Paramount Completes $111 Billion Warner Bros. Discovery Merger, Forms Skydance

Paramount has completed its roughly $111 billion acquisition of Warner Bros. Discovery, creating a combined entertainment company called Skydance. The October 6 closing brings Warner Bros., Paramount Pictures, HBO, CNN, CBS and several major streaming services under one corporate owner, ending a lengthy bidding war and legal battle.

Led by David Ellison, the new company has nearly $70 billion in annual revenue. The merger also combines two historic Hollywood studios at a time when traditional television businesses face declining cable audiences, streaming competition and substantial debt obligations.

How Paramount Won the Warner Bros. Discovery Bidding War

The sale process began in October 2025, when Warner Bros. Discovery announced a review of strategic alternatives following unsolicited acquisition interest. Paramount quickly emerged as a leading contender, as Reuters reported, while Comcast and Netflix also pursued opportunities.

In December, Netflix secured Warner’s backing with an $82.7 billion offer focused on its studios and streaming operations. Paramount countered with a broader proposal valued at approximately $108 billion for the entire company, including its cable networks and other assets.

Warner’s board repeatedly rejected Paramount’s earlier proposals, citing concerns about financing, debt and transaction risks. Paramount later strengthened its offer by proposing a quarterly shareholder payment if closing was delayed beyond December 31, 2026, and committing to cover the $2.8 billion termination fee associated with Warner’s Netflix agreement.

The decisive change came in February, when Paramount raised its bid to $31 per share. Warner’s board determined that the revised proposal was superior, allowing Netflix to respond.

Netflix ultimately declined to raise its bid, saying matching Paramount’s price would make the acquisition financially unattractive. Its withdrawal cleared the way for Paramount to secure the agreement.

Financing the $111 Billion Paramount-Warner Merger

The acquisition leaves Skydance managing substantial debt alongside its expanded entertainment portfolio. Under the merger agreement, Paramount agreed to assume about $33 billion in Warner Bros. Discovery debt, with major lenders providing financing and Oracle co-founder Larry Ellison, David Ellison’s father, providing equity backing.

The financing included a $54 billion debt commitment and approximately $45.7 billion in equity support from Larry Ellison. Bloomberg examined the borrowing arrangements, including their mix of investment-grade and higher-risk debt.

Regulatory Opposition and the Court Settlement

The U.S. Department of Justice closed its antitrust investigation in June, concluding that the proposed combination was unlikely to harm competition across streaming, traditional television and theatrical film distribution. State authorities nevertheless continued to challenge the transaction.

Antitrust concerns had surrounded the sale from the start. A coalition of 11 state attorneys general previously asked the federal government to scrutinise Netflix’s proposed acquisition. At the same time, senators including Elizabeth Warren, Bernie Sanders and Richard Blumenthal raised concerns about competition and consumer prices.

California Attorney General Rob Bonta also warned that state regulators would review Paramount’s proposal. On July 13, California and 11 other states filed an antitrust lawsuit alleging the merger would reduce competition and harm movie theatres, television distributors, and consumers.

U.S. District Judge Araceli Martínez-Olguín subsequently temporarily halted the transaction. The legal dispute ended with a settlement the court approved in late September, allowing the acquisition to proceed.

What the Merger Means for CNN and Hollywood

Beyond competition concerns, Paramount’s ownership of CNN has attracted scrutiny over editorial independence. The Ellison family’s relationship with President Donald Trump has intensified questions about whether the new ownership could influence coverage at CNN and CBS News.

Those concerns follow Paramount’s $16 million settlement of Trump’s lawsuit involving CBS News, which preceded the Federal Communications Commission’s approval of Skydance’s earlier takeover of Paramount. Media commentators have also questioned the implications of the Ellisons’ ownership of CNN and CBS. These concerns do not establish that editorial interference will occur.

Employment remains another issue for the combined company. Ellison has acknowledged that job reductions are expected, while the financial demands of integrating the businesses have raised concerns among entertainment industry workers.

What Happens to HBO Max, Paramount+ and Discovery+?

Skydance now controls HBO Max, Paramount+, and Discovery+, along with major film libraries and television networks. The company plans to combine its streaming services, although it has not fully detailed h the precise structure, subscription pricing, or implementation timetable.

The October 6 closing resolves the ownership battle but begins the operational challenge of integrating studios, streaming platforms and television networks while managing substantial debt. For viewers and entertainment workers, the most consequential changes will depend on how Skydance reorganises its services, production operations and workforce.