Warner Bros. Discovery (WBD) CEO David Zaslav has met with Paramount Global (PARA) CEO Bob Bakish about a potential merger, according to a report from Axios. The report says that in addition to Bakish, Zaslav also met with Shari Redstone, who heads Paramount's parent company. Yahoo Finance Live breaks down the report.

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Video Transcript

DIANE KING HALL: Warner Brothers Discovery CEO David Zaslav reportedly meeting with Paramount Global CEO Bob Bakish to discuss a possible merger. This reportedly actually happening-- the meeting reportedly happening yesterday, according to Axios. I've gone out to a source to see if we can confirm that information.

We know that we've been discussing the potential for industry consolidation. Earlier, you had a note out from Wells Fargo on this, expecting that deal activity to occur. Axios saying, apparently, Zaslav also spoke to Shari Redstone. We know she owns Paramount's parent company. That would be-- but it remains to be seen what happened with National Amusements.

The question remains about, this is certainly not a merger of equals when you look at the market cap of Warner Brothers. That's over $28 billion. Paramount is around $10 billion, Josh. So it will be interesting to see what the industry landscape is going to look like now and if this deal proceeds. But it sounds like it's certainly in the works the reportedly have bankers on the line discussing this one.

JOSH LIPTON: Yeah. So it's because-- we were literally just talking about this earlier in the show, this has been the rumors and reports about Paramount have been going on for a while now. What was the future of this company? Was it a strategic partner? Would it be a buyer?

The stock had jumped earlier this month, because we did have reports on various outlets that, remember, Skydance and Redbird, it was told, were eyeing a potential deal to buy a majority stake in NAI, which is the parent company. And in fact, we were told about how some analysts, they were only on the sidelines because of rumors like this. They would have had to sell, but they were at a hold because they were waiting for this kind of news to hit. So very interesting that it comes.

Folks are talking about the possible synergies of why you would deal with this. They're pointing to WBD's international distribution.

DIANE KING HALL: Streaming.

JOSH LIPTON: That gives a boost to Paramount-- Paramount's got the children's programming, they're noting. Those assets maybe that could be helpful to WBD's streaming ambitions. So it's certainly interesting the synergies we'll see how it plays out.

DIANE KING HALL: Yeah. And then especially when you think about the streaming landscape in general and a combination of the two, could they run up against the powerhouse? We know that is Netflix. And no other streamer has been able to really come close to where Netflix is. Of course, Disney has a stronghold when you think about the Disney customer. And could a combination of the two of Paramount Plus and Max create a stronger streamer there?

JOSH LIPTON: Yeah, right. I mean, you're right to point the broader trends of cord cutting just force these companies to rethink their futures here. A lot of time you talk about media consolidation. You could argue like at a very high level, it makes sense. But there's always these bigger questions about price, about you have to take in future of ad sales, your financing costs. That can sort of-- backdrop is often really challenging to make a deal happen. Maybe they'll find one here. We'll see. I mean, it's early. Maybe it doesn't happen at all.

DIANE KING HALL: And the question of how leveraged is WBD in this, where is the cash coming from and where is the capital coming from for Zaslav to make a deal like this happen.