David Ellison has completed the acquisition of Warner Bros. Discovery ( Warner Bros . Discovery ), with a transaction value of $110 billion. This mega-deal is expected to reshape Hollywood.
Paramount Skydance (now known as Skydance) completed the acquisition of WBD on Tuesday. The merged company now controls Paramount Pictures and Warner Bros. Studios; streaming services HBO Max, Paramount+, Pluto TV and Discovery+; as well as television networks such as HBO, CBS, CNN, TNT, HGTV and Food Network. It also owns iconic intellectual properties such as DC Comics, Harry Potter, and SpongeBob.
Skydance is expected to become an entertainment giant that can compete with Disney and Netflix in terms of scale and cultural influence.
Controlling this portfolio also solidified Ellison's status as a media mogul. Skydance Media is a production company founded by Ellison in 2006, which has been involved in the production of films such as "The Lone Ranger." The company merged with Paramount last August.
The new Skydance will be led by Ellison and former Medtronic CEO Ynon Kreiz. Ellison will be responsible for the creative and technical strategies of Skydance, while Kreiz, who will join as co-CEO, will be in charge of mergers and acquisitions integration and daily operations.
HBO will be in charge of the streaming strategy of the merged company after Cindy Holland, the head of Paramount's streaming division, resigns. Mark Thompson will remain in his position as Chief Executive Officer, while Bari Weiss will take on responsibility for CBS News.
The freshly renewed Skydance faces numerous challenges, including a huge debt burden and fierce competition in the streaming industry. Even after the merger, the combined viewership of Paramount and HBO Max still falls short of that of Disney or Netflix, not to mention YouTube.
Lightshed Partners's media analyst, Rich Greenfield, when talking about Ellison's streaming plans, said: 'This is a war for users' time; you are chasing the giants in this field, which are YouTube.'
The completion of this transaction brought to an end a months-long tug-of-war that was comparable to the HBO series.
The merger and acquisition have been delayed because 12 states in the United States and the Screen Writers Guild of America have filed lawsuits. Paramount reached a settlement with these lawsuits in September and pledged to make concessions, including increasing production expenditures in the United States, ensuring a minimum number of films are distributed by theaters, and not selling any of the two film studio sites.
In a memo sent to Paramount employees, Ellison stated that this transaction will "bring more opportunities to our creative staff, production teams, and employees from various business departments, as well as provide more exciting entertainment content for audiences around the world."
Critics argue that putting Paramount and WBD under the same roof could harm competition in the entertainment industry, leading to a reduction in jobs for creative personnel and increased prices for consumers. Thousands of Hollywood creatives, including J.J Abrams and Ben Stiller, signed a public letter in April opposing this deal.
Since if the transaction is not completed by October 1st, Paramount will need to pay $650 million quarterly, which is approximately $7 million per day, the company has been stepping up efforts to finalize the acquisition of WBD.
Within Paramount and WBD, employees are remaining vigilant and preparing for the internal competition that will arise after the merger of these two media giants. Ellison once promised that this deal would result in savings of $6 billion, however, the company stated that layoffs would not be the main source of cost reduction.
As for which teams and employees will remain in the new Skydance, Ellison stated in September, after reaching a settlement in the lawsuit that hindered the transaction, that he and his colleagues "don't have all the answers yet," and added, "I won't pretend otherwise."
