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Paramount Skydance has completed its $110 billion takeover of Warner Bros Discovery, combining two of Hollywood’s biggest entertainment companies in a deal set to reshape the global film and television industry.
The acquisition brings Warner Bros, HBO, CNN, CBS, Nickelodeon, Showtime, Comedy Central, DC Studios and Food Network under the combined company, according to the BBC.
The company will operate under the name Skydance Corporation, with Skydance Chairman and CEO David Ellison leading the group alongside Ynon Kreiz, the former Mattel CEO who has been appointed co-CEO.
Paramount completes Warner Bros Discovery takeover
The deal follows months of negotiations, legal challenges and a bidding contest involving Netflix, while also raising questions about competition, consumer prices and editorial independence at CNN and CBS.
Ellison said the completion of the transaction marked a significant moment for the entertainment industry.
- “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. Now that ambition is a reality,” he said.
Kreiz will oversee day-to-day operations and the integration of the two businesses, while Ellison will focus on strategy and technology.
Merger brings major entertainment franchises together
The merger gives Paramount ownership of major film and television franchises, including Harry Potter, Game of Thrones, The Lord of the Rings and Mission: Impossible.
The enlarged group will also control Warner Bros’ extensive film and television catalogue alongside Paramount’s existing entertainment assets.
Netflix initially reached an agreement to acquire part of Warner Bros Discovery before Paramount Skydance entered the process and triggered a bidding war that eventually resulted in Netflix walking away.
US states challenged the takeover
The takeover faced opposition from lawyers from about a dozen US states, led by California, who argued that the transaction could reduce competition, increase consumer prices and harm movie theatres, cable distributors and audiences.
The legal challenge was resolved through a settlement announced last month, clearing the way for the merger.
Paramount said it had received unanimous approval from competition authorities across the world.
Under the settlement, Paramount will establish a news editorial independence board tasked with ensuring independent, objective and fact-based reporting at CNN and CBS.
New production requirements for Paramount
The settlement also includes conditions requiring the merged company to maintain a minimum level of film production and employment in the US.
Paramount must release at least 30 films annually under the agreement, with restrictions intended to prevent the company from meeting the quota through low-budget or automated productions.
The agreement also includes safeguards against the use of AI-generated films to satisfy the production requirements.
If Paramount fails to meet its annual film production quota, it would be required to sell its 49% stake in Miramax, the film company founded by Harvey Weinstein and his brother Bob Weinstein.
Paramount must also ensure that at least 20% of its film production takes place in the US during the first two years, rising to more than 30% over the following three years.
The race for Warner Bros Discovery
The completion of the merger follows a lengthy bidding contest for Warner Bros Discovery, with Paramount Skydance ultimately emerging ahead of Netflix in the race to acquire the company.
- Nairametrics reported in February that Netflix withdrew from the contest after declining to match Paramount Skydance’s $31-per-share offer, saying the economics of the deal were no longer attractive.
- The transaction also required significant financing. In April, Nairametrics reported that Paramount was in discussions to secure nearly $24 billion in equity commitments from Gulf sovereign wealth funds, including Saudi Arabia’s Public Investment Fund, Qatar Investment Authority and Abu Dhabi-based L’imad Holding.
Tencent was also reported to have considered investing several hundred million dollars in the transaction, although its earlier $1 billion commitment was withdrawn amid concerns over possible US national security scrutiny.
