NEW YORK CITY, New York: Hollywood could be on the brink of another blockbuster merger, with Paramount Skydance preparing a bid to acquire Warner Bros Discovery, a source familiar with the matter said.

The potential deal, first reported by the Wall Street Journal, would be backed by Skydance CEO David Ellison and his father, Oracle co-founder Larry Ellison. If successful, it would unite some of the most recognizable names in film, television, and streaming — from Superman and SpongeBob SquarePants to "The Matrix," "Star Trek," HBO, and CNN.

"This deal is the Hollywood equivalent of a sequel no one expected, but everyone sort of saw it coming," said eMarketer analyst Jeremy Goldman.

The move comes just weeks after Skydance completed its US$8.4 billion takeover of Paramount Global. No formal offer for Warner Bros Discovery has yet been made, and the talks could still collapse, the Journal reported. Even so, shares of Warner Bros Discovery surged as much as 30 percent on the news, while Paramount jumped 15 percent. Both companies declined to comment.

Warner Bros Discovery has been working to split its declining cable operations from its studio and streaming units under CEO David Zaslav. Skydance, however, is reportedly aiming to buy the entire company in a mostly cash transaction. "For WBD shareholders, a cash-rich exit is far more appealing than waiting around for Zaslav's restructuring magic to (maybe) pay off," Goldman said.

The combination would fuse two Hollywood giants and bring together HBO Max and Paramount+ in a bid to compete with streaming rivals Netflix, Disney, and Comcast. Analysts say any deal would hinge on Larry Ellison's financial muscle and political influence, though it would almost certainly face scrutiny from U.S. antitrust regulators.

"The DOJ will want to investigate whether the merger could lead to higher prices for consumers, reduce bargaining power for creators, and diminish content diversity," said Andre Barlow, an antitrust attorney in Washington. Still, he noted the Trump administration's Justice Department may be more lenient than its Biden-era counterpart.

Paramount Skydance had a market value of $16.4 billion before news of the potential offer, while Warner Bros Discovery was valued at about $30 billion and carried net debt of the same amount. Douglas Arthur, an analyst with Huber Research, said Ellison's resources make the deal realistic: "It's a very doable deal, I think it might even make sense. Certainly, there's no lack of cash in the Ellison family."

Larry Ellison, whose 41 percent stake in Oracle has pushed his fortune above $360 billion, has been instrumental in financing Skydance's expansion. After the Paramount merger, David Ellison said his priority would be strengthening the company's film slate, restructuring Paramount+, and positioning the group for growth in the streaming wars.