Ellison will merge Paramount+ and HBO Max, won’t spin off any cable brands
The Pitt has been one of HBO Max’s biggest hits recently
Paramount Skydance boss David Ellison on Monday confirmed that Paramount+ will be merged with HBO Max following his company’s US$110bn acquisition of Warner Bros Discovery (WBD).
The combined SVoD entity will put Paramount “in the position to be able to compete with the most scaled players” in the streaming business, said Ellison, citing Netflix as the market leader with 325 million subscribers.
As it stands, HBO Max is on course to hit 140 million global subscribers by the end of this quarter, with Paramount+ at around 80 million. Key series on HBO Max globally include The Pitt, A Knight of the Seven Kingdoms, The White Lotus, House of the Dragon, Industry and The Gilded Age, while Paramount+’s key viewership drivers include Tulsa King, MobLand and Landman and Taylor Sheridan’s Yellowstone universe. No timeline has been set for the combination of the streamers.
In terms of whether HBO’s commissioning team will remain in place as its parent company gets acquired, Ellison said the hope is for the prestige TV brand to continue operating “with independence” and praised HBO and HBO Max boss Casey Bloys for the “remarkable job” he and his team have done.
“Our viewpoint is that HBO should stay HBO,” said Ellison. “They built a phenomenal brand. They are a leader in the space, and we just want them to continue doing more of it,” he said.
He added that the merger of Paramount+ and HBO Max will enhance the impact and reach of HBO originals. “By bringing the platforms together, all of our content will be able to reach even a broader audience than we can do standalone,” he added.
The merger brings together two massive cable network groups, comprising brands such as Paramount’s MTV, Nickelodeon, BET and Comedy Central and WBD’s Discovery Channel, HGTV and Food Network. These cable brands account for the vast majority of profitability for both companies individually, and will do so when WBD and Paramount are brought together.
Ellison said there is no desire to spin off cable networks once the merger is complete. Previously, WBD had planned to split off its linear networks portfolio into a separate publicly traded company (Discovery Global), though those plans have now been scrapped.
“There’s no plans to divest or spin off a package of cable assets at this time,” said Ellison, adding that the belief is that bringing Paramount’s cable brands together with WBD’s will create the “operational efficiencies” needed to “keep those businesses healthier for significantly longer than they would be on a standalone basis.”
Another major talking point of the merger is the enormous US$79bn debt pile it will carry. The company has a stated target of US$6bn in cost savings, though Ellison claimed that the majority of those will come from “non-labour charges.”
Paramount and WBD confirmed their definitive agreement on Friday, asserting they expect the deal to close in the third quarter. Ellison’s media company clinched the deal after Netflix, which previously had a definitive agreement to buy WBD’s studio and streaming businesses, declined to match Paramount’s $31-per-share offer for the entire company.
