Paramount Skydance closed its $110 billion acquisition of Warner Bros Discovery on Tuesday, completing one of the biggest media mergers of all time after engaging in a bruising battle for control with Netflix and fending off antitrust lawsuits.
The new company, which is to be called Skydance, combines two of the five largest Hollywood film studios, covering major franchises such as Harry Potter and Mission Impossible. It will be home to dozens of TV networks, from CBS to TNT, and two major subscription streaming services, Paramount+ and HBO Max.
David Ellison, who completed the merger of his Skydance Media film production company with Paramount in 2025, has become one of Hollywood’s biggest moguls.
He appointed Ynon Kreiz, formerly chief executive of Mattel, to share oversight of Skydance as co-chief executive. Mr Kreiz will manage day-to-day operations, while Mr Ellison maintains the creative vision and handles relationships with talent.
“Today is a historic day, not just for Skydance but for our entire industry,” Mr Ellison said in a statement.
After pulling off two mega-mergers of century-old Hollywood companies in little more than a year, he now faces the significant challenge of making it all work. That means eliminating overlapping businesses and jobs without fanning the ire of Hollywood, which is suffering through a downturn and has opposed the consolidation from the start. Skydance also will need to manage nearly $80 billion in debt while adhering to a strict calendar of theatrical releases as stipulated by the lawsuit settlement.
The path to closing the merger was often rocky and at times seemed likely to derail the endeavour. But Mr Ellison deemed the deal to be essential if he was to compete with the likes of Netflix, Disney, Amazon and Apple.
“They’re starting off at a great place,” Michael Wolf, chief executive of management consulting firm Activate Strategy, told Bloomberg TV on Monday. “The logic makes sense. Scale puts them in the right position. Now they have to deliver against scale.”
Paramount agreed to acquire Warner Bros in February after a months-long bidding war against Netflix, which had previously committed to purchasing Warner Bros’ studios and streaming business, but not its cable channels.
Mr Ellison clinched the deal by sweetening the offer price and bringing his father, Larry Ellison, in to personally guarantee funding. Paramount paid a $2.8 billion break-up fee to Netflix on behalf of Warner Bros and said it would be able to close its own deal quickly, promising to pay fees to Warner Bros' shareholders of $7 million a day if the deal was not finalised by September 30.
While Paramount managed to secure antitrust approval from the US Department of Justice, the EU and other jurisdictions, it was delayed by a pair of lawsuits brought by 12 states and the Writers Guild of America, which were concerned about the threat of higher prices for consumers and fewer jobs. Thousands of actors, directors, writers and producers signed a letter protesting against the deal.
Much of that fear stemmed from Paramount’s pledge to extract more than $6 billion in annual synergies within three years of closing the merger.
Gerry Cardinale, founder and managing partner of RedBird Capital Partners, a Paramount investor, said there were other ways to cut costs and operate more efficiently than reducing jobs. A company would not spend billions of dollars a year making movies “and figure your entire premise of your business plan is to fire everybody in Hollywood", he said at the Bloomberg Screentime conference in Los Angeles last week. “It’s just the opposite.”
Heavy debts
Skydance’s debt load will continue to weigh on the company, however. Its interest bills are much higher now than if it had issued debt just a few months earlier, since inflation concerns have lifted global borrowing costs.
Paramount sold $52 billion of loans and bonds in only a week, a tight timeline for any debt deal – particularly for one of the largest financings in recent history.
As part of a negotiated settlement with the states, whose case was led by California's attorney general Rob Bonta, Paramount vowed to release at least 30 films a year in theatres and keep them there for 45 days, before making them available for viewing at home.
The company also agreed to create an editorial independence board for its news organisations, CBS and CNN, an effort to address concerns that the Ellison family’s close ties with US President Donald Trump would cause them to try to influence coverage.
Mr Ellison has so far agreed to keep CBS and CNN separate and under different leadership. In announcing a new executive team on Monday, he said CNN chief executive Mark Thompson would remain in his role and Bari Weiss would keep her title as editor-in-chief of CBS News.
While acknowledging “trepidations about this moment", Mr Thompson said in a letter to staff that he had “real confidence” that the Skydance leadership understood “and will fully support the principle and practice of the kind of independent news that CNN has always stood for".
Dana Goldberg, a long-time Skydance Media executive who developed and produced films including Top Gun: Maverick, and Josh Greenstein, a former president of Sony Pictures’ Motion Picture Group, will jointly oversee the new Skydance Motion Picture Group. James Gunn and Peter Safran, the co-chiefs of DC Studios, will continue in their roles at Skydance.
Casey Bloys, who has ushered in hits for HBO including Game of Thrones spin-off House of the Dragon, will be in charge of Skydance’s streaming division, overseeing HBO Max and Paramount+ programming. George Cheeks, who joined Paramount in 2020, is to manage a newly formed TV division, encompassing a mix of Paramount and Warner Bros studios, networks, sports and cable brands.
JB Perrette, who led the global introduction of the HBO Max streaming service at Warner Bros, will work as co-chairman and chief business officer of Skydance TV and Skydance streaming.
While Mr Kreiz’s appointment came as a surprise to many on Wall Street, his experience complements Mr Ellison’s, bringing years of oversight of a large public company and more than three decades in entertainment.
During his tenure at Mattel, Mr Kreiz was instrumental in pushing the toy company to capitalise on its beloved brands, such as Barbie and Hot Wheels, turning them into franchises that could span movies, TV and games.
One executive who will not be part of the new team at Skydance is David Zaslav. The president and chief executive of Warner Bros is to take his leave along with potentially more than $667 million in cash severance and stock awards triggered by the sale.
