Paramount completes Warner Bros. Discovery takeover, forming Skydance

Mixed · 2On Wednesday 30 September, U.S. District Judge Araceli Martínez-Olguín approved Paramount's settlement with 12 states, led by California, that had sued to block its takeover of Warner Bros. Discovery. 1 2 Right · 2She called the consent decree a "fair, reasonable, and good faith approach" to the competitive harms alleged, and said objectors' hopes that it "reach farther" did not amount to legal violations that would justify rejecting it. 3 4 Mixed · 3Under the five-year decree, Paramount must release at least 30 films a year in U.S. theaters, spend an extra $300 million a year on U.S. production, negotiate cable carriage separately for the two companies' channels, and create an editorial board for CNN and CBS News. 5 3 2

Centre · 1Deadline noted that there were no structural remedies such as asset sales, which the states had initially sought. 1 Centre · 2California Attorney General Rob Bonta said the settlement was not a blessing of the merger; Paramount had reportedly threatened to leave California. 1 6 Mixed · 2Opponents, including the Block the Merger coalition, called the deal "toothless", and Sen. Elizabeth Warren criticised it; Sen. Cory Booker had asked for a more thorough review. 7 2

Mixed · 2Shortly after the ruling Paramount named Mattel CEO Ynon Kreiz co-CEO; he is to join on 5 October and run day-to-day operations while David Ellison stays chairman and CEO. 6 3 Centre · 2Paramount had listed 6 October as a tentative closing date, and the deal closed on that date; a ticking fee of about $7 million a day to Warner shareholders had begun accruing from 1 October if it had not closed. 8 9 Right · 2The deal's value is given as $110bn or $111bn by most outlets, while AP copy run by Breitbart says $81 billion. 3 7

Mixed · 2Concerns centre on CNN, given the Ellison family's ties to President Trump; it remains to be seen how the editorial board will be implemented. 4 5 Centre · 1Paramount board member Gerry Cardinale, a principal architect of the deal, said at Bloomberg's Screentime conference on Thursday 1 October that most of the $6bn in promised cost savings would come from non-labour spending such as unified streaming technology and real estate, though he acknowledged "labor-related cost rationalization" in any challenged industry. 10 Mixed · 2Critics expect substantial job losses: IndieWire's commentary said it was "safe to say thousands of people will lose their jobs", and Deadline noted that independent analyses have projected a similar outcome. 11 10

Centre · 1Cardinale also said the notion that David Ellison is cosy with Donald Trump is "way overstated", arguing that any corporate leader should have a relationship with a pro-business administration; Deadline listed Ellison's Mar-a-Lago visit, the $16 million settlement of Trump's suit against CBS News, and Bari Weiss's installation as CBS News editor-in-chief as context. 12 Left · 2Actor Mark Ruffalo, one of many celebrities who campaigned against the deal, said on X that it "will stifle creativity, weaken free speech, and cost people their jobs" and that the movement "isn't going to fade away"; Paramount had earlier rebuked him over a post about Oracle's ties to the Israeli military. Tom Cruise and James Cameron have backed the deal. 13 11 Left · 1The judge wrote that the decree includes backstops requiring divestment of studios and cable channels if the combined company fails to comply, with a $30 million per-film penalty for missing the annual quota and divestiture of Paramount's Miramax stake possible; the decree requires 30 films a year for two years and 32 for the following three. 13

Centre · 3Leadership changes followed: Cindy Holland, Paramount's head of streaming, departed, and HBO's Casey Bloys is widely presumed to take over streaming for both companies; Puck reported that DC Studios co-heads James Gunn and Peter Safran will be invited to stay "at least initially", with their contracts expiring in 2027. The A.V. Club reported Paramount is reportedly looking to Elon Musk for cash to help with the merger's debt. 14 15 16 Left · 1On Friday 2 October David Ellison unveiled Skydance as the name of the combined company, and the Hollywood Reporter, citing several insiders, said DC Studios heads James Gunn and Peter Safran met Ellison on 1 October and were asked to stay, while Warner film chiefs Pam Abdy and Michael De Luca are being shown the door and Paramount's Josh Greenstein and Dana Goldberg are expected to oversee both film studios. 17 Left · 1On 5 October, the eve of the scheduled 6 October close, Warner Bros. Discovery CEO David Zaslav sent employees a three-minute farewell video; Variety noted he is set to receive a golden parachute of at least $550 million on closing and that the new company will carry even more debt. 18

Left · 1The Independent reported that HBO host John Oliver, whose contract was renewed through 2027, did not address the takeover on his 4 October show despite speculation about Last Week Tonight's future and concern that Ellison will make sweeping job cuts at CNN and HBO. 19 Right · 1Before the ruling, Sen. Cory Booker had urged the court to require an explanatory statement and consider an independent economic expert; Paramount and the 12 attorneys general defended the settlement, including its five-year term, in response. 20 Mixed · 2On Tuesday 6 October Paramount Skydance closed its takeover of Warner Bros. Discovery, creating a combined company named Skydance Corp. that began trading on the NYSE under the ticker SKYD, with Warner shareholders receiving just over $31 per share in cash. 21 9

Mixed · 2David Ellison, chairman and CEO, said "Today is a historic day, not just for Skydance but for our entire industry"; Ynon Kreiz runs day-to-day operations as co-CEO while Ellison keeps the creative vision and talent relationships. 8 22 Mixed · 2The value is reported as about $81 billion in equity, or nearly $111 billion including Warner's debt; outlets including CNA, The Verge and NBC News say $110 billion. 9 23 Left · 1In a "Day 1" memo, Ellison and Kreiz acknowledged that "integrating two companies will bring change, including difficult decisions that affect our workforce"; the company has not said how many jobs will go, but a Los Angeles County report in August projected about 4,500 film and TV jobs lost in L.A. over three years, and the firm targets at least $6bn in annual savings within three years. 24

Centre · 1Bloomberg noted the company must manage nearly $80 billion in debt, with higher interest costs than a few months earlier, while meeting the settlement's theatrical-release schedule; Paramount sold $52 billion of loans and bonds in about a week. 8 Centre · 1Under the settlement Paramount must keep films in theatres for 45 days; Mark Thompson stays CNN chief executive and Bari Weiss remains CBS News editor-in-chief. Skydance's new team puts Dana Goldberg and Josh Greenstein over film, Casey Bloys over streaming, George Cheeks over a new TV division, and keeps James Gunn and Peter Safran at DC Studios. 8 Mixed · 2HBO Max and Paramount+ will "unify into a single service over time", with no timing or name given; Warner's David Zaslav leaves with potentially more than $667 million in severance and stock awards, according to Bloomberg. 25 8

Right · 1A last-minute emergency appeal by five consumers to the Supreme Court was denied by Justice Elena Kagan on Monday 5 October without explanation, according to the Washington Examiner. 21 Right · 1AP noted that Saudi Arabia, Qatar and the UAE helped back the deal, with the FCC allowing up to 100% indirect non-voting foreign ownership of Skydance, which FCC Democrat Anna Gomez and other critics called alarming; critics also doubt the new News Editorial Independence Board will have much effect because Ellison has ample oversight over appointments. 23 Centre · 1Shares fell about 3% on the first day of trading under the new ticker SKYD, closing at $9.51, and Fitch cut the company's credit rating on Tuesday, citing its debt of about $80 billion (leverage approaching seven times EBITDA) and what it called "structural pressure on linear revenues, streaming competition and hit-driven content risk". 26

Mixed · 2Gerry Cardinale, who has put $4 billion into Skydance, has said he is "all in" on the deal; Bank of America analyst Jessica Reif Ehrlich wrote that the promised $6bn in savings would help profitability and deleveraging over time but that realising synergies of that size "is rarely linear". 26 27 Left · 1President Trump, asked about the closing on the White House lawn on Tuesday, said "That's a great merger. I'm glad they let it go" and called the Ellisons "terrific people"; Variety noted his Justice Department cleared the deal in June without conditions, and that a July shareholder suit alleging a secret deal with Trump over CNN was answered by a Paramount spokesperson saying no commitments on CNN had been made to any government body. 28 Mixed · 2At a press event on the Paramount lot on Tuesday afternoon, Ellison said the company would keep both studio lots and would "probably" organise film on one and television/streaming on the other; the settlement requires both lots to be kept for at least five years, and Deadline's sources suggest film would sit at Paramount and TV/streaming at Warner Bros. in Burbank. 29 30

Mixed · 2Co-CEO Ynon Kreiz said the three TV studios (Warner Bros. TV, CBS Studios and Paramount TV Studios) will stay separate under George Cheeks for now: "We're not looking to reduce output production." He said Kreiz will focus on operations and integration, while Ellison focuses on creative technology and long-term strategy, and that the plan is to "keep the studios independent creatively" while coordinating a 35-film first-year release slate. 31 29 Left · 1Pressed on his Washington ties, Ellison said "we have not talked to any political leader of any party about news", and that his trips to D.C. concerned a federal production tax incentive; Skydance also said it has no plans to divest its roughly 50 cable networks. 29