Paramount Skydance completed its $110 billion takeover of Warner Bros Discovery on Tuesday, creating a major Hollywood conglomerate and giving chief executive David Ellison control of one of the world’s largest entertainment and news businesses. The transaction combines the studios behind “Mission: Impossible”, “Harry Potter” and DC Studios with television and streaming operations including CBS, CNN, Paramount+ and HBO Max.
Ellison told employees that the enlarged company was intended to compete more aggressively in an industry transformed by streaming, technology and artificial intelligence. In a memo outlining his plans, he described the merger as an opportunity “to build the next-generation media and entertainment company, powered by creativity and technology”. The objective, he said, was not simply to become larger but “to take on the biggest players in our industry”.
The new company, called Skydance, brings together assets that were once part of a conglomerate controlled by the late Sumner Redstone. That business has contracted sharply over the years as audiences have increasingly shifted towards news and entertainment produced and distributed by smaller publishers and creators. Skydance now faces established entertainment rivals such as Netflix and Disney, as well as technology companies including Apple, Meta and Amazon, while artificial intelligence presents another growing challenge to traditional media businesses.
Ellison argued that established media companies had failed to adapt quickly enough. “They allowed Netflix to disrupt their business,” he told reporters on Tuesday. “They allowed Amazon Prime Video to come and disrupt their business. They didn’t transform, and they held on to the past for too long.” Shares of the combined company moved from Nasdaq to the New York Stock Exchange on Tuesday and began trading under the ticker “SKYD”.
The merger became possible after Paramount reached settlements with a coalition of US states and a Hollywood writers union, removing the principal legal barriers to one of the largest transactions in media history. The deal comes as Hollywood contends with declining cable-TV subscriptions, the high cost of competing for streaming audiences and continuing disputes with unions over jobs and the rights of creative workers.
The enlarged company also creates a significant political and editorial challenge because of its ownership of CNN and CBS News. President Donald Trump expressed approval of the transaction on Tuesday, calling it “a great company” and “a great merger”. His comments came after his administration had recently banned several news organisations, including CNN, from the White House. Trump has repeatedly attacked news organisations since his first term, while his fellow Republicans face narrow congressional majorities in the November 3 midterm elections.
CNN chief Mark Thompson and CBS News Editor-in-Chief Bari Weiss will retain their respective positions and will report separately to Ellison and co-chief executive Ynon Kreiz. The arrangement is intended to address concerns that Weiss, who became CBS News editor-in-chief in 2025, could gain authority over all of Skydance’s news operations. Those concerns have also been fuelled by lawmakers’ criticism of Ellison over allegations that Paramount-owned CBS News had tailored coverage to favour Trump. Under the settlement, Ellison agreed to establish an editorial independence board overseeing CNN and CBS, although experts have warned that the board could be “toothless”.
The transaction represents an extraordinary expansion for Skydance, which was founded in 2010 by Larry Ellison’s son and began as an independent studio. It built its reputation as a financial backer and producer of Paramount blockbusters including “Top Gun: Maverick”. After merging with Paramount last year, Skydance pursued Warner Bros in a competitive bidding process that included Netflix and attracted interest from other potential buyers, including Comcast. Warner Bros shareholders received an additional $41.9 million in a “ticking fee” based on the number of days between the end of September and the closing of the deal, according to a regulatory filing.
Ellison has appointed Kreiz, the former chief executive of Mattel, as co-CEO to oversee daily operations and integration, while retaining responsibility for creative direction and overall strategy. Former Activision Blizzard chief executive Bobby Kotick and Laurene Powell Jobs, founder of the Emerson Collective and publisher of the Atlantic, joined the board, while former UK Prime Minister Tony Blair will serve as an adviser.
The financial challenge is substantial. Skydance plans to achieve $6 billion in savings, including through the integration of technology and cloud providers, with Paramount saying a significant portion will come from “non-labor sources”. The scale of the reductions is nevertheless expected to affect jobs across Hollywood. The company also plans to combine HBO Max and Paramount+ into a single streaming service, release at least 30 films a year during each of its first two years after closing and increase that number to 32 annually for the following three years.
The combined company is expected to carry about $80 billion in debt, increasing pressure to expand streaming, maintain cash flow from cable networks and improve theatrical film performance. Ellison has pledged to spend at least $30 billion a year on content. MoffettNathanson forecasts core operating profit of $16 billion in 2028, rising to $19 billion in 2030, while revenue is projected at about $67 billion in 2028 and roughly $70 billion in 2030. Ellison’s annual base salary will be $5 million, with a target annual bonus of $5 million. Asked by Reuters how he intended to persuade a sceptical Hollywood, he said: “I understand why everyone felt the way that they did,” adding, “What was the alternative?”
