It’s Official: Paramount and Warner Bros. Discovery Merge in Skydance Mega-Merger

Enter the Skydance Era. The $111 billion transaction closes after first agreeing to a deal back in February.

The biggest media merger in history is now complete. Paramount and Warner Bros. Discovery are combined in a deal that could transform Hollywood. Paramount closed its transaction to acquire WBD on October 6 as part of a $111 billion pact. To get this point, the company had to clear several regulatory hurdles dating back to February when the deal was first reached, as well as form alliances with the Trump administration that concerned parts of the creative community.

The new parent company will now be called Skydance. David Ellison will be the combined company’s chairman and CEO, and former Mattel CEO Ynon Kreiz will be Co-CEO, as was previously announced.

“Today is a historic day, not just for Skydance but for our entire industry,” Ellison said. “From the start, our ambition was to bring these two storied studios together and create a stronger competitor, with the talent, resources, and reach to tell great stories in every genre, on every platform, for audiences everywhere. Now that ambition is a reality.”

“Our focus now turns to the future: building a company that empowers creatives, entertains audiences and rewards shareholders,” he added. “We couldn’t be more excited to get to work.”

Skydance announced its full leadership team on Monday. Former HBO and HBO Max chief Casey Bloys will be leading the streaming division of the company following the exit of Cindy Holland. George Cheeks is leading Skydance TV, which encompasses Warner Bros. Television, CBS Studios, and Paramount Television Studios. Dana Goldberg and Josh Greenstein, who currently lead Paramount Pictures, are the Co-Chairs of the Skydance Motion Picture Group, with Warner Bros. Pictures film chiefs Michael De Luca and Pamela Abdy now out. James Gunn and Peter Safran are still leading DC Studios. And Mark Thompson is continuing to lead CNN under Skydance while Bari Weiss will solely lead CBS News and not also have oversight of CNN.

The deal finally came together after overcoming and settling an antitrust lawsuit brought by a coalition of 12 states, led by California Attorney General Rob Bonta. The lawsuit argued that a combined Paramount and Warner Bros. would consolidate too many of the top theatrical releases and too many cable companies all under one roof, thus harming consumers and other companies in their ability to negotiate terms. And while the deal faced enormous pressure from a grassroots coalition of organizations in Hollywood hoping to block the merger altogether, Paramount and Ellison ultimately received the support of stars like Tom Cruise, auteurs like James Cameron, and the leaders of all the major theater chains.

The settlement agreement bounds a combined Paramount to meet some terms over the course of the first five years of the transaction. Though it wasn’t required to divest anything, it must pay penalties if it fails to release 30 to 32 movies per year as it has promised and must ultimately divest its ownership of film studio Miramax. It also needs to commit to invest $300 million annually to production in the United States, it must sustain its current levels of theatrical and cable terms, and it must even set aside a small amount of funds, $5 million annually, to the acquisition of indie films, among other terms.

The combination of Paramount and Warner Bros. Discovery gives it two legacy film studios, two major streaming services, a plethora of cable channels and sports rights, a broadcast network in CBS, and two news outlets in CNN and CBS News. But Paramount-WBD still pales in comparison to Netflix’s subscribers and in viewing hours spent to YouTube, and the hope is that the new scale will help it compete with the tech giants who have made their way into the media sphere.

The combined company carries with it $80 billion of debt, and Ellison says he has identified cost efficiencies across the companies that can help them reduce that figure without enormous labor cuts or selling one of the two iconic studio lots in the Los Angeles area, and given the history of past media mergers and massive consolidation on this scale, there’s good reason to be skeptical.

More to come…