Paramount “Fully Expects” WBD Merger To Close As It Reports Q2 Streaming Gains, Linear Challenges
Almost one year exactly from Skydance’s acquisition of Paramount, the merged company reported mixed quarterly numbers with strong streaming, tough theatrical comps and an ongoing drop in linear television. The numbers hit just as a judge announced a March trial date to hear the AG’s antitrust case against the Par-WBD merger.
“Q2 was our best quarter for retention in Paramount+’s history, powered by Dutton Ranch, UFC, and the FIFA World Cup non-exclusively across six countries in Latin America, gaining ~2 million new Paramount+ subscribers in the quarter to reach 81.6 million worldwide,” the company said.
BET+ was integrated into Paramount+ in Q2.
Total revenue was in line with Wall Street forecasts at about $6.9 billion.
The company raised its full-year 2026 outlook to a range of $3.8-$3.9 billion in adjusted ebitda, and said it expects over $2.7 billion of cost savings by the end of 2026, above its previous projection. It continues to expect $3 billion-plus in efficiencies from the Skydance-Paramount combination.
In TV Media, where profitability grew year-over-year while revenue declined, “reflecting steps to rightsize the cost structure relative to overall declines in linear revenues.”
Investors will be studying the numbers closely as the larger deal with Warner Bros. Discovery is on hold pending a trial. The “merger pause shifts Wall Street focus to standalone execution,” wrote one analyst in a recent note. CEO David Ellison et al will take questions on a call at 5 pm ET.
“We continue to prepare for our proposed combination with Warner Bros. Discovery, while staying focused on executing our standalone strategy and delivering strong results,” Par promised.
Paramount and WBD announced their deal in February, a $31 a share all-cash transaction valued at $110 billion. Ellison had said repeatedly he anticipated a close in the third quarter – so now. The merger has key regulatory approvals but is now halted after State Attorneys General led by California’s Rob Bonta filed an antitrust suit to block it. A judge issued a temporary restraining order and today set a March trial. Paramount has requested a November date. The AGs asked for February. Principals and proxies for both sides have been flooding the zone with commentary.
“As it relates to the planned acquisition of Warner Bros. Discovery, we fully expect the transaction to close and remain focused on preparing for a successful combination once it is complete,” wrote Ellison in a letter to shareholders.
“Over the past several months, our leadership team and legal partners have worked closely with antitrust and competition authorities around the world. As a result, regulatory bodies and governments representing 65 jurisdictions — including the European Commission, Australia, Brazil, China, the U.S., Germany, France, Spain, Canada, South Africa, Saudi Arabia, and South Korea — have either cleared the transaction or elected not to challenge it on competition and/or foreign direct investment grounds,” he said.
“As these clearances demonstrate, the transaction is fully consistent with antitrust laws. The claims in pending antitrust litigation do not reflect the realities of today’s highly competitive entertainment marketplace. Even combined, Paramount and Warner Bros. Discovery would account for just 13.4% of total U.S. television and streaming viewing time, 18% of the domestic box office over the past 12 months, and 22% on average over the last six years. Those figures reflect a company competing in an intensely competitive marketplace against tech giants such as Netflix, Amazon, Apple, and others — not one with the market power to dictate outcomes for audiences, creators, or distributors. We remain confident the transaction will be completed, creating a stronger, more competitive media company.”
More to come
