ALEX BRUMMER: Winning move still obscure on global media chessboard

Settling the future of Warner Bros Discovery has been One Battle After Another, to quote the title of its recent Bafta-winning movie starring Leonardo DiCaprio.

The $111billion (£82billion) victory of Paramount Skydance, after a titanic struggle with Netflix, should be good for the Hollywood studio system.

But it is likely to prove pyrrhic for the super-wealthy Ellison family, which is backing the bid. 

There is enormous political and British creative interest in the transaction. The deal would see CBS News and 24-hour news channel CNN under the same ownership, raising questions in the US about media plurality.

Since Paramount became the owner of CBS, it has tilted to the centre-Right following the appointment of Bari Weiss, the founder of US digital news outlet Free Press, as its editor-in-chief.

CNN, headed by former BBC and New York Times boss Mark Thompson, has long been a thorn in the side of Donald Trump. Federal regulators, Congress, and a bullying White House will all want a say in the news shake-out.

Ofcom and the Competition and Markets Authority in Britain may also want to take a look. 

Warner Bros plays a big role in Britain’s creative sector through its Leavesden Studios, home to Harry Potter, and production firm Shed Media and it also has a joint sports venture with BT.

Paramount’s UK assets include Channel 5 and the Nickelodeon family of paid TV channels. 

Paramount+ also has a streaming deal with Sky. So there is plenty to untangle. The biggest winners from the auction for Warner Bros will be its shareholders and David Zaslav.

The Warner chief executive kept Paramount at arm’s length for months, signed a deal with Netflix, and waited for Paramount to come in with a series of higher offers. 

It also extracted a whopping $7billion (£5.2billion) break fee, should regulators render the deal impossible. In financial terms the transaction is risky for Paramount.

The deal only became possible when Larry Ellison of Oracle backed his son David Ellison’s Paramount Skydance offer with $47.5billion of equity and a pile of debt. Netflix argued the deal was ‘no longer financially attractive’.

That speaks volumes. Big media mergers have a habit of being costly. AOL’s merger with Time Warner in 1999-2000 was a value destroying disaster. Comcast ended paying over the odds to buy Sky, leading to a debt hangover and write-offs.

Streaming is in danger of making traditional linear broadcasting and cable obsolescent. 

In Britain, drawn-out merger talks between ITV and Sky are an attempt to create a bigger, UK-based broadcasting powerhouse. 

Pieces on the global media chessboard are in constant motion. But the winning move is still obscure.

Flying high

There should be no surprise that British Airways owner IAG, with its domination of the most lucrative transatlantic routes, is back in the money, despite describing the pre-pandemic volumes of business travel as ‘ancient history’. Pre-tax profit soared 26 per cent to €4.5billion (£3.95billion) in 2025.

As a regular traveller to Washington DC, I recently asked travel agent Egencia for its ‘preferred rate’ to the American capital in April going out World Traveller Plus and returning business. It came back with an eye-popping quote of £8,172.

Reverting to Flight Centre, I was offered equivalent United Airlines tickets at £4,332. No mystery then as to why BA is still a sceptic about a costly third runway at Heathrow. It would weaken a tight grip on gates and the carrier’s huge pricing power.