Paramount closes deal to acquire Warner Brothers Discovery

Paramount finalized its $110 billion acquisition of Warner Bros Discovery on Tuesday (Oct 6), forming the entertainment conglomerate Skydance and placing CEO David Ellison in charge. This merger combines renowned studios like Mission: Impossible, Harry Potter, and DC alongside major networks CBS, CNN, Paramount+, and HBO Max, creating a vast multimedia empire across film, television, and news.

The combined entity will trade under the ticker SKYD on the New York Stock Exchange, replacing its previous Nasdaq listing. Legal hurdles were cleared with agreements from US states and a Hollywood writers union, marking one of the largest media mergers in history. The deal comes amid challenges for Hollywood, including falling cable-TV subscriptions, stiff competition for streaming viewers, and ongoing union negotiations over job security and creative worker rights.

Skydance CEO David Ellison revealed he selected the Skydance name to maintain the distinct identities of Paramount and Warner Bros rather than merging them under a new brand, yet analysts argue the moniker underscores Ellison’s extensive control over the company and his potential to shape its strategy and culture. Established in 2010 by the son of Oracle co-founder Larry Ellison, Skydance grew from a financial backer to a key producer of Paramount’s blockbuster hits, including Top Gun: Maverick.

After merging with Paramount last year, Skydance set its sights on Warner Bros, engaging in a fierce bidding war with Netflix while attracting interest from other suitors such as Comcast. Mattel’s former CEO Ynon Kreiz has been appointed Skydance co-CEO to handle day-to-day operations and integration, while Ellison focuses on creative direction and overall strategy.

The newly formed company aims to generate $6 billion in anticipated cost savings, primarily through streamlining streaming technologies and cloud services from both entities. However, the extensive scale of cuts is anticipated to impact jobs across the Hollywood industry. The merged firm is projected to carry around $80 billion in debt, placing pressure on Ellison to drive growth in streaming services, maintain cash flow from cable networks, and enhance theatrical film performance.

CNN chief Mark Thompson and CBS News Editor-in-Chief Bari Weiss will retain their leadership positions at Skydance.