Paramount-Warner Bros. Merger Closes, Creating Skydance

Paramount completed its $111 billion acquisition of Warner Bros. Discovery on Tuesday, consolidating two of Hollywood’s most storied studios, their streaming services and two major news outlets into a single media conglomerate called Skydance Corporation, NPR reported.

The new company, led by chairman and CEO David Ellison with former Mattel chief Ynon Kreiz as co-CEO, begins trading Tuesday on the New York Stock Exchange under the ticker symbol “SKYD.” Warner Bros. Discovery shares ceased trading on Nasdaq. The deal ends a year-long contest that included a rival Netflix bid, an antitrust lawsuit by 12 state attorneys general, a Writers Guild of America suit and protests from industry creatives.

“Today is a historic day, not just for Skydance but for our entire industry,” Ellison said in a statement. “From the start, our ambition was to bring these two storied studios together and create a stronger competitor, with the talent, resources, and reach to tell great stories in every genre, on every platform, for audiences everywhere.”

What the New Company Holds

The merger combines Paramount Pictures and Warner Bros. Pictures — both more than a century old — alongside streaming services Paramount+ and HBO Max, cable networks including CNN, CBS News, HBO, MTV, Comedy Central and Food Network, and a library of roughly 15,000 films. According to Variety, the new company projects annual revenue of nearly $70 billion.

The combined entity unites franchises from Harry Potter and the DC Universe to Mission: Impossible, Top Gun and The Godfather. Skydance said the Paramount+ and HBO Max direct-to-consumer products will be merged “into a single service over time.”

The consolidation folds two of the last five legacy Hollywood studios into one, leaving Disney, Universal Pictures and Sony Pictures as the other survivors.

A Year-Long Battle

The path to closing was anything but smooth. Warner Bros. Discovery formally opened a sale process in October 2025 after receiving “unsolicited interest” from multiple parties, drawing bids from Netflix, Comcast and Paramount. In December 2025, Netflix appeared to have won with a deal worth nearly $83 billion for the studio and HBO assets, prompting Paramount to launch a hostile all-cash tender offer.

The contest turned in Paramount’s favor on Feb. 24, 2026, when it raised its bid to $31 per share in cash. Two days later, Netflix declined to match the offer and withdrew, calling the deal “no longer financially attractive.” Paramount and Warner Bros. Discovery entered a definitive $110 billion merger agreement on Feb. 27, and WBD shareholders approved the sale in April, according to a CNBC timeline of the events.

Regulatory clearances followed: the Justice Department closed its investigation in June with no conditions, and the European Commission approved the deal in July after Paramount agreed to divest its stake in United International Pictures in Europe. The UK’s competition authority and Mexico’s regulator cleared the deal in August.

One high-profile casualty of the integration: Michael De Luca and Pamela Abdy, who ran Warner Bros. Pictures and celebrated Oscar wins last year for films including Sinners and One Battle After Another, are now out.

Antitrust Fight Ends in a Settlement

A looming legal obstacle was cleared on Sept. 21, when Paramount settled an antitrust lawsuit brought by 12 state attorneys general, led by California’s Rob Bonta. Under a five-year consent decree, the company agreed to behavioral remedies rather than structural divestitures, The Guardian reported.

According to NPR’s account of the settlement, the combined studios must release at least 30 films a year for two years and 32 films a year for the following three, or face a financial penalty, and spend an additional $300 million annually to make movies in the United States. The agreement also creates a board designed to shield CBS and CNN from corporate interference in newsroom decisions, and a trustee will monitor compliance.

“This settlement is not a vote of support for this merger; it’s not a blessing of the broader merger,” Bonta said when the settlement was announced. “Broadly speaking, we believe further consolidation in markets that are essential to American economic life doesn’t serve the American economy, consumers or competition well.”

Connecticut Attorney General William Tong said his state had sought full divestiture of CNN and CBS News. “I am deeply disappointed that we could not do more,” he said.

Concerns Over Debt and Influence

The new company carries roughly $80 billion in net debt. Skydance aims to reduce its ratio of net debt to adjusted EBITDA from about 7 times in 2026 and 2027 to a target of 3.0 times by the end of 2029, and is targeting more than $6 billion in annualized cost savings over three years. Mass layoffs are expected across both former companies.

The financial strain is already drawing scrutiny. Rating agency Fitch cut Skydance’s credit rating, citing “significant execution and integration risks” and higher leverage of 7.8 times in fiscal 2026, Deadline reported. The downgrade followed a similar move by S&P Global. A recent $42.5 billion bond sale will raise the company’s annual interest expense, with rates on some notes topping 9%.

“The combined company faces structural pressure on linear revenues, streaming competition and hit-driven content risk,” Fitch said.

The ownership structure is also drawing criticism. The Ellison family and RedBird Capital Partners hold 100% of the combined company’s voting shares, while a $47 billion equity investment was led in part by the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi. In September, the Federal Communications Commission approved up to 49.5% foreign ownership of the company, Ars Technica reported, with those funds planning to invest about $24 billion.

The FCC said the foreign investors would hold only non-voting shares and could not influence editorial decisions. Commissioner Anna Gomez, the commission’s lone Democrat, dissented, saying the investment “doesn’t just buy equity, it secures influence over what gets said and what gets made.”

Press Freedom Questions

Because David and Larry Ellison are allies of President Trump, critics have raised concerns about political interference at CNN and CBS News. Skydance acquired the right-leaning outlet The Free Press and installed its co-founder Bari Weiss as CBS News editor-in-chief.

“We’re concerned about the Ellison’s corrupting CNN,” Jessica Gonzalez, co-CEO of the nonprofit Free Press, told NPR. “They are willing to use their money and power to censor the news, to tear down stories that they or the president don’t like. We deserve better than billionaire oligarchs controlling our media system.”

CNN CEO Mark Thompson said Monday he would remain in his role, expressing “real confidence that they both understand and will fully support the principle and practice of the kind of independent news that CNN has always stood for.”

What to Watch

The closing caps one of the largest leveraged media transactions in corporate history and signals a new phase in Hollywood’s consolidation era, as legacy studios try to compete with technology-driven platforms. Whether Skydance can hit its deleveraging targets — and whether the behavioral remedies prove enforceable — will determine whether the deal becomes a template or a cautionary tale. In the meantime, thousands of employees at both former companies face an uncertain future.

Supporters, including RedBird Capital’s Gerry Cardinale, frame the bet as a necessary scale play. “By applying our owner-operator model to Paramount and WBD’s unmatched portfolio of iconic franchises, premium original programming, and live sports rights, we can protect that legacy while building for a media landscape that’s undergoing transformational change,” he said.