Paramount executives reiterated on a conference call that their merger with Warner Bros. Discovery (WBD) will not entail divesting any legacy cable networks. This assurance came from CEO David Ellison and COO Andy Gordon, who faced multiple inquiries from analysts regarding the future of cable assets following Ellison’s acquisition of Paramount in August.
“We believe in the assets we’re buying, and there are no plans to divest or spin off a package of cable assets at this time,” Gordon stated. He highlighted that the integration of Warner Bros.’ brands with Paramount presents substantial opportunities for both linear and digital expansion. He emphasized that many linear channels possess strong brands that can be revitalized in the digital landscape.
Gordon was unequivocal when asked if there were any assets deemed non-core that might be sold to alleviate financial pressures, stating, “No. Very simply, we have no divestitures planned at this time.”
This commitment stands in contrast to recent actions taken by other media giants. Comcast, for example, recently divested most NBCUniversal cable networks into a new standalone entity named Versant. In a separate move, WBD was previously discussing a similar strategy in its agreement with Netflix, aimed at separating programming assets into a different company, Discovery Global.
The failed agreement with Netflix, which focused on Warner Bros. studios and streaming assets, was terminated after Paramount presented a more lucrative offer to acquire the entirety of WBD.
Ellison highlighted the advantages of merging linear businesses, asserting that it creates a formidable footprint across both content and sports. He remarked on the operational efficiencies this consolidation would generate, ultimately benefitting job stability and free cash flow.
The executives conveyed their confidence that the combined portfolio would be better positioned for a digital future. “We can then meet people where they are,” Ellison explained, offering consumers options to access content via traditional linear channels or within the streaming ecosystem.
As a result of this merger, the newly formed entity will operate in over 200 countries and territories, boasting an extensive lineup of cable and free-to-air networks, including notable names like CBS, CNN, TBS, TNT, Food Network, MTV, Cartoon Network, and Discovery Channel. This merger is anticipated to create enhanced opportunities for both global distribution and local production.
