Paramount and Warner Bros. Discovery complete $110 billion merger

The Big Picture

Paramount Skydance has completed its takeover of Warner Bros. Discovery, creating a combined entertainment company called Skydance. The transaction was valued at about $110 billion by the BBC, CNBC and the Guardian, while NPR and Ars Technica put the figure at $111 billion.

The merger brings two historic Hollywood studios, Paramount Pictures and Warner Bros. Pictures, under one owner. It also combines HBO, HBO Max, Paramount+, CBS, CNN, Showtime, Nickelodeon, Comedy Central and other television, film and streaming assets. The deal followed a lengthy contest that included competing bids, legal challenges and objections from state attorneys general.

What Happened

Skydance formally closed the deal on Tuesday, with David Ellison serving as chairman and co-chief executive. Ynon Kreiz, the former Mattel chief executive, is also co-chief executive and will lead day-to-day operations and integration, while Ellison focuses on strategy, technology and the company’s creative direction.

Mark Thompson will remain chairman and editor-in-chief of CNN Worldwide, and Bari Weiss will remain editor-in-chief of CBS News. Casey Bloys, who led HBO and Max content at Warner Bros. Discovery, will become co-chair and chief content officer of Skydance’s direct-to-consumer business, overseeing HBO Max and Paramount+ alongside co-chair JB Perrette.

Ellison told CNBC that the combined streaming services have more than 200 million global subscribers. The company now also has a large traditional television business, including the CBS broadcast network and cable brands such as CNN, TNT, MTV and BET.

Why It Matters

The merger further concentrates power in an entertainment industry already shaped by consolidation. Warner Bros. and Paramount join Sony, Disney and Universal as the remaining major-studio players in Hollywood, according to the Guardian.

For viewers, the most immediate question is how Skydance will handle HBO Max and Paramount+. The company plans eventually to combine the services, but it has not announced a timetable or settled whether the near-term offering will be a single app or a bundle. Analysts cited by the BBC said the larger catalog could bring short-term value for subscribers who already pay for both services, but they expect prices to rise over time.

The BBC reported that Skydance has about $80 billion in debt related to the transaction. Ellison said the company expects $6 billion in merger-related savings, though he told reporters that most of those savings would not come from job reductions.

What Each Side Is Saying

Ellison called completion of the deal a historic moment for the industry, saying the combination would create a stronger competitor with broader resources and reach. He has also sought to address concerns about political influence over the company’s news outlets. Speaking to reporters, Ellison said Skydance had not discussed news coverage with political leaders and that CNN and CBS News would be completely editorially independent.

Those assurances have not ended skepticism. As part of a settlement that resolved litigation brought by a California-led group of state attorneys general, Skydance agreed to create a news editorial-independence board for CNN and CBS. The BBC reported that Paramount will appoint the board. Seth Stern of the Freedom of the Press Foundation told the BBC that the arrangement was “worthless,” arguing that a Paramount-appointed board could not ensure independence.

Workers and industry advocates are also focused on potential layoffs. A CVL Economics report prepared for Los Angeles County and cited by the BBC estimated that the merger could eliminate roughly 4,500 direct film and television jobs and result in $1.26 billion in lost wages over three years. The settlement includes a workforce fund for retraining displaced employees, but does not prohibit layoffs.

What Happens Next

The settlement imposes film-release requirements intended to preserve theatrical production. Skydance must release 30 films annually for its first two years, followed by 32 films a year for the next three, for a total of 156 movies over five years. It must release at least four independent films each year. If it misses the quota, the company could be required to sell its 49% stake in Miramax.

The agreement also requires at least 20% of film production to occur in the United States during the first two years, rising to more than 30% in the following three years. But the obligations are temporary, and the combined company’s long-term strategy, including its streaming product and staffing plans, remains unsettled.