Paramount completes Warner Bros. deal to create Skydance

Paramount Skydance has officially closed its US$110 billion acquisition of Warner Bros. Discovery.

With the completion of this deal, the two Hollywood giants will now operate as one massive studio known simply as Skydance. David Ellison, who served as Paramount Skydance CEO, will lead the newly formed Skydance.

As part of this deal, Skydance now owns major streaming services Paramount+ and HBO Max, news networks CNN and CBS, and franchises like Harry Potter, DC Comics, Star Trek and Mission: Impossible, among other big properties. This consolidation also leaves Hollywood with even fewer major studios. There used to be the “Big Six” (Paramount, Warner Bros., Disney, Sony, Fox and Universal), but now there’s only Skydance, Disney (which has owned Fox since 2019), Sony and Universal.

 

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Naturally, that kind of consolidation presented many concerns, but Paramount Skydance ultimately made concessions to resolve multiple state antitrust lawsuits. These include separation of the studios for a period of time, guardrails surrounding the editorial independence of both Warner’s CNN and Paramount’s CBS, and financial penalties linked to CEO David Ellison’s commitment to 30 movies per year.

Still, there’s much more apprehension surrounding the new Skydance, and not just because it’s now saddled with US$80 billion in debt that will undoubtedly result in mass layoffs. In particular, there are worries about the fact that David Ellison has close ties to Donald Trump, and we’ve already seen examples of the U.S. president influencing the family, including with the planned Rush Hour 4. Foreign investors, including the Saudis, also own roughly 50 per cent of a merged Paramount-WBD.

It also remains to be seen how this will affect the streaming and gaming businesses. Ellison has confirmed plans to merge Paramount+ and HBO Max, although that won’t happen just yet. Of course, HBO Max isn’t in many countries, including Canada, where most of the streamer’s content is licensed to Bell’s Crave. Earlier this year, Bell said Warner Bros. titles will remain on Crave “for the foreseeable future,” but it’s unclear just how long that will be. Presumably, Skydance would take its content back for its own services once that Bell deal expires.

And on the gaming side, Skydance now owns Warner Bros. Games, a sizeable publisher that’s behind hit games like the Mortal Kombat series and Hogwarts Legacy. It’s worth noting that Paramount Skydance actually started a gaming division in June, which is working on a AAA TMNT game, the long-gestating Marvel 1943 from Uncharted creator Amy Hennig and an untitled Star Wars game with Lucasfilm.

Interestingly, Paramount said in June that gaming is a “core pillar” for the company, but it didn’t mention this business in its press release confirming the closure of the Warner Bros. Discovery deal. Therefore, it’s unclear whether Skydance has plans to either consolidate Warner Bros. and Paramount’s existing game studios or simply have them operate independently.