Paramount Closes $111 Billion Warner Bros. Discovery Takeover, Creating Skydance
Paramount’s $111 billion Warner Bros. Discovery takeover creates Skydance, combining HBO, CNN and three streamers under heavy debt despite scrutiny.
Summary
After unsolicited interest, Warner Bros. Discovery opened a sale in October 2025. Comcast and Paramount contended, but WBD chose Netflix’s December offer of $82.7 billion for its film, television and streaming assets. Netflix made the bid all-cash at $27.75 a share in January 2026. Paramount’s roughly $108 billion whole-company proposal was repeatedly rejected over its debt and backing from Saudi, Qatari and Abu Dhabi sovereign wealth funds, which WBD said could leave the combined business owing $87 billion. Paramount sued in January for Netflix-deal information, offered shareholders $0.25 a share quarterly if closing slipped beyond December 31, 2026, and volunteered Netflix’s $2.8 billion breakup fee. Its February increase to $31 a share reopened talks; Netflix co-CEOs Ted Sarandos and Greg Peters withdrew February 26, calling the matching price financially unattractive.
David Ellison’s final $111 billion offer covers WBD’s studios, HBO, games, streaming services, CNN, HGTV and other networks. Paramount assumes WBD’s approximately $33 billion debt, supported by $54 billion from Bank of America, Merrill Lynch, Citi and Apollo Global Management, plus $45.7 billion in equity from Larry Ellison, Oracle’s chairman, the world’s sixth-richest person and a major Donald Trump donor. David Ellison has warned of significant job cuts. Employees also fear political pressure after critical CBS News reporting faced scrutiny or shelving under Ellison and Bari Weiss; Trump previously secured a $16 million CBS settlement, pressured Netflix to remove Susan Rice and vowed to bring CNN to heel.
California attorney general Rob Bonta announced an investigation February 26 after 11 state attorneys general sought federal review; senators Elizabeth Warren, Bernie Sanders and Richard Blumenthal also warned of higher prices and reduced competition. The DOJ approved the merger in June, but Bonta and 11 other state attorneys general sued July 13, citing harm to theaters, cable distributors and viewers. U.S. District Judge Araceli Martínez-Olguín imposed a 14-day pause before approval in late September. The deal closed October 6, creating Skydance with nearly $70 billion in annual revenue; Paramount+, HBO Max and Discovery+ will eventually combine.
Positives
- The $111 billion acquisition closed October 6 after receiving DOJ approval in June and judicial approval in late September.
- Nearly $70 billion in annual revenue gives Skydance substantial scale across film, television, games, news, cable and streaming.
- Paramount+, HBO Max and Discovery+ are set to combine, consolidating the merged company’s streaming portfolio.
- $45.7 billion in Larry Ellison equity and $54 billion in debt commitments supplied financing for the acquisition.
- WBD shareholders secured $31 per share after Paramount improved its offer from roughly $108 billion.
Risks & concerns
- Approximately $33 billion of WBD debt transfers to Paramount, adding to the buyer’s existing multibillion-dollar obligations.
- WBD warned an earlier Paramount proposal could burden the combined company with $87 billion in debt.
- David Ellison has warned of significant job reductions, intensifying concerns about layoffs and lower wages.
- Twelve state attorneys general argued the merger could weaken competition and harm theaters, cable distributors and viewers.
- Employees fear political interference at CNN following scrutiny of critical CBS News reporting and Donald Trump’s public pressure.
- Combining Paramount+, HBO Max and Discovery+ could enable subscription price increases, a concern raised by lawmakers and state officials.