In a marriage of two massive Hollywood portfolios, Paramount’s $81 billion takeover of Warner Bros. Discovery closed Tuesday, uniting everything from cartoons featuring Bugs Bunny and SpongeBob Squarepants to news delivered by CNN's Anderson Cooper and CBS' Gayle King.
The resulting company, a behemoth now known as Skydance, reshapes the media world. Here’s what the deal may mean for streaming, movies, news and more:
Skydance brings Paramount together with HBO Max with plans to unify its streaming products "into a single service over time.” What this would be called and how it might affect consumer costs and choices remains unknown. David Ellison, the architect of the deal and the company’s CEO, has suggested HBO could still have some level of independence.
"Our viewpoint is, HBO should stay HBO,” Ellison said earlier this year. "They built a phenomenal brand, they are a leader in this space and we just want them to continue doing more of it. But by bringing the platforms together, all of our content will be able to reach even a broader audience than we can do standalone.”
Paramount also has acquired Warner’s smaller Discovery streamer, joining Paramount, Pluto TV and BET.
Critics have expressed skepticism about how consumers might benefit, warning that already rising subscription fees could spike as the conglomerate meets payments on the billions of dollars in debt Ellison took on to finance the deal.
What’s not in dispute is the size of the resulting library of content. Paramount and HBO Max alone add up to roughly 14% of the U.S. streaming market, comparable to rival Disney, but still behind Amazon Prime at 17% and Netflix at 19%, according to the streaming guide JustWatch. It pairs movie franchises like "Mission: Impossible” with "Lord of the Rings,” television hits from "I Love Lucy” to "Friends,” and personalities ranging from Guy Fieri to RuPaul.
Don’t expect a "Diners, Drive-Ins and Dives Drag Race” anytime soon, but with so many properties combining forces, there is potential for all kinds of crossover.
Paramount and Warner Bros. are two of Hollywood’s oldest studios. Their merger means fewer companies control legacy film production.
Under a settlement reached last month with 12 states, the combined company has agreed to distribute 30 films in theaters each year for the next two years — and 32 films each year for three years after that. The fine print notes that only 50% of those movies would have to be "produced or jointly produced” by the combined company. Skydance also agreed to increase spending on film production in the U.S. by at least $1.5 billion over the next five years.
Still, many have expressed worry about what further consolidation could mean for jobs and which projects are greenlit down the road. Regulatory filings have indicated that the new ownership will be looking for ways to cut costs — including layoffs and downsizing some overlapping operations.
Hollywood’s big six shrank to five when Disney bought most of 20th Century Fox in a deal finalized in 2019. Now it's a big four: Skydance, Disney, Universal and Sony.
The deal also puts news giants CNN and CBS under the same ownership, a concern among many journalists given the Ellison family's close relationship with President Donald Trump.
Trump, who has attacked the reporting of both networks as "fake news,” said Tuesday that he's happy the merger closed, and that Skydance is "going to be a great company.”
Foreign investors poised to hold sizable indirect ownership stakes are also in the spotlight. The FCC cleared Paramount’s request for sovereign funds from Saudi Arabia, Qatar and the United Arab Emirates (UAE) to indirectly own nearly 50% of the combined company’s equity interests, and potentially up to 100% through future investments, but no voting rights.
Ellison has said editorial independence will be maintained at CNN. The combined company is retaining Mark Thompson as CNN’s editor-in-chief, and has agreed to form a "News Editorial Independence Board.”
Skydance’s corporate board of directors will choose who sits on this new body.
