Paramount Plans to Merge Streaming Service with HBO Max After WBD Deal Closes

Two major streaming services will become one as part of Paramount’s planned $110 billion takeover of TNT Sports parent company Warner Bros. Discovery—a move set to have large-scale impacts across sports media. 

In an investor call early Monday to detail the historic agreement, Paramount chair and CEO David Ellison said the company intends to merge its own Paramount+ with HBO Max when the overall acquisition closes, creating a combined streaming service with massive scale.

“We do plan to put the two services together, which gives a little over 200 million direct-to-consumer subscribers,” Ellison said. “We think that really positions us to compete with the leaders in the space.”

Netflix has more than 325 million subscribers, by far the largest total of any major platform doing business in the U.S. The combined figure for Paramount+ and HBO Max, however, is similar to the aggregate total for Disney+ and sister offering Hulu, and far more than the 44 million for Peacock. 

While Eillson intends for the HBO brand to still “operate with independence,” the combined streaming service will be a key locale for a massive combined sports rights portfolio with few rivals. No further branding or pricing plans have been disclosed for the combined streaming service, but operating as separate entities, Paramount+ and HBO Max have served as a DTC home for all of their major sports programming including the NFL, MLB, NHL, March Madness, college sports, and the UFC, among many others.

Before Paramount overtook Netflix in the race for control of WBD, TNT Sports had been developing its own sports-centric streaming service, separate from HBO Max, with that plan now set to be scrapped. 

The combination of Paramount and WBD, meanwhile, will allow for migration of some sports content across its networks, including UFC events showing up on HBO platforms.

Paramount, the parent company of CBS Sports, also has no plans to sell off incoming WBD assets.

“We believe in the assets that we’re buying and there are no plans to divest or spin off a package of cable assets at this time, and in particular, we think the brands that Warner Bros. is bringing to Paramount gives us a lot of opportunity,” Paramount chief strategy officer Andy Gordon said.

Regulatory Matters

The pact still faces what will likely be a rocky path toward regulatory approval. Despite widespread political outcry over the deal in recent days, particularly from Democrats on Capitol Hill, Ellison and other Paramount executives said they haven’t heard any signal of potential problems with regulators.

There are “no statutory impediments” to closing the deal, Ellison said. 

Paramount intends to close the pact by Sept. 30, and if it doesn’t do so, the company will be subject to an additional ticking fee of about $650 million per quarter. 

No Regrets

Netflix co-CEO Ted Sarandos, meanwhile, acknowledged the “unusual” circumstances that led to the company’s withdrawal from its pursuit of WBD, but insisted it did the fiscally prudent thing.

“We had a very tight range that we’d be willing to pay and made that offer back when we closed this deal,” Sarandos said in an interview with Bloomberg. “We hadn’t moved much from that, except from moving to cash, which served to move the deal faster. I’m happy where we got in and happy where we got out. We knew right away, when we got the notice on Thursday that they had a superior offer and the details of that deal. We knew exactly what we were going to do.”

Netflix has already received the $2.8 billion termination fee that WBD owed it, with Paramount agreeing to pay that as part of its bid.