Paramount completes Warner takeover, creating Skydance

On Tuesday, Paramount finalized its acquisition of Warner Bros Discovery, merging two prominent Hollywood studios under the leadership of David Ellison. The newly formed entity, Skydance, will encompass Paramount Pictures, Warner Bros Pictures, CBS News, CNN, HBO, and CBS television brands. Ellison intends to eventually integrate the Paramount+ and HBO Max streaming services.

The historic day, according to Ellison, signifies a major shift for the entire industry. However, critics have expressed concerns that the new media giant may align its news coverage with the interests of the US President, Donald Trump, due to the family's ties to him. Trump, while leaving the White House, expressed optimism about the new company.

The merger comes at a time when the entertainment industry is experiencing significant changes, with streaming services and YouTube competing with traditional TV and movie theaters for viewers' attention. Following the approval of the deal by a California federal judge, the merged company will operate under the ticker SKYD on the New York Stock Exchange.

Although the deal initially faced challenges, including a lawsuit from 12 US states, it was ultimately approved by the Trump administration in June without any modifications to the business structure. Skydance, projected to generate nearly USD 70 billion in annual revenue, aims to achieve cost savings exceeding USD 6 billion within three years.

Ellison will assume the roles of chairman and CEO, while Ynon Kreiz, formerly of Mattel, will serve as co-CEO, overseeing daily operations and the integration process. The agreement is backed by USD 47 billion in new equity led by the Ellison family, private equity firm RedBird Capital, and the sovereign wealth funds of Saudi Arabia, Qatar, and Abu Dhabi.

Ellison's father, Larry Ellison, the co-founder of Oracle, also contributed substantial funding and a guarantee to support the deal. Opponents within the film industry have raised concerns about potential job cuts in Hollywood, a reduction in film productions, and potential compromises in the independence of CNN's news coverage, which could be affected by the combined company. The settlement with the states includes provisions to safeguard CNN's editorial independence.