Paramount completes Warner Bros takeover, creating Skydance

Paramount concluded its acquisition of Warner Bros Discovery on Tuesday, merging two iconic Hollywood studios under the leadership of David Ellison. The newly formed company, Skydance, encompasses Paramount Pictures, Warner Bros Pictures, CBS News and CNN networks, as well as HBO and CBS television brands. Ellison aims to eventually consolidate Paramount+ and HBO Max streaming services.

Today marks a significant milestone not only for Skydance but for the entire industry, stated Ellison. However, critics have raised concerns that the new media giant, with ties to US President Donald Trump, may align its news coverage with the White House.

The newly united corporation faces numerous challenges, as the entertainment industry undergoes a transformation with streaming services and YouTube capturing the attention of viewers, while traditional TV and movie theater audiences dwindle. Skydance shares experienced a decline of over 4.5% on their debut trading day on the New York Stock Exchange under the ticker SKYD.

The deal, which closed less than a week after a California federal judge approved a settlement between Paramount and 12 US states contesting the transaction on antitrust grounds, was approved by the Trump administration in June. Skydance, with an annual revenue of nearly US$70 billion, plans to realize more than US$6 billion in cost savings within three years. Ellison will serve as chairman and CEO, while Ynon Kreiz, a former Mattel chief, will oversee day-to-day operations and integrate the two businesses.

The deal was backed by a US$47 billion infusion of new equity led by the Ellison family, private equity firm RedBird Capital, and sovereign wealth funds of Saudi Arabia, Qatar, and Abu Dhabi. Ellison's father, Larry Ellison, Oracle founder and billionaire, provided substantial funding and guaranteed loans backing the deal. The Ellison family holds the majority equity stake in Skydance.

Opponents in the movie industry have expressed concerns that the combined company would lead to job cuts in a Hollywood already facing challenges and reduce the number of films produced yearly. News media groups also fear that CNN's independence could be jeopardized. The settlement with the states includes several safeguards to protect CNN's editorial independence.