Paramount Skydance completed its $111 billion acquisition of Warner Bros. Discovery on Tuesday, merging two of Hollywood's oldest studios and their television and streaming businesses into a single company called Skydance, after a last attempt to block the deal was turned away by the Supreme Court a day earlier.
The combined company brings together Paramount Pictures and Warner Bros., the streaming services Paramount+ and HBO Max, broadcast and cable networks including CBS and CNN, and a sports portfolio spanning CBS Sports and TNT Sports, according to a regulatory filing announcing the deal's close. The new corporate parent sits above both studios, which keep their individual names and brands.
Clearing the last legal hurdles
The merger's path to completion ran through a federal antitrust lawsuit filed by California and 11 other states, which argued the deal would substantially reduce competition. In July, US District Judge Araceli Martínez-Olguín agreed the combination likely violated antitrust law, but California settled the suit last month, and the judge approved that settlement on September 30 over objections from free speech and media advocacy groups who said it gave residents of the suing states "virtually nothing." A separate challenge brought by five consumers reached the Supreme Court this week as an emergency application; Justice Elena Kagan, who handles emergency matters for the Ninth Circuit, denied it Monday without comment, clearing the way for Tuesday's close, as court filings reviewed by Ars Technica show.
The Justice Department approved the merger in June, a decision that reportedly surprised staff attorneys who had favored suing to block it. In September, the Federal Communications Commission signed off on Paramount financing part of the deal by selling non-voting equity stakes to sovereign wealth funds in Saudi Arabia, the United Arab Emirates and Qatar. The settlement with California also requires Skydance to set up an editorial independence board overseeing CBS News and CNN, whose current leaders, Bari Weiss and Mark Thompson, keep their roles.
The numbers behind Skydance
Warner Bros. Discovery shareholders received $31.02 per share in cash. The combined company reports close to $70 billion in trailing annual revenue, more than $30 billion in content spending, and a target of upwards of $6 billion in run-rate cost savings over three years, built around three divisions covering studios, direct-to-consumer streaming and television media that together reach more than 200 million streaming subscribers. Skydance is targeting more than $10 billion in free cash flow by 2030 and has committed to releasing at least 30 theatrical films and 180 television shows annually. Reuters has reported the merged company is carrying roughly $80 billion in debt, a load that will press chief executive David Ellison to grow streaming revenue while protecting cash flow from cable networks that are shrinking as traditional pay-TV declines.
Ellison, who becomes chairman and chief executive, framed the new name as an attempt to avoid overshadowing either legacy studio:
We never wanted a new corporate identity to diminish, alter or overshadow either one. Instead, we wanted a name that would give the combined company an identity of its own while allowing Paramount and Warner Bros. — and all our extraordinary brands — to remain in the spotlight.
David Ellison, Chairman and CEO, Skydance
Gerry Cardinale, founder of RedBird Capital Partners, which backed Ellison's original bid for Paramount, called the close "a defining moment for the industry," arguing the deal applies an owner-operator model to legacy media as it adapts to streaming competition and AI-driven changes in how audiences find and watch content. The Ellison family and RedBird hold all of Skydance's voting shares; the sovereign funds hold none.
Integration will test whether Ellison can wring billions in savings from overlapping film, television and news operations without further damaging journalism at CBS News and CNN, which media advocates fear could face pressure despite the new oversight board — Ellison has reportedly told Trump administration officials he intends to make changes at CNN, long a target of the president's criticism. Wall Street will also watch how quickly Skydance can pay down its debt load while continuing to invest in Paramount+ and HBO Max against Netflix, Disney and Amazon, and whether regulators revisit the deal if the promised film and cable-carriage commitments go unmet.
