Paramount closes the 110 billion dollar Warner deal and becomes Skydance

Paramount completed its acquisition of Warner Bros. Discovery on Tuesday and said the combined company will be called Skydance. The deal is valued at 110 billion dollars. Skydance Class B shares were set to begin trading on the New York Stock Exchange under the ticker SKYD. David Ellison's company now sits over Paramount+, Pluto TV, HBO Max and Discovery+, and over networks that include CBS, CNN, HBO, MTV, Comedy Central, TBS and Food Network.

The company said the combination brings together two film studios, two global streaming services, CBS, HBO, the cable networks of both sides, and the news brands CBS News and CNN. The library it named includes live sports and franchises that TechCrunch listed as The Lord of the Rings, Game of Thrones, the DC Universe and Yellowstone. The Wrap added Harry Potter and SpongeBob SquarePants to the public description of the catalogue. Annual revenue of the combined business is nearly 70 billion dollars, TechCrunch reported, citing the company.

Clearance came from Warner shareholders and from regulators and governments in 68 jurisdictions, The Wrap reported, including the US Department of Justice, the Federal Communications Commission, the European Commission and Britain's Competition and Markets Authority. The path to Tuesday also ran through a bidding fight with Netflix. Paramount said in February that it would buy Warner Bros. after Netflix had earlier reached an agreement to purchase the film and television studios and the streaming business, excluding the cable networks. That Netflix structure did not survive.

A legal fight with 12 state attorneys general and the Writers Guild of America sat over the close. Judge Araceli Martinez-Olguin approved a settlement with the states. The commitments in that settlement, as The Wrap reported them, are specific: 1.5 billion dollars invested in domestic film and television production over five years, at least 30 films a year released in theatres, and separate negotiations for the distribution agreements of each company's cable networks. The investor page put a related output promise in the company's own language: a minimum of 30 theatrical films a year and more than 180 television shows and series.

On cost, Skydance said it is targeting at least 6 billion dollars in run-rate synergies within three years. The same note described an owner-operator model and a technology layer under the studios. Ynon Kreiz and Ellison had, a day earlier, named a chief executive team for the company that would exist after the close. Tuesday was the close itself.

The numbers that bind the new company are easier to track than the brand language. Thirty films a year is a floor, not a slogan, because it sits in a court-approved settlement as well as in the company's release. The 1.5 billion dollars is a five-year domestic production commitment to the states. The 6 billion dollars is a synergy target with a three-year clock. SKYD is the ticker the market will use from the first session. The 68 jurisdictions are the regulatory map already crossed.

What the close does not settle is how the two streaming services will be sold, or whether CNN and CBS News stay editorially separate inside one corporate news group. The settlement requires cable distribution talks to be run separately for each suite of networks, which is a constraint on how fast the company can fold channel carriage into one negotiation. Theatrical output is the other constraint: 30 films a year is a high bar for a business that has spent several years cutting slate size.

Ellison now controls a library that runs from DC and Game of Thrones to CBS and CNN, under a name taken from the buyer rather than from either of the old studios. The first public test is ordinary and dated. SKYD has to trade, the 30-film promise has to be scheduled, and the 1.5 billion dollar domestic commitment has to show up in production budgets rather than in the settlement text alone.