Hollywood Shakeup: Paramount-Warner Bros. $111 Billion Merger Officially Closes!

It's official: Paramount and Warner Bros. Discovery have joined forces, now operating as a single entity named Skydance Corp., with David Ellison at the helm as chairman and CEO. This monumental deal, valued at $111 billion including the assumption of Warner Bros. Discovery's debt, unites two formidable studios, a vast array of television networks such as CBS, CNN, Comedy Central, MTV, and TBS, alongside their popular streaming platforms, Paramount+ and HBO Max.

The newly formed Skydance is projected to achieve annual revenues nearing $70 billion; however, it simultaneously grapples with a substantial net debt of $80 billion. The completion of this merger follows a little over a year after Ellison's Paramount Skydance – established in 2025 through Skydance Media's acquisition of Paramount Global – first initiated its bid for Warner Bros. Discovery.

David Ellison, 43, navigated numerous formidable obstacles en route to sealing the deal, including a competing Netflix offer for Warner Bros. assets and an antitrust lawsuit lodged by 12 Democratic attorneys general. Ultimately, he prevailed. The Ellison family, bolstered by the multibillion-dollar support of tech mogul Larry Ellison (David's father), holds the largest equity stake in Skydance. Together, the Ellisons and investment firm RedBird Capital Partners are the exclusive holders of Paramount Class A common stock, encompassing 100% of the combined company's voting shares. Skydance Class B shares began trading on the New York Stock Exchange under the new ticker symbol "SKYD" on Tuesday. Warner Bros. Discovery shareholders received $31.01666668 per share in cash, and WBD shares ceased trading on Nasdaq effective the same day.

In a statement, David Ellison declared, "Today is a historic day, not just for Skydance but for our entire 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…. Our focus now turns to the future: building a company that empowers creatives, entertains audiences and rewards shareholders." The merger's formation was backed by a $47 billion investment in Class B common stock, led by Larry Ellison, RedBird Capital Partners, LionTree, and the sovereign wealth funds of Saudi Arabia, Qatar, and Abu Dhabi, with equity priced at $12 per share. Debt financing was spearheaded by Bank of America, Citigroup, and Apollo Global Management. Ellison has appointed Ynon Kreiz, former CEO of Mattel, as co-CEO and announced the senior leadership team for the new Skydance on Monday.

Skydance has outlined its general strategy, promising "greater innovation from a company built with technology at its core." A significant move will be the gradual merger of its direct-to-consumer streaming products, Paramount+ and HBO Max, "into a single service over time." Echoing previous statements by Paramount executives, the new Skydance aims to achieve over $6 billion in annualized "run-rate synergies" within the next three years. These cost savings are anticipated to stem predominantly from technology, integration and procurement, marketing, and real estate rationalization. The company asserts that this approach will "make the company leaner and more nimble, freeing it to grow its investment in the stories, creators and technology that matter most" and will apply "the same operational playbook that allowed Paramount to exceed its synergy targets following the Skydance-Paramount merger."

However, some industry experts harbor skepticism regarding the feasibility of achieving such substantial cost reductions without incurring negative consequences on operations. Furthermore, the new Skydance is expected to implement mass layoffs, with thousands of employees from the former Paramount and Warner Bros. Discovery slated to be pink-slipped in the coming months. Financially, Skydance projects a reduction in its net debt to adjusted EBITDA ratio from an estimated 6-7x in 2026 to a target of 3.0x by the end of 2029. The deal's closing was delayed by an antitrust lawsuit, leading Paramount to accrue a ticking fee of approximately $7 million per day payable to WBD as of October 1, ultimately paying an additional $41.9 million to Warner Bros. Discovery investors.

Skydance is organized into three core business segments: Studios, Direct-to-Consumer, and TV Media. The company's expansive portfolio now unites iconic brands including Paramount Pictures, Warner Bros., HBO and HBO Max, Paramount+, Pluto TV, CBS, CNN, CBS Sports, TNT Sports, Nickelodeon, Cartoon Network, MTV, Food Network, BET, HGTV, and Comedy Central.