Paramount’s Skydance group strikes $110 billion deal to buy Warner Bros. Discovery

Paramount’s Skydance-led group has struck a $110 billion deal to acquire Warner Bros. Discovery, uniting two of Hollywood’s biggest studios, a major broadcast network and a leading cable news channel in one of the largest media transactions in history.

Paramount Skydance Corporation and Warner Bros. Discovery Inc. said Feb. 27 they signed a definitive merger agreement under which Paramount will buy 100% of Warner Bros. Discovery, or WBD, for $31 a share in cash. The boards of both companies approved the deal unanimously, and closing is targeted for the third quarter of 2026, pending regulatory clearance and a vote of WBD shareholders.

If completed, the transaction would create a global entertainment group that controls Paramount Pictures and Warner Bros. studios; the CBS broadcast network; HBO, CNN, TNT, TBS, Discovery and HGTV; the Paramount+ and Max streaming services; and rights to the NFL, the Olympics and major film and TV franchises from Harry Potter and DC superheroes to Mission: Impossible and Top Gun.

The agreement caps a months-long contest for Warner Bros. Discovery and sets up a major test for antitrust and media regulators in the United States, Europe and the United Kingdom over how much consolidation is acceptable in a streaming-dominated era.

How Paramount beat Netflix

Warner Bros. Discovery had already agreed to an earlier deal to sell most of its studio and streaming operations to Netflix Inc. for $27.75 per share, in a transaction valued at about $82 billion including debt. That agreement, announced in late 2025, would have carved off a separate “Discovery Global” company housing many of WBD’s linear cable channels.

Paramount, controlled by producer David Ellison’s Skydance Media and backed by private investment firm RedBird Capital Partners, moved aggressively to disrupt the Netflix plan.

In December, Paramount launched a $30-per-share, all-cash tender offer for WBD and urged shareholders to vote down the Netflix merger. The company argued that the Netflix structure saddled the spun-off Discovery Global business with heavy debt and left too many questions about the combined group’s financial health.

Warner Bros. Discovery’s board initially rejected Paramount’s advances, describing the financing as highly leveraged and uncertain. That changed after Paramount sweetened its offer in late February.

On Feb. 24, WBD disclosed that Paramount had raised its bid to $31 per share in cash, added a ticking fee if closing was delayed, and agreed to pay a $7 billion regulatory reverse termination fee if antitrust or other government actions blocked the deal. The WBD board said the revised proposal “could reasonably be expected to lead to a Company Superior Proposal” under its contract with Netflix.

Two days later, after reviewing the updated terms, Warner Bros. Discovery’s directors formally determined that Paramount’s bid was superior. Netflix, given a contractual window to match, declined. In a statement, the streaming giant said the increased price was no longer “financially attractive” to pursue. Netflix walked away with a $2.8 billion breakup fee.

Paramount and WBD then announced their definitive agreement on Feb. 27.

Deal terms and financing

Under the merger agreement, each share of WBD common stock will be converted into the right to receive $31 in cash at closing. If the transaction has not closed by Sept. 30, 2026, WBD shareholders will also earn a daily “ticking” payment of about 0.28 cents per share, capped at 25 cents for every 90-day period of delay.

The price values Warner Bros. Discovery at roughly $110 billion on an enterprise-value basis, or about 7.5 times what the companies describe as fully “synergized” 2026 earnings before interest, taxes, depreciation and amortization.

While the offer is all cash to WBD investors, Paramount is leaning heavily on new equity and borrowing to fund it. The company plans to issue $47 billion of new Class B shares at $16.02 apiece, an issuance that the Ellison family and RedBird have agreed to fully backstop. Warner Bros. Discovery’s own board materials previously estimated that Paramount’s proposal would require on the order of $94 billion to $95 billion of new debt and equity financing, describing it as potentially the largest leveraged buyout in media history.

In addition to the purchase price, Paramount has agreed to cover the $2.8 billion termination fee WBD owes Netflix and to pay Warner Bros. Discovery $7 billion if the merger is blocked on regulatory grounds.

WBD’s stock rose toward the $31 offer price after the deal was announced. Shares of Paramount Skydance climbed as well, as investors shifted their view of the company from a potential takeover target to an acquirer.

Who will run the combined company

The transaction cements David Ellison, 43, as one of the most powerful executives in the entertainment business.

Ellison founded Skydance in 2010 and built it into a prolific production company behind films such as Top Gun: Maverick and Mission: Impossible — Fallout. In 2025, Skydance completed an $8 billion merger with the former Paramount Global and later acquired control of Paramount’s parent, National Amusements, from Shari Redstone.

Ellison became chairman and chief executive officer of the renamed Paramount, a Skydance Corporation. The Paramount–WBD deal extends that empire.

In their announcement, the companies said Ellison is expected to lead the combined group. Jeff Shell, the former NBCUniversal chief executive who joined Paramount as president, has helped design the acquisition and is widely viewed as the architect of the integration plan.

Warner Bros. Discovery chief executive David Zaslav framed the deal as the best outcome for his shareholders. “This transaction delivers compelling, all-cash value to WBD shareholders and positions the storied Warner Bros. studio and our world-class brands for long-term success,” Zaslav said in a statement. He is not slated to hold an executive role in the merged company.

Detailed board and governance arrangements have not yet been published and are expected to appear in forthcoming proxy filings.

A new media giant

If completed, the merger would combine two of Hollywood’s so-called “Big Five” studios and one of the three major U.S. broadcast networks.

Paramount’s portfolio includes Paramount Pictures, CBS, Nickelodeon, MTV, Comedy Central, BET, Showtime, the free ad-supported Pluto TV service, Paramount+ and the CBS News division, which also feeds dozens of local stations.

Warner Bros. Discovery adds the Warner Bros. film and television studio; HBO and the Max streaming platform; cable networks including CNN, TNT, TBS, Discovery Channel, HGTV and Food Network; the Cartoon Network children’s brand; and the DC Entertainment franchise.

Together, the companies say, they will control a library of more than 15,000 films and thousands of hours of television, including Harry Potter, The Lord of the Rings, Game of Thrones, Batman, Superman, Star Trek, Transformers, Teenage Mutant Ninja Turtles and SpongeBob SquarePants.

The combined group would also hold a broad slate of sports rights, including National Football League games, Olympic coverage, mixed martial arts contests, golf and major European soccer competitions.

Paramount projects that the merged company will generate about $70 billion in annual revenue, roughly $16 billion in EBITDA and about $10 billion in free cash flow. The group expects to serve some 207 million streaming customers across premium and ad-supported services worldwide, based on their current subscriber counts and viewing metrics.

In investor materials, Paramount has pledged to maintain both the Paramount and Warner Bros. banners and to release at least 30 films theatrically each year, with a minimum 45-day exclusive theatrical window and longer runs for major titles. The company has also said it will continue licensing content to outside platforms rather than pulling all programming behind its own paywalls.

Regulatory and political scrutiny

The deal faces intensive review from antitrust authorities.

In the United States, the Department of Justice or the Federal Trade Commission will examine the merger under the Hart-Scott-Rodino Act. While Warner Bros. Discovery does not own broadcast stations, Paramount’s ownership of CBS means any restructuring of broadcast licenses could also draw attention from the Federal Communications Commission.

WBD has warned investors that there is no guarantee regulators will approve the deal and that any approval could come with conditions that change its economics. The unusually large $7 billion reverse termination fee underscores how seriously both sides take the regulatory risk.

Democratic lawmakers and media advocacy groups have already criticized the transaction. They argue that putting CNN and CBS News, along with local CBS affiliates, under a single owner aligned with former President Donald Trump could narrow the range of mainstream news coverage.

Some critics point to staffing changes and editorial disputes at CBS News following the 2025 Skydance–Paramount merger as evidence of a shift in tone. In open letters and petitions, they have urged antitrust enforcers to weigh the impact on “viewpoint diversity” and election coverage, in addition to traditional measures of consumer harm.

Paramount has said the merger will increase, not reduce, competition by giving the combined company scale to challenge streaming leaders Disney and Netflix and deep-pocketed technology companies such as Amazon and Apple. It has pledged to respect newsroom independence and says traditional television now represents a shrinking share of how audiences get information.

The deal is also likely to face scrutiny in Europe and the United Kingdom.

In Brussels, European Union competition and cultural officials have voiced concern that a single studio group with deep theatrical and streaming pipelines could gain outsized influence over European cinema, distribution terms and release windows. French lawmakers have called for a “thorough look” at the transaction and indicated they will seek safeguards for national windowing rules that give theaters exclusive rights to new films for several months.

People familiar with the situation expect at least a Phase I review by the European Commission once the deal is formally notified. Potential remedies discussed by industry analysts include divestitures or behavioral commitments around children’s channels where Paramount’s Nickelodeon and WBD’s Cartoon Network overlap.

In Britain, the Competition and Markets Authority and media regulator Ofcom are expected to review the transaction’s impact on pay-TV, streaming competition and news plurality, drawing on precedents from previous reviews of Sky, Fox and Comcast tie-ups.

What it means for Hollywood and viewers

For the entertainment industry, the merger would mark another step in a long-running consolidation wave that has already absorbed 21st Century Fox into Disney and combined the former Time Warner assets with Discovery.

Creative guilds and unions have responded cautiously. Paramount’s promises of at least 30 theatrical films a year and continued third-party licensing suggest sustained demand for content, but experience from past mergers points to significant cost-cutting in overlapping divisions, including marketing, back-office operations and cable networks.

For consumers, the most immediate questions center on streaming. Paramount has not yet said whether it will maintain separate Paramount+ and Max apps or roll them into a unified platform, but executives have described plans for a “premier” global streaming offering that spans paid and free tiers and includes sports and news.

Such a service could simplify viewing for subscribers who now juggle multiple subscriptions. At the same time, fewer large competitors bidding for content and sports rights could give the merged company more leverage over prices and advertising loads in the long term.

The months ahead will determine whether the deal that unites Star Trek, Game of Thrones, the NFL and CNN under one owner is allowed to go forward as proposed, reshaped through divestitures and conditions, or blocked outright. Until regulators in Washington, Brussels and London make that call, the future of one of Hollywood’s biggest new empires — and of much of what global audiences watch and read — remains uncertain.