Paramount completed its takeover of Warner Bros. Discovery on Tuesday, ending a fight that lasted roughly a year and creating a Hollywood heavyweight that now goes by a single name: Skydance.
The deal values Warner at about $81 billion, according to The Associated Press, or close to $111 billion once billions of dollars in debt are counted. Reuters put the total at $110 billion. Shares of the combined company moved from Nasdaq to the New York Stock Exchange on Tuesday under the ticker “SKYD.”
“Today is a historic day, not just for Skydance but for our entire industry,” CEO David Ellison said in a statement. “We couldn’t be more excited to get to work.”
What changes hands
The merger joins two of the country’s oldest movie studios. Paramount Pictures, home of “Top Gun” and “The Godfather,” and Warner Bros., the studio behind “Harry Potter” and DC Studios, now sit inside the same company. So do the CBS and CNN news networks and the Paramount+ and HBO Max streaming services.
Ellison said the Skydance name was chosen so that the Paramount and Warner Bros. studios could keep their own identities instead of being folded into a new brand, Reuters reported. Some analysts said the name also underscores how much control Ellison now has over some of Hollywood’s best-known brands.
Ellison will oversee creative direction and overall strategy. Former Mattel CEO Ynon Kreiz has been named co-CEO and will run daily operations and the integration. CNN chief Mark Thompson and CBS News editor in chief Bari Weiss are staying in their roles.
A long road to closing
Skydance acquired Paramount for $8 billion last year before turning to Warner. Warner first agreed in December to a studio and streaming deal with Netflix, but Paramount answered with a hostile bid for the entire company, including CNN and Discovery. After months of back-and-forth, Paramount raised its offer to $31 a share for all of Warner, Netflix withdrew, and the two companies signed a merger agreement in late February.
The deal drew loud opposition in Hollywood. In April, thousands of actors, writers and directors signed an open letter declaring their “unequivocal opposition,” warning of fewer jobs and less choice for audiences. Others lined up behind Paramount: Tom Cruise narrated a short promotional film about the studio at the CinemaCon trade show, and director James Cameron voiced support for Ellison.
The Justice Department and regulators abroad cleared the merger over the summer. In July, however, Democratic attorneys general from 12 states, led by California’s Rob Bonta, sued to block it, arguing that it would reduce competition for moviegoers and cable customers. Settlements reached in September, later approved by a judge, require the company to increase U.S. film production over five years, put millions of dollars into a fund for displaced workers, and create a “News Editorial Independence Board” to monitor CNN and CBS. A settlement with a Hollywood writers union also removed a legal obstacle, Reuters reported. Critics argued the remedies did not go far enough.
Foreign money and political scrutiny
Paramount financed part of the purchase with backing from Saudi Arabia, Qatar and the United Arab Emirates. The Federal Communications Commission approved indirect foreign ownership of up to 100% of the company’s equity, though Paramount has said it expects those funds to hold nearly 50% with no voting rights. FCC Commissioner Anna Gomez, the agency’s only Democrat, called the decision alarming.
The takeover has also played out against President Donald Trump’s repeated attacks on CNN. Ellison has said CNN’s editorial independence will be preserved.
The work ahead
Skydance now has to merge two large companies while delivering $6 billion in planned cost savings. Paramount has said much of that will come from “non-labor sources,” such as combining streaming technology and cloud providers, but the cuts are still expected to affect jobs across the industry. The company is expected to carry about $80 billion in debt, adding pressure on Ellison to grow streaming, protect cash flow from cable networks and improve box office results.
