FirstFT: Warner and Paramount hold early stage talks

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Warner Bros Discovery and Paramount Global are in early talks to merge, in a media deal that would combine the owner of HBO and CNN with the studio behind the Mission Impossible films and CBS News. 

Warner chief executive David Zaslav and Paramount chief Bob Bakish discussed a possible deal over lunch at Paramount’s offices in New York this week, according to three people familiar with the matter. Billionaire Shari Redstone, who controls Paramount, has also held preliminary talks with Skydance, the production company behind Top Gun: Maverick, run by David Ellison.

The discussions come as US media groups are struggling to improve their profitability after waging a costly “streaming war” against Netflix, resulting in a build-up of debt.

Big entertainment groups including Warner, Paramount and Disney have been on a cost-cutting mission as they try to shrink losses running into the billions of dollars from their video streaming services.

Warner and Paramount had stock market capitalisations of $28bn and $10bn respectively at the close of trading yesterday but both companies’ shares fell in after-market trading. Read more on the reaction to the talks.

And here’s what I’m keeping tabs on today:

• Economic data: The US commerce department will release its final estimate for the country’s gross domestic product in the third quarter and weekly initial claims for US state unemployment aid, a proxy for lay-offs.

• Nike: The sportswear group is projected to post a slight increase in revenue to $13.4bn for the three months to November. However, profits are expected to fall marginally to 84 cents a share from 85 cents.

Five more top stories

1. Argentina’s new libertarian president Javier Milei unveiled a sweeping emergency decree last night that mandated more than 300 measures to deregulate the country’s economy. “Today we are taking our first step to end Argentina’s model of decline,” Milei said in a pre-recorded broadcast. Read more on the measures which triggered protests in Buenos Aires.

2. The US has released a close ally of Venezuelan president Nicolás Maduro in exchange for 10 Americans jailed in the Latin American country, as well as convicted Malaysian defence contractor Leonard Francis, also known as Fat Leonard. In return, Venezuela will release 10 Americans, including six who were classified as wrongfully detained. Caracas also agreed to free 20 Venezuelan political prisoners, officials said. The releases are part of an effort by Washington to reset relations with Caracas.

3. Belgium suspected for years that a Flemish far-right politician was a Chinese intelligence asset but were unable to prosecute him, the country’s justice minister told the Financial Times. Frank Creyelman was used as an asset by Chinese spies for more than three years, an investigation last week by the FT, Der Spiegel and Le Monde revealed. Here’s why authorities could not press criminal charges against him.

4. Football’s governing bodies have lost a landmark court case that threatens their hold over the sport in Europe. The EU’s top court found today that Uefa, which oversees European football, and the global body Fifa, acted unlawfully in threatening to sanction players and clubs that joined the European Super League in 2021. Here’s more on the ruling that threatens to upend the status quo in European football. 

5. Workers at a Wells Fargo bank branch in Albuquerque yesterday voted to form a union, making them the first employees of a major US bank to unionise in the latest sign of the resurgence of the labour movement in America. The workers will become part of the Communications Workers of America. Workers at a branch in Bethel, Alaska will vote today on whether to unionise.

In-depth

The Colorado Supreme Court’s ruling this week marked a new chapter in the deepening stand-off between Donald Trump and the US justice system. But as the former president has done with the 91 criminal charges he is facing across state and federal jurisdictions this year, he will try to turn the latest legal threat into political gold.

We’re also reading . . . 

• India: As Narendra Modi seeks a third term in office, in an exclusive interview with the Financial Times, he responds to claims that he represents a threat to democracy.

• Peak oil: As resilience to supply disruption grows and the energy transition speeds up, Opec+ is struggling to hold the world to ransom with high energy prices, writes Chris Giles.

• Backlash against Nippon Steel: However ugly US steel-state politics are on the eve of an election year, leveraging mistrust of Japan is a perversely odd strategy, argues Leo Lewis.

Chart of the day

When Wall Street banks began sending out their annual forecasts to clients a month ago, they were broadly united in the view that government bonds would rally next year as interest rates start to fall. But many forecasts have already been met more than a year early, highlighting how recent market moves have taken analysts by surprise.

Take a break from the news

FT Alphaville publishes its 10th annual longlist of person of interest, as well as a round-up of FT staff’s favourite non-FT articles of the year.

Additional contributions from Tee Zhuo and Benjamin Wilhelm