Companies · 6 Oct 2026 · 2 min read
Paramount completes $110 billion Warner Bros. deal, creating Skydance
David Ellison's company now owns CBS, CNN, HBO and two major film studios — along with roughly $80 billion of net debt and a $6 billion cost-cutting target.
The short answer
Paramount Skydance closed its roughly $110 billion acquisition of Warner Bros. Discovery on October 6, 2026, forming a new company called Skydance that trades on the NYSE as SKYD. Warner Bros. Discovery shareholders received about $31 per share in cash. The combined group expects nearly $70 billion in annual revenue but starts with about $80 billion of net debt.
What’s going on here?
After more than a year of bids, rejections, a bidding war with Netflix and an antitrust lawsuit, Paramount Skydance completed its takeover of Warner Bros. Discovery on Tuesday. The merged company, renamed Skydance, combines Paramount Pictures and Warner Bros. studios, news networks CBS and CNN, cable channels such as TNT, Comedy Central and Nickelodeon, and the streaming services Paramount+ and HBO Max. Warner Bros. Discovery shareholders were paid about $31 per share in cash, and the new shares began trading on the New York Stock Exchange under the ticker SKYD.
What does this mean?
The deal was valued at about $110 billion including debt, which makes it one of the largest media combinations ever. It was funded with $47 billion of new equity at $12 per share, led by the Ellison family, RedBird Capital Partners and sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi, plus bank and private-credit loans. Netflix had agreed to buy Warner's studio and streaming business in December 2025, but walked away in February 2026 rather than match Paramount's all-cash offer of $31 per share.
The final obstacle was a lawsuit from 12 state attorneys general led by California. The September settlement requires the company to release at least 30 films a year in each of its first two years, keep both Hollywood studio lots for five years, and create an editorial board meant to protect the independence of CBS and CNN. Because the deal missed its original deadline, Paramount also paid Warner shareholders an extra $41.9 million in so-called ticking fees.
The challenge now is financial. Skydance expects nearly $70 billion in yearly revenue, still behind Disney, but carries around $80 billion of net debt, about seven times its expected earnings before interest, tax, depreciation and amortization. Management aims to cut that ratio to three times by the end of 2029, helped by more than $6 billion of annual cost savings over three years from technology, marketing and real estate, and by merging Paramount+ and HBO Max into one service. The company has acknowledged the integration will involve difficult workforce decisions, and thousands of job cuts are expected.
The bull case
Skydance now owns one of the deepest content libraries in entertainment, from Harry Potter to The Godfather, plus live sports and news. Combining two streaming services could create a stronger rival to Netflix and Disney+, and if the $6 billion in savings arrives on schedule, cash flow could reduce debt quickly.
The bear case
The company starts life with a heavy debt load while traditional TV, a major profit source, keeps shrinking. Media mega-mergers have often struggled with culture clashes and missed targets, and deep cost cuts could weaken the creative output that gives the brands their value. Shares opened near $9.70, below the $12 price paid by its new equity investors.
Why should I care?
For markets:
Investors will judge Skydance on how fast it cuts debt and costs, while rivals such as Netflix, Disney and Comcast face a larger, more concentrated competitor in film, TV and streaming.
The bigger picture:
For viewers, fewer and bigger media owners often mean bundled streaming services and changing prices; for workers in film and TV, consolidation usually brings job cuts.
Market impact
| Asset (ticker) | Potential direction | Timeframe | Confidence | Reason |
|---|---|---|---|---|
| Skydance (SKYD) | ↔ neutral | Short term | Medium | Scale and cost savings are offset by roughly $80 billion of net debt. |
| Netflix (NFLX) | ↔ neutral | Long term | Low | Faces a bigger streaming rival but avoided taking on Warner's debt. |
| Disney (DIS) | ↔ neutral | Long term | Low | Competition intensifies, though Skydance must first integrate two companies. |
Potential impact, not investment advice.
Frequently asked questions
What is Skydance?
Skydance is the new name of the company formed when Paramount Skydance acquired Warner Bros. Discovery in October 2026. It owns Paramount Pictures, Warner Bros., CBS, CNN, HBO, Paramount+ and HBO Max, and trades on the NYSE as SKYD.
How much did Warner Bros. Discovery shareholders receive?
They received about $31 per share in cash. Because the deal closed later than planned, Paramount also paid a ticking fee that added around $41.9 million in total for Warner shareholders.
Will Paramount+ and HBO Max merge?
Yes. Skydance has said it plans to combine Paramount+ and HBO Max into a single streaming service over time, as part of more than $6 billion in planned annual cost savings.
Sources: CNBC, Variety, Los Angeles Times, CBS News
