The $110 billion merger of Paramount Skydance and Warner Bros. Discovery has officially closed, combining two century-old entertainment businesses and putting a vast collection of film, television, and news properties under the same corporate umbrella.
The combined company, known as Skydance, officially began operations on Tuesday, after Supreme Court Justice Elena Kagan denied a last-minute effort to halt the deal.
Warner Bros. Discovery shareholders received $31 per share in cash under the final agreement, valuing the company at about $81 billion in equity and roughly $110 billion on an enterprise-value basis, which includes debt.
“The completed transaction unites two of media and entertainment’s most storied companies, each with a history spanning more than a century, giving the combined business a rare legacy to build on,” Skydance said in announcing the closing.
“The aim of the combined company is to build the next-generation global media and entertainment company powered by creativity and technology.”
Paramount CEO David Ellison will serve as chairman and chief executive of the new company. Former Mattel CEO Ynon Kreiz, who stepped down from the toymaker last week, has been named co-CEO and will oversee daily operations and the integration of the two businesses.
Bari Weiss, editor-in-chief of CBS News, and Mark Thompson, chairman and editor-in-chief of CNN, will remain in their respective positions. Both were also named to the CEO’s News Executive Leadership Team.
Paramount Chief Financial Officer Dennis Cinelli will continue in the same role at Skydance.
Meanwhile, Michael De Luca and Pamela Abdy, who had led Warner Bros. Pictures, were not included in the newly announced senior leadership team.
The merger brings together two of Hollywood’s largest film and television operations and creates a larger competitor to streaming leaders such as Netflix and Disney.
HBO Max and Paramount+ will now operate under the same corporate owner, although Skydance has not announced immediate plans to combine the two streaming services.
The company’s collection of film and television franchises ranges from “The Wire,” “Game of Thrones,” and DC Comics to “Harry Potter,” “Mission: Impossible,” and “SpongeBob SquarePants.”
Its broader portfolio includes CBS, CBS News, CBS Sports, CNN, HBO, TNT, TBS, Discovery, HGTV, Food Network, Nickelodeon, Cartoon Network, MTV, BET, Comedy Central, and Showtime, among other properties.
Skydance said its content now reaches audiences in more than 200 countries and territories. The combined company plans to produce at least 30 theatrical films and more than 180 television shows and series each year.
Long Road to Closing
The merger closed seven months after Paramount prevailed in a bidding battle for Warner Bros. Discovery that included Netflix. The deal then faced regulatory scrutiny and legal challenges before reaching the finish line.
A group of 12 states sued to block the merger on antitrust grounds, arguing that combining two major Hollywood studios could reduce competition, weaken employees’ bargaining power, and diminish the variety of films and television programs available to consumers.
A federal judge approved a settlement with the states only days before the scheduled closing.
Under the agreement, Skydance committed to increase U.S. production spending by about $1.5 billion over five years and release at least 30 theatrical films annually. It also agreed to provide $47.5 million in assistance for affected workers.
The company must ensure that at least 20 percent of its film production takes place in the United States during the first two years following the merger. That share is required to rise above 30 percent during the following three years.
Skydance also agreed to establish an editorial-independence board covering CBS News and CNN, two of the country’s most prominent television news organizations.
The Writers Guild of America had separately challenged the merger, arguing that creating a new media conglomerate would further concentrate the market for writers of theatrical films and episodic television programs and could weaken their bargaining power.
The union ultimately reached a settlement resolving its challenge. Among the commitments, Paramount agreed to prohibit layoffs of writers at CBS News Broadcast for five years.
The legal challenges continued almost until the moment the transaction closed.
On Oct. 5, four petitioners who identified themselves as Paramount customers asked the Supreme Court to intervene, arguing that the merger remained anticompetitive despite the earlier settlements.
Justice Kagan, who handles emergency applications arising from the federal circuit covering the case, denied the request without comment, clearing away the final legal obstacle before the merger’s scheduled closing.
