Paramount executives stressed today that once merged with Warner Bros. Discovery, the company combined has no plans to unload any legacy cable networks.
CEO David Ellison and COO and Chief Strategy Officer Andy Gordon were asked about that several times by analysts on a call. They have spoken frequently already about the logic of retaining cable after Ellison’s Skydance acquired Paramount in August.
“We believe in the assets we’re buying, and there’s no plans to divest or spin off a package of cable assets at this time. And, in particular, we actually think, given the brands that Warner Bros. is bringing to Paramount, there are a lot of opportunities to think about all the different aspects of what they can do, both on the linear side and the digital side … So that’s our plan right now,” said Gordon.
Expressed another way: “We believe that many of our linear channels have incredible brand that can be reinvigorated for a streaming and digital world.”
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Pressed on whether there were any assets at all that feel non-core and could be divested to reduce leverage, he said, “No. Very simply, we have no divestitures planned at this time.”
Comcast recently spun out most NBCUniversal cable networks into a new standalone public company called Versant. WBD was planning to do the same in its previous agreement with Netflix by separating its programming assets into another company called Discovery Global.
The deal Netflix inked with WBD last December was just for the Warner Bros. studios and streaming assets. Warner terminated that deal last week after receiving a superior offer from Paramount, which is buying WBD in its entirety.
Ellison said that “putting the combined linear businesses together gives us an incredible footprint across both content and sports. It also gives us the operational efficiencies to keep those businesses healthier for significantly longer than they would be on a standalone basis, which will be good for jobs, be good for free cash flow.
“And there are incredible brands across the combined linear portfolio that we really do believe in being able to transition to a digital future. And we can then meet people where they are. If you want to have the choice to access it on the linear platform, you can do that if you want to access those brands in the streaming ecosystem, you can. We believe that the combination of that will ultimately keep the portfolio healthier and prolong the life for longer than what is standalone businesses.”
The combined company, they said, will have a presence in over 200 countries and territories worldwide with a portfolio of cable and free-to-air networks including CBS, CNN, TBS, TNT, Food Network, HDTV, MTV, Cartoon Network, Adult Swim and Discovery Channel. It plans to provide more opportunities for global distribution and local production.