Paramount Global shares rose 5.7% on July 2nd amidst merger talks for its Paramount+ streaming service, potentially with Warner Bros. Discovery, which saw a 1.4% increase. Negotiations include combining Paramount+ with Max.

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A merged streaming service would mitigate churn by giving customers more diverse programming and fewer reasons to cancel each month, and it could take Paramount+ losses off Paramount Global’s balance sheet by giving it new ownership.

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While a structure for a hypothetical joint venture with Warner Bros. Discovery hasn’t been discussed in detail, ownership likely wouldn’t be a 50-50 split given the existing natures of the streaming assets and their finances, according to people familiar with the discussions.

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Warner Bros. Discovery’s direct-to-consumer business made $103 million in annual adjusted EBITDA in 2023 after losing $2.1 billion the year before. 

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Paramount Global reported a loss of $1.67 billion in direct-to-consumer operating income before depreciation and amortization in 2023, narrower than its $1.8 billion loss a year prior.

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Max has about 100 million global subscribers, with 52.7 million based in the U.S. Paramount+ ended its first quarter with 71 million subscribers.

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