Paramount Has Closed Its $110 Billion Warner Bros Merger To Form Skydance

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Paramount Skydance completed its acquisition of Warner Bros. Discovery on Tuesday, forming a single company called Skydance with annual revenue of close to $70 billion.

The transaction valued Warner Bros. Discovery at an enterprise value of about $110 billion, or $111 billion including assumed debt, a multiple of 7.5 times fully synergised 2026 EBITDA. Paramount issued $47 billion of new Class B shares at $16.02 to fund it, backed by a commitment from the Ellison Trust that Larry Ellison guaranteed personally, alongside RedBird Capital Partners, LionTree and the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi. The Ellison family holds the largest equity stake.

The combined company owns Paramount Pictures and Warner Bros. studios, the Paramount+ and HBO Max streaming services, and networks including CBS, CNN, MTV, TBS, Comedy Central and Food Network. Its franchises include The Lord of the Rings, Game of Thrones, Harry Potter, the DC Universe and Yellowstone.

Getting there took most of a year. Netflix had agreed to acquire Warner Bros.' streaming and studio businesses before Paramount's $31-a-share all-cash offer was declared superior in February. Twelve state attorneys general sued, arguing the deal would reduce competition and harm consumers and workers; a judge approved a settlement this week, and a separate settlement was reached with a Hollywood writers' union. Paramount also agreed to cover the break fee owed to Netflix and promised shareholders additional cash if closing slipped past a deadline.

David Ellison is chairman and chief executive. Former Mattel chief executive Ynon Kreiz joins as co-chief executive running day-to-day operations and integration, while Ellison oversees creative direction and strategy. Mark Thompson continues as CNN chief and Bari Weiss as CBS News editor-in-chief.

Skydance said most cost savings would come from technology, integration, procurement, marketing and real estate, and that its streaming products would unify into a single service over time.

The framing the buyers have chosen is worth examining, because it is not really a media argument.

Skydance's executives have described the goal as turning a studio into a technology company, with artificial intelligence as what Ellison has called a force multiplier. The investor Gerry Cardinale put it more bluntly: the only way Hollywood levels the playing field with Silicon Valley is to become more of a technology company itself.

That is a claim about cost structure. Studios lose money on the gap between what content costs to make and what audiences will pay for it, and streaming made that gap worse by removing the windows through which a film used to earn several times over. If AI genuinely reduces production and marketing costs, the economics change. If it does not, the merger is a conventional scale play dressed in newer language.

The financing makes the claim harder to dismiss as rhetoric. Larry Ellison, who built Oracle, personally guaranteed the equity commitment, and his family holds the largest stake. This is Silicon Valley money buying Hollywood rather than Hollywood borrowing to consolidate, and the people writing the cheque have spent their careers in businesses where software costs fall with scale.

Whether entertainment behaves that way is the open question. Cost per unit of compute falls predictably. Cost per hour of television that people actually want to watch has never done so.

The concentration in news is the part that will outlast the financial engineering.

One company now owns CNN and CBS News, two of the three major American television news divisions. That has no modern precedent, and the executives running them, Mark Thompson and Bari Weiss, both keep their jobs under a single owner whose largest shareholder is the family of Oracle's co-founder.

Twelve state attorneys general argued the merger would reduce competition. The settlement that cleared it addressed their objections on terms that have not been fully detailed, and the structural fact remains: editorial independence between two newsrooms is now a matter of internal policy rather than separate ownership.

For anyone outside the United States the more practical consequence is in streaming. Paramount+ and HBO Max merging into a single service removes a subscription from the market and creates a bundle with enough scale to negotiate differently with distributors, including in India, where both services reach audiences through partnerships rather than directly.

The synergy target rests on the same assumption. A 7.5 times EBITDA multiple on fully synergised earnings means the price already assumes the cost cuts happen. Skydance has pointed to exceeding synergy targets after the Paramount merger as evidence it can repeat the exercise at four times the scale.

What it has not explained is how technology makes a studio structurally cheaper to run. Hollywood's costs are talent, production and marketing. AI may compress some of the third and parts of the second. The first is the one that has defeated every previous attempt to industrialise the business.

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