Paramount Global’s list of potential suitors shrank Tuesday after Warner Bros. Discovery said it is no longer pursuing merger talks with the struggling media giant, according to a report.
The CNN parent had been kicking the tires for several months before deciding to walk away from Shar Redstone’s debt-riddled company, CNBC reported, citing sources familiar with the matter.
Another potential buyer, Skydance Media, the film and TV studio run by CEO David Ellison, is still performing due diligence on a potential deal, according to two of the sources that spoke to CNBC.
Paramount — which owns CBS, the Paramount+ streaming channel and movie studio, among other assets — had its credit rating reduced to just above junk status last Friday by ratings agency S&P, which citied low operating cash flow generation due to the ongoing decline in cable television and competition in streaming.
That apparently also gave pause to Comcast — the owner of NBCUniversal, along with CNBC and the Peacock streaming service — indicated it isn’t interested in buying Paramount’s assets, one of the sources told outlet.
Comcast has been exploring a potential deal that could include merging the streaming services, a person familiar with the matter told CNBC.
Both sides have hired advisers and are exchanging financial information, the report added.
Byron Allen, the media mogul, submitted a $14 billion bid for Paramount, but Allen has been known to dip his toes into potential sales without completing the acquisition process.
Earlier this month, Warren Buffet’s Berkshire Hathaway sold a third of its stake in Paramount — which last week announced plans to lay off about 800 employees, or roughly 3% of its workforce.
Since Jan. 1, Paramount’s stock has plunged more than 20%. The company will announce its earnings on Wednesday.
Shares of Paramount, which is controlled by Redstone’s stake in National Amusements, were up slightly Tuesday.
Warner Bros. Discovery, whose media holdings include ratings-challenged cable news outfit CNN, HBO and the Turner family of cable channels such as TNT and TBS, has battled its own financial difficulties.
The company reported a bigger-than-expected quarterly loss on Friday as the media conglomerate battled a weak advertising market and the fallout of the twin Hollywood strikes on content generation.
Warner Bros Discovery’s studio business revenue sank 17% in the fourth quarter as it had little to follow the success of “Barbie”, which released in July and topped $1 billion in ticket sales worldwide.
The company is pinning its hopes on the March release of the second installment of sci-fi epic “Dune,” featuring Timothee Chalamet and Zendaya.
The release was delayed from November due to the Hollywood strikes.
Advertising revenue at its networks segment declined 12% to $1.95 billion, hurt by the ongoing decline in audiences for traditional television and a weaker economic outlook.
Overall fourth-quarter revenue of $10.28 billion missed analysts’ average estimate of $10.35 billion, per LSEG data.
Excluding items, the company lost 16 cents per share, larger than expectations for a loss of 7 cents.
Warner Bros Discovery earlier this month said it would form a joint venture with Walt Disney and Fox to launch a sports streaming service this autumn to capture younger viewers who are not tuned in to television.
Meanwhile, the streaming business extended its strong show.
The unit had 97.7 million global customers at the end of the fourth quarter, including 1.3 million subscribers from its acquisition of BluTV.
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This story originally appeared on NYPost
