Hollywood has a new giant, and Netflix isn't part of it. Paramount closed its $110 billion takeover of Warner Bros. Discovery on Tuesday, creating a combined entertainment behemoth called Skydance — after beating out Netflix in one of the most heated bidding wars the industry has ever seen.
Reuters reported that Paramount completed the blockbuster deal on Tuesday, handing CEO David Ellison control of one of the world's largest entertainment companies. Shares of the combined company moved from the Nasdaq to the New York Stock Exchange, where they now trade under the ticker "SKYD."
The scale of what's now under one roof is staggering. The deal unites the studios behind Mission: Impossible, Harry Potter, and DC Studios with television and streaming assets including CBS, CNN, Paramount+, and HBO Max. Together, the two streaming services count more than 200 million subscribers, instantly making Skydance one of the most powerful players in the streaming wars.
The Netflix angle is the sting in the story. Netflix had previously reached an agreement to buy Warner Bros.' film and television studios and streaming business, and for a stretch it looked like the streamer would walk away with the prize. Paramount announced its rival bid in February, sweetened the offer, and agreed to cover the breakup fee Warner Bros. owed Netflix for walking away from its deal. Comcast circled the asset as well, but Ellison won out.
Ellison, the son of Oracle co-founder Larry Ellison, has pulled off a remarkable 16-year rise. He founded Skydance in 2010 as an independent studio, built its reputation backing and producing Paramount's Top Gun: Maverick, merged it with Paramount just last year, and has now swallowed Warner Bros. Discovery whole. He'll run the combined company alongside newly named co-CEO Ynon Kreiz, formerly of Mattel, while Warner Bros. Discovery chief David Zaslav is expected to depart.
The Skydance name itself was a deliberate choice. Ellison announced on October 2 that the combined company would take his original studio's name rather than mashing the two legacy brands together, saying it would let Paramount and Warner Bros. keep their individual identities. Analysts read it differently — as a statement of just how completely Hollywood's most iconic brands now answer to him.
Getting here wasn't easy. The merger faced an antitrust lawsuit from a coalition of 12 state attorneys general and opposition from a Hollywood writers union, both cleared through settlements. As part of the deal, Ellison pledged an additional $1.5 billion in domestic production spending over five years and committed to releasing 30 high-quality theatrical films per year.
But the celebration comes with a warning. Executives are targeting $6 billion in cost savings over three years, and a memo to employees on Tuesday morning gestured at layoffs ahead, describing "difficult decisions that affect our workforce." With net debt estimated above $80 billion, the pressure to deliver those savings will be intense — and staffers, including at CNN, are already bracing for cuts.
For viewers, the biggest question is what happens to Paramount+ and HBO Max now that they share an owner, and what the new regime means for DC Studios' future. For Hollywood, the message is simpler: the consolidation era just produced its largest prize yet, and its name is Skydance.
Source: Reuters
