A WBD-Paramount Combo: Linear TV, Theatrical Dominance - Is That Enough?

by Wayne Friedman , December 22, 2023

Leaving aside their high-profile streaming platforms, a possible Warner Bros. Discovery-Paramount Global merger would initially result in dominant leading positions in two legacy entertainment measures: Linear TV viewing time, and theatrical box-office revenue.

MoffettNathanson Research says the initial combination of the companies would result in a 35% to 40% share of linear TV time depending on the season, for people two years and older, live program/same day viewing minutes.

Media analyst Robert Fishman writes that this is “a greater share than any single entity has controlled since the pre-cable network era and likely to be among the biggest sources of potential regulatory pushback.”

NBCUniversal is estimated to currently have around 16% of linear TV viewing time, while Walt Disney is at 12%-14%; and Fox Corp is at 12%-14%.

Still, Fishman -- and other analysts -- say it is likely that a number of cable TV networks, especially on Paramount side of the ledger, would need to be sold off to pay for the potential deal, lowering ongoing and future debt concerns.

In addition, the combined theatrical revenues would total an estimated $2.1 billion in domestic box-office revenue -- driven by $1.2 billion 2023 season-to-date revenues for Warner Bros. and $850 million for Paramount. That means a leading 24% share of the marketplace.

He adds that big legacy media speculation will continue for much of next year. Fishman thinks that Warner Bros. Discovery should consider other deals.

“If WBD were really looking to make an acquisition -- especially for a broadcast network, NFL and others must have sports rights, a leading FAST service in Tubi, 18.6% FanDuel option and even a studio lot -- we think Fox Corp. would be a much better fit.”

He adds: “Comcast may be the one strategic buyer with the capital structure and assets required to benefit either WBD or Paramount in a long-term viable way.”

Still, he equates this deal to catching “a falling knife," adding: “What is the rush with the likelihood of waiting for an even cheaper price if a real advertising recession transpires?”

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2 comments about "A WBD-Paramount Combo: Linear TV, Theatrical Dominance - Is That Enough?".

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Ed Papazian from Media Dynamics Inc, December 27, 2023 at 2:14 a.m.
Interesting stats, Wayne. According to this analyst the four programming entities would control about 80% of all linear TV viewing. I assume that includes their O&O TV stations as well as their cable channels and, of course, their broadcast networks. The 80% figure seems a bit on the high side to me as it doesn't leave much for all of the other cable channels nor local station programming ---like news or local sports coverage---and sydnicated fare. I wonder if they included any breakdowns for these program sources.
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Ed Papazian from Media Dynamics Inc, December 27, 2023 at 2:51 a.m.

As a clarification on my previous comment, the table indicates that local station and syndicated fare was not included, which is why I posed the questions. So assuming that the table represents what the analyst meant, these four programming entities would not have an 80% share of all"linear TV" viewing, but only that portion of it that is attributed to the broadcast networks and national cable channels. Taking these into account, the share probably drops to 60% or thereabouts. Still big---but not total dominance.