Paramount Skydance Strikes $110 Billion Deal for Warner Bros. Discovery, Setting Up Major Media Merger Review

Paramount Skydance has agreed to buy Warner Bros. Discovery in an all-cash deal valuing the company at about $110 billion including debt, a move that would fuse two of Hollywood’s most storied studios into a single entertainment giant and intensify scrutiny of media consolidation in the United States and abroad.

Deal terms and timeline

The agreement, announced Feb. 27, calls for Paramount Skydance to pay $31 in cash for each share of Warner Bros. Discovery, or about $81 billion in equity value. A Paramount Skydance subsidiary will merge into Warner Bros. Discovery, which will survive as a wholly owned unit of the buyer. The companies say they expect the transaction to close in the third quarter of 2026, pending approval from Warner Bros. Discovery shareholders and regulators in the U.S. and other major markets.

Under the terms filed with regulators, each share of Warner Bros. Discovery’s Series A common stock will be converted into the right to receive $31 in cash, without interest. If the deal has not closed by Sept. 30, 2026, shareholders will also receive a “ticking fee” of about 0.28 cents per share per day until completion, subject to caps.

Paramount Skydance put the enterprise value of the transaction at roughly $110 billion, or about 7.5 times what it described as fully synergized 2026 earnings before interest, taxes, depreciation and amortization.

Financing and strategic rationale

Paramount Skydance said it has lined up $47 billion in new equity financing, mainly from the Ellison family and investment firm RedBird Capital Partners, and $54 billion in debt commitments from Bank of America, Citigroup and Apollo.

“We are creating a premier global media and entertainment company with the scale to thrive in a rapidly evolving landscape,” Paramount Skydance Chief Executive David Ellison said in a joint statement. He said the deal would give the company “a world-class content engine” and strengthen its direct-to-consumer and theatrical businesses.

Paramount Skydance described the combined company as a “next-generation global media and entertainment” leader, with film, television, sports and news assets designed to compete more effectively with Netflix, Disney, Amazon and Apple in streaming and live programming.

What the combined company would own

Together the companies would control:

• Film studios: Paramount Pictures and Warner Bros.
• Streaming: Max, Paramount+, Pluto TV, and Discovery+
• Networks: CBS, TNT, TBS and Discovery Channel
• News: CNN and CBS News
• Sports rights: including the NFL, the Olympics, the UEFA Champions League and college football

How Netflix factored into the outcome

The merger caps a months-long bidding war that pitted Paramount Skydance against Netflix for control of Warner Bros. Discovery’s assets.

In late 2025 Warner Bros. Discovery reached a separate agreement with Netflix to sell its studios and streaming platforms, including HBO Max and Discovery+, for an all-cash price that valued those assets at roughly $83 billion including debt. That plan would have spun off most of Warner Bros. Discovery’s traditional cable networks, such as CNN, HGTV and Food Network, into a separate company.

Paramount Skydance upended that arrangement in December by launching a hostile tender offer to acquire all of Warner Bros. Discovery for $30 a share in cash. It argued its bid was simpler and carried fewer antitrust risks than Netflix’s carve-out, which would have joined Warner Bros. and HBO’s libraries with Netflix’s already dominant streaming platform.

As the contest escalated, Netflix revised its proposal to an all-cash structure but kept its focus on the studio and streaming operations. Paramount Skydance raised its own offer to $31 a share for the entire company and added a series of concessions designed to reassure Warner Bros. Discovery’s board and regulators.

Those concessions included a promise to cover a $2.8 billion breakup fee Warner Bros. Discovery owes Netflix for terminating their earlier agreement, and agreement to a $7 billion reverse termination fee payable to Warner Bros. Discovery if antitrust or other regulatory authorities ultimately block the Paramount Skydance deal. Reverse breakup fees of that size are rare and underscore the regulatory uncertainty surrounding the merger.

After determining that Paramount Skydance’s proposal was “superior” under the terms of the Netflix contract, Warner Bros. Discovery’s board moved to accept the new offer. On Feb. 26 Netflix said it would not match Paramount Skydance’s improved bid, saying in a statement that the price required “would no longer be financially attractive to our shareholders.” The following day Warner Bros. Discovery and Paramount Skydance signed a definitive merger agreement, and Netflix’s deal was terminated.

Plans for studios, theatrical releases and streaming integration

The transaction is notable for the breadth of assets it would bring under one corporate roof.

On the entertainment side, the combined library would encompass franchises such as Harry Potter, DC Comics films, Game of Thrones and The Lord of the Rings television rights from Warner Bros., alongside Paramount’s Mission: Impossible, Top Gun, Star Trek, Transformers and Nickelodeon properties including SpongeBob SquarePants.

Paramount Skydance said it plans to keep both Paramount Pictures and Warner Bros. as distinct studio brands and to release at least 30 films a year in theaters worldwide. It committed to giving every film a full theatrical release with a minimum 45-day global theatrical window before those titles appear on subscription streaming services, with an “intention” of extending that to 60 or 90 days for strong performers. The company also pledged to maintain standard paid video-on-demand windows and to comply with local windowing rules such as those in France.

On streaming, the companies have signaled plans to integrate Paramount+, Max, Pluto TV and Discovery+ into a unified ecosystem spanning paid subscriptions and free, ad-supported offerings. Executives say greater scale, a consolidated technology platform and a broader content catalog will help reduce losses and accelerate a path to profitability in streaming, an area where both companies have faced investor pressure.

Cost savings, jobs and labor scrutiny

Warner Bros. Discovery, created in 2022 by the combination of AT&T’s WarnerMedia business and Discovery Inc., has struggled under a heavy debt load and uneven streaming performance. It has undertaken several rounds of restructuring, including content write-downs and project cancellations, to cut costs and reduce leverage.

Paramount Skydance itself is the product of consolidation. Skydance Media, backed by Ellison family wealth and private equity investors, completed its acquisition of Paramount Global in 2025, creating the current company with assets including the Paramount studio, CBS, MTV, Comedy Central and BET. That integration has already led to significant job cuts and realignment.

Paramount Skydance projects more than $6 billion in annual cost savings and “run-rate synergies” from the Warner Bros. Discovery transaction. The company has not detailed specific workforce reductions, but large mergers of this kind typically result in layoffs in overlapping areas such as corporate functions, marketing, technology and international distribution.

Labor unions and guilds that represent writers, actors, crew members and journalists are expected to closely scrutinize the deal. Hollywood unions only recently emerged from a wave of strikes over pay and the use of artificial intelligence, while news organizations have faced their own rounds of cuts and consolidation.

Regulatory and political questions

The merger raises sensitive questions about media pluralism and political influence. If approved, the combined company would own both CNN and CBS News, along with dozens of national and regional factual networks, at a time when public trust in news and institutions is strained.

Media scholars and civil society groups have warned that placing so many news outlets under a single owner could amplify the risk that business or political pressures influence coverage, even if individual newsrooms maintain formal editorial independence. The companies have said they intend to preserve the editorial autonomy of their news brands.

Regulators in Washington and abroad will weigh those concerns alongside more traditional antitrust questions, such as how the deal would affect competition in film production, streaming video, cable distribution and sports rights.

The Justice Department and Federal Trade Commission are expected to review the transaction under the Hart-Scott-Rodino Antitrust Improvements Act. Competition authorities in the European Union, the United Kingdom and other key markets will conduct their own probes, with particular attention likely on the impact on European film and television production, local content quotas and theatrical distribution.

Paramount Skydance argues the merger will enhance, not harm, competition by creating a stronger rival to digital platforms that already hold significant market share. Critics counter that the deal would reduce the number of independent major studios and give one company outsize leverage over theaters, distributors and content creators.

What comes next

Those questions may take months, or longer, to resolve. For now, the agreement marks a new peak in a decade and a half of media consolidation that has already seen AT&T buy and then spin off Time Warner, Discovery merge with WarnerMedia, Skydance take over Paramount, and Disney absorb most of 21st Century Fox.

Whether combining two legacy studios into a single super-sized conglomerate will deliver the promised scale and stability, or repeat the missteps of earlier megadeals, will depend on how regulators, investors, workers and audiences respond as the merger moves from announcement to reality.