Paramount Closes $110 Billion Warner Bros. Discovery Takeover, Confirms HBO Max and Paramount+ Will Merge Into One App

Since Paramount first announced its intent to buy Warner Bros. Discovery on February 27, the deal survived a hostile Netflix counterbid, a multi-state antitrust lawsuit, and a Writers Guild challenge before closing Tuesday, October 6, under the new name Skydance, according to CBS News. The deal is valued at roughly $110 billion, or about $111 billion including the assumption of debt, according to Comic Basics and That Park Place.

The mechanics of the closing are now public. Warner Bros. Discovery shareholders received $31.01666668 per share in cash, WBD stock stopped trading on Nasdaq, and Skydance's Class B shares began trading Tuesday on the New York Stock Exchange under the ticker SKYD, according to That Park Place. David Ellison chairs and runs the combined company as CEO, with former Mattel chief executive Ynon Kreiz serving as co-CEO, CBS News reported.

The streaming merger is now confirmed, but the details aren't

Skydance confirmed in its closing press release that its direct-to-consumer products, now including HBO Max, Paramount+, Discovery+, and Pluto TV, "will unify into a single service over time," according to The Verge and Engadget. HBO CEO Casey Bloys will oversee that streaming operation as Co-Chair and Chief Content Officer of Skydance DTC, per Engadget.

That's as far as the company will go. No name for the merged app, no price, and no launch date have been announced, according to Screen Rant. Ellison told investors back in March that combining Paramount+ and HBO Max would create a platform with "a little over 200 million direct-to-consumer subscribers," a scale meant to compete with Netflix, which reported 325 million subscribers in January, The Verge noted.

Comic Basics reported that Bloys had more recently pointed to the Disney+ and Hulu bundle model when discussing the plan, and that Forbes characterized his comments as suggesting the two services would NOT be fully combined. Skydance's Tuesday statement, with its explicit "unify into a single service" language, represents a more aggressive version of that plan than Bloys himself had signaled days earlier. Which version wins is unresolved.

The company Skydance just built

The new entity is enormous by any measure. It brings together Paramount Pictures, Warner Bros., HBO, CBS, CNN, CBS Sports, TNT Sports, Nickelodeon, Cartoon Network, MTV, Food Network, BET, HGTV, Comedy Central, and Pluto TV, according to That Park Place, which cited Nielsen's Gauge data placing the combined company second only to YouTube in U.S. television time.

The balance sheet is just as large. Skydance says it expects nearly $70 billion in annual revenue, against about $80 billion in net debt, That Park Place reported. Ellison and Kreiz told employees in an email, cited by CBS News, that they're targeting $6 billion in cost savings, language that typically means layoffs. "Integrating two companies will bring change, including difficult decisions that affect our workforce," the co-CEOs wrote.

The settlement terms that made this possible

The deal only closed after Paramount settled two lawsuits: one from a coalition of 12 state attorneys general and one from the Writers Guild of America, both filed on antitrust grounds, CBS News reported. Under that settlement, Paramount agreed to produce 30 films in each of the first two years after closing and is barred from selling or closing the Paramount or Warner Bros. studio lots in Los Angeles for at least five years.

Paramount also agreed to establish an editorial board intended to "help CNN and CBS maintain editorial independence," according to California Attorney General Rob Bonta's office, as cited by CBS News. This is an unusual condition for state regulators to extract from a media merger, a government-brokered guarantee of editorial independence at two newsrooms now owned by the same corporation. Whether that board has real teeth or is symbolic hasn't been tested yet, because the merger is one day old.

Who actually owns Skydance

The $47 billion equity check that funded the deal was priced at $12 a share and led by Larry Ellison, RedBird Capital Partners, LionTree, and the sovereign wealth funds of Saudi Arabia, Qatar, and Abu Dhabi, according to That Park Place. Those foreign funds hold no Class A voting shares and have no control over the company, the outlet reported, a structural detail relevant given how much scrutiny foreign sovereign money typically draws in American media deals.

Voting control instead rests with the Ellison family and RedBird. Ellison called the closing "a historic day, not just for Skydance but for our entire industry," in a statement reported by multiple outlets including 9to5Mac and Comic Basics.

What remains unanswered: the name of the merged streaming app, its price for subscribers, and how much of the roughly $6 billion in targeted cost savings comes from job cuts rather than overlapping software licenses. Skydance has given itself no deadline to answer any of them.