovery face the challenge of catching up with the sheer scale of Netflix's global reach.

The talks between Warner Bros Discovery and Paramount Global exemplify the industry's response to the changing media landscape, characterized by a shift from traditional broadcasting to streaming services. 

READ MORE: Nelson Peltz vs. Disney: Billionaire Activist Investor Seeks Multiple Board Seats as He Launches New Proxy Battle