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Timing is everything, and doesn’t Steven Cahall know it. Over the past week, the esteemed Wells Fargo research analyst published a series of thoughtful and provocative notes riffing on the need for serious consolidation in both Hollywood and the shrinking world of linear TV. On September 8, Cahall suggested that Versant and Warner Bros. Discovery’s soon-to-be-spun-off cable business should be combined, and then pursue the sports and broadcast assets of Fox Corporation. Two days later, Cahall published another report, about who should buy David Zaslav’s studio and streaming business.

Then, on Thursday, courtesy of a leak to The Wall Street Journal, came the tectonic news that Paramount Skydance—under its new owners, the uber-wealthy Ellison family and RedBird Capital—wanted all of WBD, and was preparing an all-cash offer for the company. It was quite the bombshell, obviously, for reasons beyond David Ellison’s stunning ambition. First, there was the rather large differential between the two companies’ equity value: PSKY is being valued in the market at around $8 billion, and Cahall’s expectation is that Zaz’s business alone, post-spin, would be valued at $37.5 billion. The other reason was that the rumored bid runs counter to the current market narrative that linear TV assets should be separated from more desirable Hollywood studio and streaming businesses.

In any case, the simplest explanation is that the Ellisons want to get big, and fast, and figured the quickest way would come through a blockbuster acquisition that would unite CBS with CNN, Paramount with Warner Bros., and Paramount+ with HBO Max (a longtime Zaz fantasy). After all, the Ellisons and RedBird blitzkrieg has already led to a $7.7 billion, seven-year rights deal for UFC, and they seem poised to bring Bari Weiss and her Free Press into the fold for more than $100 million or so, too. Clearly, this is no longer the Redstones’ Paramount. Paramount Skydance is now on “double-door lockdown,” I’m told, so all is quiet in that camp.

Even though both deals remain in the rumor stage, the leaks got Wall Street’s attention. In the two days since the Journal reported the possible offer for WBD, the company’s stock shot up some 55 percent, and now has a market value of $47 billion, plus another $30 billion or so of net debt. PSKY’s stock, meanwhile, is up around 24 percent since the leak. In other words, equity investors seem to be rooting for the combination—and that’s going to make things more challenging for Zaz and his WBD board of superstars, including John Malone and newcomers Anton Levy, Joey Levin, and Anthony Noto. (Their recent addition to the board was not by accident; they are deal guys, and WBD is in deal mode.)

The speed with which the new Paramount owners are trying to make their mark on Hollywood and the media business is impressive. Sure, they’ve had more than a year to think about what they were going to do with Paramount Global, but you don’t see this very often. On the other hand, the timing is fortuitous: Zaz effectively put WBD in play when he announced the split of the company in June. (His new contract, in fact, rewards him for getting some deal done by the end of 2026.) Another lucky break also came this week when Larry Ellison’s net worth skyrocketed to some $400 billion, briefly making him the world’s richest man, thanks to his ownership stake in Oracle and enthusiasm over its A.I.-related deals. (Elon has since recaptured the top spot.) I’m sure papa Ellison can spare the money to help David create the largest studio business in Hollywood.

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The plan is not without risk, as Rich Greenfield, at LightShed Partners, pointed out. Should the Ellisons’ bid for a presplit WBD fall flat, they will be precluded, for tax reasons, from buying WBD or its pieces for two years after the split takes place, because they would have had “conversations” about buying the company before the split. But analysts are loving the prospect of the deal anyway. As Peter Supino, at Wolfe Research, wrote on Friday, “We admit it—we find this concept exciting.” He likes the fact that the combined studio would be the largest, and the combined streamers among the top five, and predicted that the business could find “initial cost synergies” of some $3 billion—$1.5 billion from duplicative costs at streaming and studios, $1.2 billion from the reduction of Warner Bros.’ corporate costs, and $250 million from the linear assets—before (probably) any cost savings from the combination of CBS News and CNN.

Supino predicted the deal would sail through the regulatory process, and flagged the combination of Cartoon Network and Nickelodeon as a potential hurdle. He noted, however, that there is a bear case for the deal, which is that most “large cap” media mergers—Disney/Fox; Warner/Discovery; Viacom/CBS—have not worked out particularly well for shareholders. “Big media companies carry a lot of linear baggage,” he wrote. “Studio accounting is subjective. It’s proven hard to combine streaming services accretively because consumers resist higher prices and content gets lost.” Still, it seems likely the Ellisons and Bari Weiss have greased the skids with Trump to make the deal go down smooth.

Of course, the potential deal is in the euphoria stage. Now, the big questions are whether the Ellisons will follow through on making an offer in the next week or so, and whether anyone else comes along—Apple, Alphabet, Netflix, Amazon, etcetera—to give Paramount Skydance a run for its money. But it’s unlikely that anyone else besides the Ellisons would want all of WBD. If that were the case, WBD probably would not have gone the split route in the first place.

If he doesn’t want to sell the company, the challenge for Zaz will be to convince his clever board—and the marketplace—that more shareholder value will be created by splitting the company apart than by keeping it together and selling it now, or by splitting it apart and then selling the parts later for a higher price than what Paramount Skydance will offer. In his September 10 report, Cahall pegged Zaz’s studio and streaming business at an enterprise value of $65 billion alone, and hypothesized that Netflix was the “most compelling buyer.” Other interested parties, he argued, could include Amazon, Apple, Comcast, and, yes, PSKY. He envisioned some regulatory hurdles for Amazon, Apple, and Comcast; as for PSKY, he thought the “big private check” could be problematic, but not a deal-breaker. He didn’t see much likelihood that Sony would make a bid, and didn’t mention Alphabet, for good reason.

In his September 8 report, Cahall estimated the value of WBD’s linear TV assets—the portfolio that WBD C.F.O. Gunnar Wiedenfels is slated to oversee as C.E.O.—at between $10 billion and $12 billion, at least before the EBITDA continues its downward slide. Taking the two together—say, $10 billion for linear TV, and $65 billion for studio and streaming—would give Zaz at least $75 billion of enterprise value to work with, if he wanted to make the stand-alone case. But with WBD’s enterprise value already at around $77 billion, given the dramatic run-up in the past two days, that’s going to be a harder and harder argument for him to make.

I think Zaz will wait to see how real the Ellisons’ offer is, and then try to gin up a competitive sale process. I suspect he’s determined to run some sort of auction, which of course is standard M&A practice, especially for a public company receiving an unsolicited cash offer. Zaz is no neophyte to the M&A game: He’s probably made 150 deals over his career at GE, Discovery, and at WBD. He knows what he’s doing on this front, and he’s got a board that will back him up.

But I’m not optimistic he’ll find a better deal than the one he may be getting from Ellison, especially for the whole company, and especially now. So when that auction process comes a cropper, I imagine he’ll try some half-hearted negotiations with Ellison to get a higher offer from them. He’ll probably get a little more—Greenfield is predicting $20 to $22.50 a share from the Ellisons—and then take the money and run.

After all, you may remember that Zaz amended his employment agreement on June 12. In that new deal, he was granted 20.9 million WBD options, with a strike price of $10.16 a share. He will get another 3 million options, also at $10.16 a share, on January 2, 2026, assuming he’s still employed then. (He will be.) You may also remember that his various other option incentive packages had strike prices that started at around $28 a share, ratcheting up to $43 a share—in other words, way out of the money, even at $22.50 a share. At the moment, the WBD stock price is $18.87 a share, thanks to the Wall Street Journal leak. Let’s say Zaz gets the Ellisons to cough up $20 a share. Upon a change of control, most, if not all, of Zaz’s options vest. By my back-of-the-envelope calculation, if he sells the company for $20 a share, the new option package alone will be worth something like $235 million in intrinsic value. Not Ellison-level wealth, but not too shabby, either.

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