Paramount’s US$111bn WBD deal: Seismic Shift for Australian TV Media

Network 10, acquired by CBS (and subsequently Paramount) in 2017, has struggled in the face of declining linear advertising revenues and the valuation of its broadcast licenses. In February 2025, Paramount Global slashed the financial valuation of Network 10’s television licenses by 40%, down to only A$20.7 million. Despite this, the network remains a vital component of Paramount’s "Total Video" strategy in Australia.

The acquisition of Warner Bros. Discovery brings a suite of powerful linear brands into the fold, including CNN International, Discovery, TLC, and the Food Network. For Network 10, this means greater access to a global content pipeline and the ability to leverage "Paramount Connect 2.0," an advanced advertising technology stack designed to simplify unified video buying across both broadcast and streaming platforms.

Technological Innovation and Advertising Strategy

Paramount Australia’s 2026 roadmap emphasised "frictionless" advertising and attention-based measurement. By utilising Automated Content Recognition (ACR) data from LG smart TVs and AI-driven contextual ad placements, the network aims to identify specific emotions, products, or themes in real-time within its programming to deliver highly relevant ads.

• Paramount Connect Streaming: Offers unified proposals and single-transaction execution across Network 10 and Paramount+.

• Contextual Ads: Powered by Kerv.ai, this technology allows advertisers to "Own the Moment" by placing ads around specific scenes in popular reality shows like Big Brother or MasterChef.

• IPTV Integration: Paramount has partnered with LG Electronics to launch an Australia-first IPTV linear feed integration through LG’s FAST channel offering, LG Channels, providing seamless access to live broadcast content directly through smart TV interfaces, bypassing traditional aerial and app connections.

This technology-first approach suggests that Paramount views its Australian linear assets not as standalone businesses, but as high-reach "vessels" for a sophisticated digital advertising ecosystem. The integration of Warner Bros. Discovery’s library will significantly expand the volume of inventory available for these AI-driven ad formats.

Live sport is the primary engine of subscriber acquisition and retention in the Australian market, and the Paramount-WBD merger creates a new powerhouse in this arena.

Paramount Australia has already secured a comprehensive portfolio of football rights, including the Socceroos, the Matildas, and the domestic A-Leagues through 2028. The addition of WBD’s TNT Sports and Eurosport capabilities provides the conglomerate with a global platform to bid for premium Australian rights, such as the AFL or NRL, when they next become available.

The merger brings together CBS Sports and TNT Sports under one roof, creating a massive tranche of data and bargaining power. Sports rights costs are escalating rapidly - with the AFL deal reaching A$4.5 billion for a 7-year deal and the NFL in the US hitting US$110 billion - so Paramount’s ability to amortise these costs across a larger global subscriber base will be a competitive advantage. Furthermore, the deal allows for the cross-promotion of sports content; for instance, using high-prestige HBO programming to draw viewers toward A-League matches on the same platform.

Australia’s screen production sector is currently navigating a pivotal transition with the introduction of the "Streaming for Australia" legislation, which mandates local content investment for major SVOD services. Starting in January 2026, streamers with more than one million subscribers - a category that includes both Paramount+ and the incoming Max - must invest 10% of their Australian program expenditure (or 7.5% of their revenue) into original Australian drama, children’s content, and documentaries.

The Paramount-WBD merger places a significant production powerhouse under the conglomerate's control: Warner Bros. International Television Production Australia (WBITPA). This entity is already a primary supplier of content for Australian networks, producing high-profile titles such as The Twelve, Love Me, and Celebrity Apprentice.

• Vertical Integration: By owning WBITPA and the distribution platforms (Network 10 and Paramount+), the combined entity can meet its legislative quotas by commissioning content from its own production house, a form of vertical integration that maximises internal efficiencies.

• Global Export: Shows like NCIS: Sydney, an international co-production between Paramount and local creators, demonstrate the strategy of using Australian talent and locations to produce content with global appeal.

• Employment and Scale: While industry unions like the Writers Guild of America have expressed concerns that such mergers lead to job losses and reduced diversity of content, Paramount’s 2026 slate for Australia remains robust, featuring new dramas like Dalliance and Two Years Later alongside returning favourites.

The long-term risk for the Australian sector is that the consolidation might lead to a "ceiling" rather than a "floor" for local investment. If the conglomerate prioritises its global franchises (e.g., more Yellowstone spin-offs or Harry Potter series) to satisfy quotas, the volume of truly original, independent Australian stories could contract.

The Australian Competition and Consumer Commission (ACCC), led by Chair Gina Cass-Gottlieb, has recently gained expanded powers under a new mandatory merger control regime that came into full effect on January 1, 2026. Under these new laws, any transaction meeting specific financial thresholds - which the US$111 billion Paramount-WBD deal far exceeds - must be formally notified to the ACCC and receive clearance before proceeding.

The ACCC’s review will likely focus on several core areas of competition concern:

• Media Diversity: The ownership of Network 10 alongside CNN International and the broader WBD library significantly concentrates media power in the hands of the Ellison family.

• Advertising Monopolisation: The regulator will investigate whether Paramount’s "Connect 2.0" unified ad-tech stack creates an unfair barrier for other domestic broadcasters trying to compete for digital ad dollars.

• Content Foreclosure: There is a concern that the combined entity will refuse to license high-value content (e.g., Warner Bros. films or HBO series) to competitors like Stan or Seven West Media, thereby substantially lessening competition in the SVOD and FTA markets.

While Paramount noted that it has already cleared certain US antitrust hurdles, the ACCC’s "public interest" and "competition" tests are notoriously rigorous, especially in a market as concentrated as Australia’s. The regulator has signalled that it will prioritise "cost of living" issues, ensuring that such mergers do not lead to higher subscription prices for consumers already struggling with inflationary pressures.

The political angle of this takeover cannot be overlooked, particularly given the ties between Larry Ellison and former US President Donald Trump. Larry Ellison is a major donor to Trump, and the acquisition of CNN - a network frequently criticised by the former president - has sparked intense speculation about future editorial shifts.

In Australia, Network 10’s editorial independence is a matter of significant public interest. Observers have noted that news operations at CBS (another Paramount asset) have faced increased scrutiny under the Ellison regime, with reports of critical coverage being shelved or heavily edited. The consolidation of 10 News First and CNN under this ownership structure could prompt a re-evaluation of media ownership laws in Australia, as lawmakers seek to ensure that international political interests do not compromise local journalistic standards.

While the US$111 billion valuation reflects the high price of victory, the combined entity faces a daunting financial road. Warner Bros. Discovery entered the deal with $33 billion in debt, and despite CEO David Zaslav’s aggressive deleveraging strategies, the company’s stock lost over 50% of its value by early 2025. The "Zaslav Doctrine" of cost-cutting - which included controversial tax write-offs of finished films and the removal of content from streaming platforms - was a necessary but painful phase of stabilisation.

Under Paramount’s ownership, David Ellison has explicitly warned of "significant job cuts" following the merger, as the company seeks to find billions in synergies. In Australia, this could lead to:

• Back-Office Consolidation: Merging the corporate functions of Network 10, Paramount Australia, and the local Warner Bros. production units.

• Theatrical Distribution Shifts: A move away from wide theatrical releases for mid-budget films in favour of direct-to-streaming debuts on the combined P+/Max platform to maximise margin.

• Rationalisation of Linear Assets: Further devaluations or even the shuttering of underperforming linear channels to focus resources on the "super-platform".

Despite these risks, the deal has been met with a measure of optimism from the theatrical industry, which viewed the previous Netflix bid with alarm, fearing that Netflix’s streaming-first model would lead to the closure of cinemas. Paramount’s commitment to "maintaining current operations," including theatrical releases, offers a reprieve for Australian cinema operators who rely on a steady supply of Warner Bros. blockbusters.