Paramount Skydance closed its $110 billion (€98 billion) acquisition of Warner Bros Discovery on Tuesday, completing one of the biggest media mergers of all time after engaging in a bruising battle for control with Netflix and fending off antitrust lawsuits.
The new company, which will be called Skydance, combines two of the five largest Hollywood film studios, uniting major franchises such as Harry Potter and Mission Impossible. It will now be home to dozens of TV networks, from CBS to TNT, and two major subscription streaming services, Paramount+ and HBO Max.
David Ellison, who only completed the merger of his Skydance Media film production company with Paramount in August 2025, has continued to consolidate power in the media industry and has become one of Hollywood’s biggest moguls. Still, he brought in Ynon Kreiz from Mattel to share oversight of Skydance as co-chief executive officer. Kreiz will manage day-to-day operations while Ellison maintains the creative, big-picture vision and handles relationships with talent.
“Today is a historic day, not just for Skydance but for our entire industry,” Ellison said in a statement.
After pulling off two mega-mergers of century-old Hollywood companies in just over a year, Ellison now faces the significant challenge of making it all work. That means eliminating overlapping businesses and jobs without fanning the ire of Hollywood, which is already suffering through a downturn and has opposed the consolidation from the start. Skydance also will need to manage nearly $80 billion in debt while adhering to a strict calendar of theatrical releases as stipulated by the lawsuit settlement.
The path to closing the merger was often a rocky one and at times seemed likely to derail. But Ellison was determined to succeed and saw the deal as essential to be able to compete with the likes of Netflix, Disney, Amazon and Apple.
“They’re starting off at a great place,” Michael J Wolf, CEO of Activate Strategy, said. “The logic makes sense. Scale puts them in the right position. Now they have to deliver against scale.”
Paramount agreed to acquire Warner Bros in February following a months-long bidding war against Netflix, which had previously committed to purchasing Warner Bros’ studios and streaming business, but not the cable channels. Ellison clinched the deal by sweetening the offer price and bringing his father Larry Ellison in to personally guarantee funding. Paramount paid a $2.8 billion break-up fee to Netflix on behalf of Warner Bros and argued it would be able to clinch a speedy closing of its own deal, promising to pay fees to Warner Bros shareholders $7 million a day if the deal wasn’t finalised by September 30th.
Though Paramount did manage to get quick antitrust approval from the US department of justice, the European Union and other key jurisdictions, it was delayed by a pair of lawsuits brought by 12 states and the Writers Guild of America, who were concerned about the threat of higher prices for consumers and fewer jobs. Thousands of actors, directors, writers and producers signed a letter protesting the deal.
Much of the fear stems from Paramount’s pledge to extract more than $6 billion in annual synergies within three years of closing the merger. Gerry Cardinale, founder and managing partner of RedBird Capital Partners, a Paramount investor, said there are other ways to cut costs and operate more efficiently than simply reducing headcount. A company wouldn’t spend billions of dollars a year making movies, “and figure your entire premise of your business plan is to fire everybody in Hollywood”, Cardinale said last week. “It’s just the opposite.”
In the statement, Skydance said savings would come primarily from combining technology and other operations, such as negotiating deals with suppliers and reducing overlapping marketing expenses as well as consolidating real estate. That will make the company “leaner and more nimble”, and allow it to reduce its debt load to three times annual adjusted earnings by the end of 2029. The new company expects to generate more than $10 billion in free cash flow by 2030. – Bloomberg
