Negative $6.8 billion. That's the rough combined net loss Paramount and Warner Bros. Discovery (WBD) recorded across 2024, two legacy media companies that have spent years burning cash in pursuit of a streaming future that keeps slipping out of reach. Now, with Netflix having withdrawn from the bidding war for WBD, Paramount Skydance has emerged as the expected new owner, according to reporting by the Associated Press. The deal still requires regulatory approval, but the shape of a Paramount-Skydance-Warner-Bros.-Discovery media conglomerate is coming into focus.
For Australian subscribers to Paramount+ or HBO Max, the implications are real: higher prices, potential service consolidation, and a smaller pool of competing platforms. Let's break this down.
A Tale of Two Money Pits
The financials here are sobering. Paramount's full-year 2024 net loss came in at $6.19 billion. WBD's was even worse, at $11.31 billion. Both companies clawed back some ground in 2025, with WBD posting a slim $727 million annual profit while Paramount remained in the red at minus $621 million. Neither set of numbers inspires confidence that either company could thrive independently.
Entertainment analyst Laura Martin at Needham & Company has argued that Paramount "must have" WBD to survive. The logic is straightforward: Paramount is heavily dependent on linear television networks whose advertising revenue is in structural decline. Absorbing WBD's assets, including its content libraries, theatrical pipeline, and streaming subscribers, is the bet Paramount is making on its own future.
Streaming: Bigger, But Not Necessarily Better
Here's the thing: Paramount+ is not profitable. In the fourth quarter of 2025, Paramount's overall streaming division posted an adjusted operating loss of $158 million. Subscriber numbers grew modestly, from 77.9 million in Q3 to 78.9 million in Q4, with revenue up 17 per cent year on year. WBD's streaming arm, anchored by HBO Max, fared better, generating $393 million in adjusted earnings for the full year 2025, though that was down from $409 million the year before. WBD ended 2025 with 131.6 million streaming subscribers.
Compare both figures to Netflix, which reported net income of $11 billion for 2025 across 301.6 million subscribers, and the scale of the challenge becomes obvious.
The most likely outcome for subscribers, according to Bloomberg, is that HBO Max would be folded into the Paramount+ platform. Paramount CEO David Ellison reportedly believes combining the two services would make each more compelling and allow more viewers to discover content. Vikrant Mathur, co-founder of streaming technology provider Future Today, offered a more cautious near-term view, suggesting the two brands might initially remain separate but be offered together in discounted bundles before any full integration.
A merged Paramount+ carrying both HBO and Discovery content would become the largest streaming consolidation in history. Mathur put it plainly: the industry is trending toward "fewer, larger super-platforms offering broader catalogues at higher price points." For consumers already fatigued by subscription creep, that trajectory is worth watching closely.
Cable: Profitable, But For How Long?
One underreported aspect of this deal is Paramount's appetite for cable. Both companies' cable divisions are declining in audience terms, yet both remain cash-generative. Paramount's TV and media segment posted $1.1 billion in adjusted operating earnings in Q4 2025. WBD's cable business recorded $1.41 billion in adjusted earnings that same quarter. Adding WBD's cable stable, including HGTV, Cartoon Network, TLC, and CNN, to Paramount's existing lineup of CBS, Nickelodeon, and Comedy Central, would create one of the largest linear television portfolios in the world.
The question of what happens to CNN is particularly pointed. Under Ellison's Paramount, CBS News has already undergone editorial changes, with Bari Weiss installed as editor-in-chief. Comedian and CBS host Stephen Colbert claimed this month that CBS prevented him from interviewing Texas Democratic Senate candidate James Talarico, a claim CBS denied. Whether or not that specific allegation holds up, The Hollywood Reporter has reported that CNN's future under Paramount ownership raises legitimate concerns about editorial independence, staffing costs, and coverage direction.
The Regulatory Gauntlet
Federal approval in the United States is considered likely, but that is far from the whole picture. State-level legal challenges are already emerging, and European regulators will apply their own scrutiny to a deal of this size. The cinema exhibition industry has also entered the fray, with theatre chains lobbying against the merger over concerns about how a combined studio giant might treat theatrical release windows.
There are genuine arguments on both sides. Supporters of consolidation point to the brutal economics of competing with Netflix and Amazon at scale; smaller studios and services simply cannot match the content spend. Critics, including consumer advocates and competition regulators, flag the risk of reduced choice, higher prices, and concentrated editorial power over major news brands. Both concerns have merit.
The honest assessment is that merging two struggling businesses rarely produces a healthy one without significant structural reform and a credible plan for debt reduction. Whether Ellison has that plan remains to be seen. What is certain is that the streaming wars are entering a new phase, and Australian viewers, investors, and anyone who cares about media plurality will be watching how this unfolds.