Paramount completes $110bn WBD merger

According to the company, Skydance now has the largest theatrical output in the industry, more than 200 million streaming subscribers across platforms, and a franchise portfolio spanning Top Gun and Harry Potter to White Lotus and SpongeBob SquarePants. Overall, it now has nearly $70bn in revenue and expects to generate more than $10bn in free cash flow by 2030.

Nevertheless, Paramount Studios and Warner Bros. Studios are targeting more than $6bn in "run-rate synergies" over the next three years. These cost savings will reportedly come from technology, integration and procurement, marketing and real estate rationalisation – freeing investment in the stories, creators, and technology while reducing net leverage to its 3.0x target by the end of 2029.

Ellison also recently revealed that the company will be named “Skydance”. According to Ellison’s X post, this decision was made to “give the combined company an identity of its own while allowing Paramount and Warner Bros… to remain in the spotlight.”

However, Reuters analysts have rejected the claim, instead asserting that the name “reinforces the extent of Ellison's control, highlighting how some of Hollywood's most iconic brands now answer to him and how he has a platform to impose his strategy and culture”.

The deal brings together Paramount Pictures, Warner Bros. Pictures, Paramount Television, Warner Bros. Television, CBS, CBS News, CBS Sports, CNN, HBO, HBO Max, TNT, TBS, Discovery, HGTV, Food Network, Nickelodeon, Cartoon Network, MTV, BET, Comedy Central, Showtime, Paramount+, Pluto TV, and Skydance Animation, Film, Television, Interactive/Games, and Paramount Sports Entertainment.

When making the announcement, Skydance stated: "[The] pro forma content spend of more than $30bn for the last 12-month period will be disciplined and strategic, prioritising audience reach and long-term value creation."

Looking to the future, Paramount Studios and Warner Bros. Studios will each reportedly produce a minimum of 15 high-quality feature films per year, for a total of at least 30 films annually across the group. Beyond this, each film is due to receive a full theatrical release, with a minimum 45-day window globally before becoming available on paid video-on-demand (VOD), with the intention of 60-90 days or more. Likewise, HBO will continue to operate independently under the new company’s ownership.

Skydance has also committed to continuing to support the independent production sector by commissioning content from independent studios and licensing its own content to third parties, creating more opportunities and more jobs for creatives, both in front of and behind the camera.

The consolidation follows Paramount Skydance’s settlement with 12 other US states, regulatory scrutiny from nearly 70 jurisdictions worldwide, and heated competition from Netflix.

Reuters also found that the combined company is also expected to carry about $80bn in debt, and Ellison's annual base salary will be $5m, ​with a target annual bonus of $5m.

To lead Ellison's new organisation, Ynon Kreiz, CEO, Mattel, will become Co-CEO and focus on the day-to-day management and integration of the combined businesses, while Ellison will focus on the company's long-term strategy, creative vision and direction, including its talent relationships, strategic partnerships, technology and capital allocation. The pair will be supported by a new CEO Leadership Team (CLT), which includes Andy Gordon, Casey Bloys, Mark Thompson, and Bari Weiss.

David Ellison, Chairman, CEO, Skydance, said: "Today is a historic day, not just for Skydance but for our entire industry. 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. Now that ambition is a reality. We're grateful to everyone who made this possible – the employees, creative talent, and production teams of both companies, who worked tirelessly to get us here and inspire audiences around the world every day, as well as the advisors and partners who guided this transaction to completion. Our focus now turns to the future: building a company that empowers creatives, entertains audiences and rewards shareholders. We couldn't be more excited to get to work."

In total, the transaction included $47bn of new equity investment in Class B Common Stock, led by the Ellison Family, RedBird, Public Investment Fund (PIF), Abu Dhabi Developmental Holding Company (L'IMAD), Qatar Investment Authority (QIA) and LionTree, which was priced at $12.00 per share. Under the terms of the agreement, WBD shareholders received an amount in cash equal to $31.02 per share. 

Gerry Cardinale, Founder, Managing Partner, RedBird Capital, and Skydance Board Director, added: "This is a defining moment for the industry. By applying our owner-operator model to Paramount and WBD's unmatched portfolio of iconic franchises, premium original programming, and live sports rights, we can protect that legacy while building for a media landscape that's undergoing transformational change. David, our Co-CEO Ynon Kreiz, and the rest of our world-class Skydance team have the vision and track record to lead through this change. We're proud to back them as we build a stronger Hollywood, expand opportunities for talent, and create long-term value for our shareholders."

Read the full memo from Ellison and Kreiz to Skydance employees here, as seen by Business Insider:

Team,

Today we begin an exciting new chapter as Skydance.

Getting here has been quite a journey. Over the past year and beyond, it has taken hard work, perseverance and commitment with many challenges along the way – but we did it! To everyone at both companies who helped get us to this moment: thank you. Thank you for your patience, your resilience and, above all, your belief in what we could accomplish together.

Bringing Paramount and Warner Bros. Discovery together fulfills a vision that began with Skydance's acquisition of Paramount: to build the next-generation media and entertainment company, powered by creativity and technology. The goal was never simply to add more production capacity, brands or IP. It was to unite the talent, resources and capabilities of these companies into a stronger competitor, one with the scale to take on the biggest players in our industry. Together, we will give these iconic studios the opportunity to win for generations to come.

Built for what's ahead

As all of you know, our industry is in a period of profound change. Audiences have more choices than ever, technology is reshaping how stories are created, distributed and experienced, and competition for people's time and attention has never been greater. We don't just want to succeed in this environment – we want to win and help shape the future of the industry.

We want to lead.

And that starts with what we're building together: a company that tells great stories in every genre, for audiences everywhere, on every platform. A company that can compete in a crowded market and win at global scale, create enduring value for all stakeholders, and strengthen the industry as a whole.

As owner-operators, we're in this for the long term, committed to building Skydance for the future – not simply optimising for the next quarter or the next year, but creating a company built to endure, evolve and remain relevant. That means being creative-first, audience-focused, tech-forward and globally scaled – building a thriving ecosystem where stories and worlds are imagined, brought to life and experienced by audiences of all ages, everywhere.

At the center of it all is a clear purpose: to entertain, inspire and inform the world through extraordinary storytelling. And we'll be guided every step of the way by shared priorities that shape how we intend to operate, how we make decisions, how we work together and how we show up for our audiences, our partners and one another.

Our top priorities

To bring that mission to life, these are the priority areas where we will concentrate our energy:

1. Win in storytelling.
   Great stories remain at the heart of everything we do. We will invest in the ideas, creators, franchises and experiences that captivate audiences around the world and create lasting cultural impact. On the big screen, we are committed to making at least 30 movies a year, pairing original stories from today's most exciting filmmakers with beloved franchises like Harry Potter, Mission: Impossible, The Lord of the Rings, DC, Transformers and Star Trek. On television and streaming, it means storytelling like Game of Thrones, Landman, NCIS, Tracker and SpongeBob SquarePants. In games, it means worlds like Hogwarts Legacy and Mortal Kombat; and in live sports, it means the NFL on CBS, the UFC, UEFA and March Madness, just to name a few.
    
2. Become the most technologically capable media company.
   Technology is fundamentally reshaping our industry, and we intend to be at the forefront. We will use technology, data and emerging capabilities to improve how we create, distribute, and monetise content, from new production tools to personalisation and entirely new ways for fans to engage with the stories they love. We will embrace the opportunities AI provides to expand what our creatives can imagine and to make our businesses even more productive. The opportunities ahead are enormous, and we intend to seize them. But one principle will never change: technology must serve the art – never the other way around.
3. Lead in a crowded market.
   We came together to create another major competitor in the industry. And with our combined scale, assets and global reach, we are positioned to take on some of the largest technology and media companies in the world and to lead in an evolving entertainment landscape. We will use that strength to drive synergies, operate with discipline and invest in the long-term growth of our business. And we will go further than traditional synergies. By embracing the most advanced technologies available and embedding them into how we operate, we will work smarter, move faster and unlock efficiencies the merger alone could not deliver.
4. Earn Trust Every Day.
   Trust is foundational to everything we do. And we are committed to earning it every day by communicating directly, following through on our commitments and listening closely to those we serve and work alongside. That is essential to our reputation and our long-term success.

As we work toward these goals, we must never lose sight of what matters most: our people. We will build a culture where people feel respected, empowered, supported and proud of the work they do. And we will extend that same commitment, with reliability and responsibility, to our creators, audiences, consumers, advertisers and partners.

None of what we accomplish happens in a vacuum. It reflects everyone joining forces to unlock the full potential of our assets: an unmatched portfolio of brands, franchises, libraries, IP and creative talent, with decades of history and, in many cases, decades of opportunity still ahead.

Together, we can reach audiences across platforms, markets, and generations in ways neither Paramount nor WBD could have achieved alone. With the talent, scale, relationships and resources to build on, we can create something truly distinctive.

For audiences, it means more choice and more ways to experience the stories they love. For creators, it means a partner with the scale and capabilities to help their best ideas reach the widest possible audience. For our partners, it means a broader, more powerful platform to build on. And for the broader creative community, it means an enduring commitment to storytelling and the people who make it possible.

That is the foundation of Skydance. And it's why this combination matters so much.

Honoring an extraordinary legacy

The union of these two iconic companies represents an exciting future. But, just as important as what we build together is preserving what has made them iconic in the first place. Paramount and Warner Bros. each have a distinct identity and extraordinary legacy that deserves to stand on its own.

In choosing our corporate brand, we never wanted to diminish, alter or overshadow any of the assets that have global recognition and have withstood the test of time. Both studios will continue to operate under their own names, and audiences will still see the Paramount mountain and the Warner Bros. shield before the films and shows they love.

Warner Bros. is woven into the history of modern entertainment, from film and television to journalism, sports, unscripted programming and some of the world's most recognisable characters and franchises. Paramount has an equally extraordinary legacy, with more than a century of storytelling that helped define the American film industry and shape entertainment across every medium.

We realised early on that simply combining the two names – WarnerParamount, ParaWarner or ParamountWarner – accomplished none of what we wanted. Every variation somehow made two giants feel smaller, not greater. It asked each to give something up rather than allowing us to create something new. This isn't a merger of convenience. It's the beginning of a new era in entertainment, and we wanted a name that looks forward rather than one that simply splices together the past.

That brought us to Skydance – a name that obviously has special meaning to David, who chose it for his own studio 20 years ago. It evokes possibility: scale and ambition, creativity and imagination, artistry, and innovation. Most importantly, it doesn't compete with either legacy. It gives the new company an identity of its own while allowing Paramount and Warner Bros. – and all our extraordinary brands – to remain in the spotlight.

Because ultimately, what we are bringing together is much more than brands and libraries. It is the creative spirit, ambition and craftsmanship that have kept these companies culturally relevant for generations. That spirit will continue to be a core part of who we are at Skydance.

And who we are will also be defined by what we strive to accomplish – not just for our company, but for the industry at large. That means looking ahead to the forces that are reshaping entertainment and finding ways to harness them to expand what's possible – for creators, for audiences and for the business itself.

Financial strength

We're building a diversified company with the financial strength to compete aggressively and the discipline to create sustainable value. That's not just important to our investors – it's important to all of us. A financially strong, well-run company gives us the freedom to take creative risks, invest in our people and our technology, and pursue the kind of opportunities that set us apart.

In concrete terms, we are together one of the largest media and entertainment companies in the world, with nearly $70 billion in revenue. As we have said publicly, we are also targeting at least $6 billion in synergies, which will make us leaner and more nimble and free up capital to invest in the stories, creators and technology that matter most.

Integrating two companies will bring change, including difficult decisions that affect our workforce. We are committed to handling this process thoughtfully and respectfully.

The road ahead

Today is Day One.

We have an incredible collection of assets. Extraordinary creative talent. Global scale. The technology to lead. And most important, we have the people who bring it all to life every day.

We have everything we need to win, and that is our goal: to build a next-generation global media and entertainment company that puts audiences first, empowers creators, embraces innovation and creates lasting value for generations to come.

But none of this happens without you. Thank you for everything you've brought to this moment. We're proud to write this next chapter with you.

Now the real work begins.

Let's go!

David and Ynon

To reflect the changing media market, the US Federal Communications Commission (FCC) recently voted to repeal its 39% national television multiple ownership rule and replace it with a case-by-case review. Discover more here.