Inside Hollywood's biggest plot twist: How Paramount closed $110 billion Warner Bros deal to create Skydance

Paramount Skydance on Tuesday completed its $110 billion takeover of Warner Bros Discovery, ending a 10-month fight that drew in Netflix, 12 US states, Hollywood's biggest names and, at the last minute, the US Supreme Court.

The merged company is now called Skydance. Its shares began trading on the New York Stock Exchange under the ticker "SKYD" on Tuesday, while Warner Bros Discovery shares stopped trading on Nasdaq. The company said Warner shareholders received just over $31 per share in cash.

Also read: Paramount closes $110 billion mega Warner Bros takeover; creates Hollywood powerhouse Skydance


Skydance now owns the Paramount and Warner Bros film studios, HBO Max, Paramount+, CBS and CNN, along with a large set of cable channels. The company said it has more than 200 million streaming subscribers and nearly $70 billion in revenue. It is led by chairman and CEO David Ellison, with former Mattel chief Ynon Kreiz as co-CEO.

Netflix, then Paramount

The story began when Warner Bros Discovery opened the door to a sale. In December, it agreed to sell its studio and streaming businesses to Netflix. Within days, Paramount made a hostile bid for the whole company, including CNN and the Discovery networks.

Over the next few months, the two bidders traded claims on who had the better offer. Warner's board stood by Netflix at first. That changed when Paramount offered $31 per share for all of Warner. The board called it the superior bid, Netflix walked away on February 26, and Warner signed the merger agreement with Paramount the next day.

Hollywood and Washington take sides

In April, thousands of actors, writers and directors signed an open letter against the deal, including Jane Fonda, Mark Ruffalo, Denis Villeneuve and J.J. Abrams. They warned of fewer jobs and less choice for viewers. Others backed Ellison, including director James Cameron.

CNN also became part of the political debate. According to an Associated Press timeline, President Donald Trump said in December that CNN should be sold. In March, Defence Secretary Pete Hegseth said the sooner Ellison took over the network, the better. AP also reported that Ellison attended a UFC event on the White House lawn in June for Trump's 80th birthday, two days after the US Justice Department said it would not step in.

Ellison has said CNN will keep its editorial independence. CNN chief Mark Thompson and CBS News editor-in-chief Bari Weiss are staying in their roles.

Money from the Gulf

The deal was funded in part by investors from the Gulf. Skydance said the $47 billion of new equity came from the Ellison family, RedBird Capital, Saudi Arabia's Public Investment Fund, the Qatar Investment Authority and others.

AP reported that the US Federal Communications Commission allowed foreign investors to hold up to 100% of the company's indirect equity, without voting rights. The commission's only Democratic member, Anna Gomez, called the move alarming and unprecedented. The company said the Ellison family and RedBird hold all of its voting shares.

Courts and states step in

Regulators in nearly 70 jurisdictions cleared the deal, including the US Justice Department, and Paramount said on August 14 that all required approvals were in hand. Twelve Democratic state attorneys general, led by California's Rob Bonta, still sued on July 13. A federal judge then ordered a halt on July 20, just as the companies were preparing to close. The Writers Guild of America filed its own suit.

Paramount settled with the states on September 21. On September 30, Judge Araceli Martínez-Olguín approved the settlement, calling it a fair, reasonable and good-faith way to address the harms the states had raised. Its main terms are:

• At least 30 films a year in theatres for the first two years, rising to 32 a year for the next three.
• A 45-day theatrical window for each film.
• Separate negotiations for Paramount's and Warner's basic cable channels.
• A new editorial independence board for CNN and CBS News.

The Writers Guild also settled with Paramount last week. Critics said the settlement terms were too weak, and Colorado and Washington did not sign the editorial board terms, according to AP.

Also read: Paramount rolls out $44 billion bond sale to fund Warner Bros. takeover

The last challenge came on Monday, when four petitioners who described themselves as Paramount customers asked the US Supreme Court to stop the deal. Justice Elena Kagan denied the request without comment.

What happens next

Skydance has set a target of at least $6 billion in annual savings within three years, mainly from technology, marketing, procurement and real estate. It has also said its streaming services will merge into a single service over time. The company expects the integration to affect jobs across Hollywood.

It aims to bring its debt down to three times earnings by the end of 2029 and to generate more than $10 billion in free cash flow by 2030. Ellison will set long-term strategy, while Kreiz will handle daily operations and the integration of the two companies.