Paramount completes $110bn Warner Bros deal to create Skydance

Paramount has completed its $110 billion takeover of Warner Bros Discovery, creating a new entertainment giant called Skydance.

The deal, one of the biggest mergers of all time, brings together two of the major streaming services, Paramount+ and HBO Max, along with television networks including CBS, CNN, MTV, TBS, Comedy Central and Food Network.

Skydance also takes control of some of the most valuable franchises in entertainment, including The Lord of the Rings, Game of Thrones, the DC Universe of Superman and Batman, and Yellowstone. The company says the combined business will have annual revenue of nearly $70 billion.

The Ellison empire

The merger puts one of the world's largest film and television studios under the control of David Ellison. Only last year, he completed the merger of his company, Skydance Media, with Paramount.

The Ellison family is the new company's largest shareholder, backed by the fortune of Larry Ellison, David Ellison's father and the co-founder of the software company Oracle.

"Today is a historic day, not just for Skydance but for our entire industry," David Ellison said. "From the start, our ambition was to bring these two storied studios together and create a stronger competitor, with the talent, resources, and reach to tell great stories in every genre, on every platform, for audiences everywhere."

How the deal was won

Paramount announced in February that it would buy Warner Bros, after a bidding battle with Netflix. Netflix had previously agreed to buy Warner Bros' film and television studios and its streaming business, but not its cable channels.

Paramount sweetened its offer by promising shareholders extra cash if the deal failed to close by a set deadline, and by agreeing to pay the break-up fee Warner Bros owed Netflix for walking away from their agreement.

The final legal obstacles were cleared after settlements with a group of US states and with a Hollywood writers' union. Skydance shares began trading on the New York Stock Exchange on Tuesday under the ticker SKYD.

What it means for viewers

For now, Paramount+ and HBO Max continue as separate services. Media analysts expect the new owners to look at combining them, as streaming companies try to cut costs and offer bigger libraries to keep subscribers.

In the UK, HBO programmes such as House of the Dragon have long been shown through Sky and NOW under licensing deals, while Paramount+ is available as a standalone service and through other platforms. Any change to those arrangements would be likely to take time, as existing contracts run their course.

Why it matters

The merger continues a period of rapid consolidation in the entertainment business, as traditional studios try to compete with technology companies such as Netflix, Amazon and Apple, which have deep pockets and global reach.

Critics worry that fewer, larger companies will mean less choice for viewers and fewer opportunities for writers, actors and crews. The writers' union settlement that helped clear the deal was intended to address some of those concerns.

The deal also brings CNN, one of the world's best-known news channels, under the same ownership as CBS News, raising questions about the future of two major American newsrooms.