Paramount Acquires Warner Bros. Discovery in Major Deal
On Tuesday, Paramount finalized its substantial $81 billion acquisition of Warner Bros. Discovery, creating a new entity called Skydance that unites some of the most iconic names in the entertainment industry.
This monumental agreement brings together Warner Bros., HBO, CNN, CBS, Paramount Pictures, HBO Max, and Paramount+, along with major franchises like “Harry Potter,” “Game of Thrones,” “Top Gun,” and “Mission: Impossible.” Considering debt, the total transaction value soared to nearly $111 billion. It all concluded after 12 Democratic state attorneys general filed a lawsuit in July to prevent the merger, temporarily halting the process before they settled with Paramount in September. This settlement required additional U.S. film production, worker assistance, and editorial safeguards specifically for CNN and CBS.
“We’ve come to a settlement with Paramount that includes enforceable measures to address the antitrust concerns at the heart of this case,” said Rob Bonta, a California attorney general. He emphasized that consistent film output, domestic production, and job protection were key concerns for those impacted by the merger.
Opposition to the merger surfaced from Hollywood actors and filmmakers alike, with thousands signing a letter in April against the deal. Notable actors such as Jane Fonda and Mark Ruffalo even called on regulators to intervene.
In June, the Department of Justice approved the transaction, deeming it unlikely to harm competition or American consumers. However, just a month later, the Democratic attorneys general filed their lawsuit, asserting that the merger could undermine competition in theatrical film distribution and cable services.
A federal judge initially halted the deal in July, before Paramount reached a September settlement with the states. As part of the agreement, Paramount committed to an additional investment of $1.5 billion in U.S. film production over five years and a promise to release a minimum of 30 films annually in theaters, while also implementing new editorial oversight for CNN and CBS.
David Ellison, founder of Skydance, will head the newly formed company with co-CEO Ynon Kreiz, further consolidating significant entertainment and news properties under one umbrella.
“Today marks a historic moment, not only for Skydance but for the industry as a whole,” Ellison stated enthusiastically. “We’re eager to get started.”
Ellison’s Skydance had merged with Paramount in August 2025 in a deal where he and RedBird Capital Partners invested over $8 billion to take control of Paramount and propel the creation of the new company. Soon after, he shifted his focus towards acquiring Warner Bros. Discovery.
As part of the deal, Paramount agreed to compensate Warner Bros. shareholders $31 per share, following a competitive bidding process that included Netflix. Initially, Warner Bros. favored a bid from Netflix before Paramount made a hostile takeover attempt, leading Netflix to eventually withdraw.
Interestingly, not all Democratic officials opposed the merger uniformly. A source close to New Jersey’s Governor Mikie Sherrill remarked on the surprising involvement of Pennsylvania Attorney General Jennifer Davenport in the lawsuit, describing it as perplexing, especially considering the potential jobs and investments at stake for their state.
The legal conflict also risked intensifying California’s ongoing entertainment industry challenges. Reports suggested that Ellison warned senior Paramount executives about the possibility of relocating the company if settlement negotiations did not proceed, indicating a desire to retain around 30,000 jobs in Southern California. Nonetheless, plans for a potential move to Nashville emerged amid looming costs associated with delays in finalizing the Warner Bros. deal.
This acquisition also positions Ellison in control of CNN— a network that has faced criticism from former President Donald Trump, who has previously suggested it should be sold. Ellison indicated that CNN would preserve its editorial independence under the leadership of its current editor-in-chief, Mark Thompson. The settlement also mandates establishing a News Editorial Independence Board for CNN and CBS.
Paramount financed the Warner Bros. acquisition with significant investments from financial backers in Saudi Arabia, Qatar, and the United Arab Emirates. Key investors included Saudi Arabia’s Public Investment Fund and the Qatar Investment Authority, among others. The Federal Communications Commission approved the indirect ownership interests of these foreign investors, who agreed to relinquish voting rights related to their investments.
