Wall Street is finally saying the quiet part out loud: the Paramount–Warner Bros. Discovery merger is an IP play, and the IP is Superman, Batman, and Harry Potter.
Morgan Stanley’s head of media and entertainment research, Sean Diffley, told Yahoo Finance‘s Brian Sozzi on Saturday that the firm expects the $110 billion deal to get done, and that the combined HBO Max and Paramount+ can climb out of the streaming mid-pack and go toe-to-toe with Netflix.
Diffley pointed to Lord of the Rings, Game of Thrones, Harry Potter, Superman and Batman, calling the combined company’s franchise stable “the best IP portfolio in the world.”
Paramount+ and HBO Max are the fourth or fifth streamers today, per Diffley. Together, he says, they can be the second or third, and over time, the market will stop pricing the combined service as an also-ran and start treating it as a must-have in the Netflix tier.
With roughly 200 million combined subscribers against Netflix’s 325 million-plus, the math isn’t crazy.
Paramount Plans To Outspend Netflix — With AI Cutting Costs
Diffley says the combined company will spend more than $30 billion a year on content, well above Netflix’s roughly $20 billion.
The other side of the strategy is cutting production costs. Morgan Stanley estimates AI could save studios 20% to 40%, particularly in pre- and post-production, where digital fixes can replace expensive reshoots and return trips to location. We’ve also been told this is Disney’s similar strategy going forward.
In other words, Paramount plans to spend more than Netflix while using AI to make that money go further. Diffley believes few companies are better positioned to capitalize on both sides of that equation.
Wall Street Just Endorsed The Ellison Playbook
Sound familiar? It should.
As Cosmic Book News exclusively reported, David Ellison’s entire approach is spreadsheets over sentiment: internal data driving a back-to-basics reset built around the franchises Wall Street is now drooling over, from Wrath of Khan-era Star Trek to DC’s crown jewels.
And note which names anchor Diffley’s list: Superman and Batman. The same IP heading for a hard reset, with James Gunn’s DC future an open question as his contract runs down and the new regime moves in. We’re told the SnyderVerse is back fully in play.
The market, meanwhile, is still waiting for the ink to dry: Paramount Skydance stock is down around 30% on the year, with WBD off about 7%. The bull case is now on the table. The deal just has to close.
The Endgame Collides With Comic-Con
Paramount had been gunning for a July 15 close, but told an Oregon court this week the deal won’t close before July 22 — the first day of San Diego Comic-Con — as European regulators finish their review and Oregon’s attorney general pushes for a 60-day pause, with a hearing set for Monday.
A multistate antitrust suit from state AGs could land as soon as next week on top of that.
The DOJ has already cleared the deal, the FCC still has to sign off on the foreign ownership, and if things drag past September 30, a ticking fee starts running to WBD shareholders.
So the biggest media deal in decades could close while Hall H is in session. Grab your popcorn.
