Paramount, the Hollywood studio controlled by Skydance, has completed its takeover of Warner Bros. Discovery. The deal creates a new entertainment group called Skydance and ends a fight of roughly a year. Including debt, the transaction is valued at nearly $111 billion, though the AP reports the equity value of the purchase at about $81 billion. The combined company starts life with around $80 billion in debt.
The merger puts under one roof HBO Max, Paramount+, the news networks CNN and CBS, and franchises from Harry Potter, Batman and Game of Thrones to Top Gun, Mission: Impossible and The Godfather. David Ellison, son of the tech billionaire Larry Ellison, leads the company alongside new co-CEO Ynon Kreiz, formerly of toy maker Mattel. Executives have promised investors $6 billion in annual cost savings. On the first day, Skydance branding reportedly appeared on screens at CNN's New York headquarters, and the Ellisons sent staff a memo warning of "difficult decisions" ahead.
The path to closing was turbulent. Warner first agreed a studio and streaming sale to Netflix in December, but Paramount launched a hostile counterbid for the whole company, including CNN. After raising its offer to $31 per share, Paramount saw Netflix withdraw. Antitrust hurdles were cleared at the US Justice Department and abroad, but 12 states led by California sued in July, fearing less competition and higher prices. A September settlement, approved by a judge, requires Skydance to release at least 30 films a year in cinemas for two years and 32 a year for the following three, with a payment due for each film it falls short. It also commits extra US production spending, funds retraining for displaced workers and creates a "News Editorial Independence Board" for CNN and CBS. Funding came partly from Saudi Arabia, Qatar and the United Arab Emirates, whose investment the US Federal Communications Commission approved; the investors would hold no voting rights, but critics including commissioner Anna Gomez fear hidden influence.
The reaction has been sharply divided. Thousands of actors, writers and directors signed a letter opposing the deal, warning of lost jobs and less choice, while others, including director James Cameron, backed Ellison. A study for Los Angeles County estimated about 4,500 direct film and TV jobs could be lost. Lawyers note the settlement does not limit layoffs, and analysts expect streaming prices to rise as the company services its debt.
CNN is a particular focus. President Donald Trump has repeatedly attacked the network, and the Ellisons are close to him. Ellison says editorial independence will be maintained and has kept CNN chief Mark Thompson in place. Critics argue the oversight board, whose appointments Paramount influences, will have little power. How the new group balances cost cuts, cinema commitments and newsroom independence will show what the biggest Hollywood merger since Disney's purchase of 20th Century Fox means in practice.