After months of battling fellow bidders on Wall Street and state attorneys general in court, Paramount Skydance — the media conglomerate owned by tech scion David Ellison — has closed its $110 billion merger deal with Warner Bros. Discovery, creating a new megacorporation in Hollywood, streaming and news.
The new company, called simply Skydance, will house the Paramount and Warner Bros. film and TV studios, Paramount+ and HBO Max streaming services, and news giants CNN and CBS News.
Ellison will be the company’s chairman and CEO while Ynon Kreiz, formerly the top executive at Mattel, is co-CEO. The duo now helms one of the most powerful forces in American media.
CBS News will continue to be run by its editor in chief Bari Weiss — who has attracted controversy since being tapped to run the network last year. CNN CEO Mark Thompson said Monday that he is staying at the network as its chairman and editor in chief, a decision that has been seen as a sign of stability for the cable news giant.
The deal was challenged in federal court by a coalition of 12 Democratic state attorneys general led by California’s Rob Bonta. The group settled out of court with Paramount Skydance last month having extracted concessions: Paramount agreed to spend at least $300 million more per year on United States-based production and to make at least 30 movies in each of the next two years, followed by 32 movies in each of the three years after that. It also vowed to establish a board of journalists to ensure the editorial independence of CNN and CBS.
In a statement, Ellison said it was a “historic day, not just for Skydance but for our entire industry.” He added that his focus now is “building a company that empowers creatives, entertains audiences and rewards shareholders.”
Shares of the company began trading Tuesday on the New York Stock Exchange under the ticker symbol SKYD.
In a memo to staff obtained by The Washington Post, Ellison and Kreiz said that they chose the name Skydance for the corporate parent company but will maintain the Paramount and Warner Bros. studios, names and symbols — a mountain for Paramount, a shield for Warner Bros — that audiences have known for decades.
A bidding war
Paramount was never the intended buyer for Warner Bros. Discovery. The company chose to sell the bulk of its entities to Netflix in a deal that would have spun off cable channels including CNN. But Ellison was undeterred and waged a hostile campaign to court Warner Bros. shareholders by driving up the price of the deal. Netflix in February bowed out and Warner Bros. agreed to sell to Paramount.
To finance the acquisition, Skydance took on a huge amount of debt — $80 billion in total. The deal is being backed by a group that includes Ellison’s father, Oracle co-founder Larry Ellison, as well as the investment firm RedBird Capital Partners and sovereign wealth funds in Saudi Arabia, the United Arab Emirates and Qatar.
To pay off that debt, the company said Tuesday that it plans to make $6 billion in cuts within three years.
They face a considerable challenge recouping this investment in Hollywood and the media industry. For instance, Warner Bros.’ recent Tom Cruise-led film, “Digger,” bombed at the box office this weekend. The movie earned just $8 million over the weekend and could be on track to lose $150 million.
The credit agency Fitch Ratings on Tuesday downgraded bonds issued by Skydance citing “uncertainty about the company’s ability to achieve its stated synergies” and “materially higher leverage” following the merger.
Still, Skydance now controls a litany of valuable entertainment franchises including Harry Potter, Game of Thrones and Mission: Impossible that it could tap into to ease the financial strain.
David Ellison’s father Larry Ellison is a Republican donor whose close ties to President Donald Trump have fueled public speculation that Paramount’s deal to buy Warner Bros. received favorable antitrust treatment from the Justice Department, which approved it in June. Those ties have also intensified allegations that Weiss interfered with CBS News stories, including at “60 Minutes,” to appease the Trump administration — allegations CBS has fervently denied.
The deal also puts David Ellison in charge of a news property that’s angered Trump throughout his political career: CNN. Trump has repeatedly attacked and criticized the network’s coverage of him and its individual journalists.
In September, Trump banned CNN, along with Politico and MS NOW, from the White House grounds, saying the outlets had spent years pushing false stories about him. The three news organizations sued in federal court and won a temporary reprieve from the ban — though Trump has still barred CNN from riding with him on Air Force One.
correctionA previous version of this article incorrectly said that David Ellison waged a campaign to court Paramount shareholders. He courted Warner Bros. shareholders.
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