Paramount Closes $111 Billion Warner Bros. Discovery Takeover

Paramount completed its $111 billion acquisition of Warner Bros. Discovery on October 6, ending an eight-month bidding war that reshaped Hollywood's ownership map and created a combined company with annual revenue of almost $70 billion.

The merged corporation now operates under the name Skydance. It controls Warner's studios, HBO, its streaming platforms, games, and TV networks including CNN and HGTV.

How did Paramount beat Netflix?

The process began in October 2025, when Warner Bros. Discovery disclosed it was exploring a sale after receiving unsolicited interest from several major players. The company had struggled for years under billions of dollars in debt, declining cable viewership, and fierce streaming competition.

Paramount and Comcast emerged as serious contenders, with Paramount initially viewed as the frontrunner. But WBD's board judged Netflix's offer more attractive: $82.7 billion for Warner's film, television, and streaming assets alone. In January, Netflix strengthened its position by amending the agreement to an all-cash offer of $27.75 per share.

Paramount kept pushing. Its roughly $108 billion bid covered all of Warner's assets, not just studios and streaming. The WBD board repeatedly rejected the offers, citing Paramount's heavy debt load, increased risk, and the suite of investors bankrolling the bid — Saudi, Qatari, and Abu Dhabi sovereign wealth funds. The board calculated Paramount's offer would have left the combined company carrying $87 billion in debt.

In January, Paramount sued for more information about the Netflix deal. A month later it offered WBD shareholders a $0.25 per share "ticking fee" for each quarter the deal failed to close by December 31, 2026, and promised to pay the $2.8 billion breakup fee if Warner walked away from Netflix.

The decisive move came in February: Paramount raised its offer to $31 per share. The WBD board treated it as a superior offer and extended talks. Netflix declined to counter and withdrew.

"The transaction we negotiated would have created shareholder value with a clear path to regulatory approval," Netflix co-CEOs Ted Sarandos and Greg Peters said in a February 26 statement. "However, we've always been disciplined, and at the price required to match Paramount Skydance's latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid."

Who is paying for it?

David Ellison runs Paramount after acquiring it with significant backing from his father, Larry Ellison — Oracle's chairman, the world's sixth-richest person, and a major Trump donor. Beyond Paramount's existing billions in debt, the company will assume the roughly $33 billion in debt Warner Bros. Discovery carries.

The financing includes:

• A $54 billion debt commitment from Bank of America, Merrill Lynch, Citi, and Apollo Global Management
• $45.7 billion in equity from Larry Ellison

What obstacles did the deal face?

Regulators and lawmakers pressed hard. The U.S. Department of Justice approved the deal in June, but a coalition of 12 state attorneys general sued on July 13 to block it, arguing the merger would lessen competition and harm movie theaters, cable distributors, and viewers. California's attorney general, Rob Bonta, led the coalition, joined by Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. U.S. District Judge Araceli Martínez-Olguín issued a 14-day pause, but a judge approved the deal in late September.

"These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review," Bonta said in a February 26 statement.

Earlier, 11 state attorneys general had urged the DOJ to review the merger over concerns it would stifle competition and raise subscription prices. Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal had warned the Justice Department's Antitrust Division that the merged giant could gain excessive market power to raise consumer prices.

The deal also raised political questions. Trump personally sought concessions from news divisions critical of him, including a $16 million settlement from CBS before his FCC approved the Ellison takeover of Paramount. He pressured Netflix, before it exited the bidding, to fire former Biden White House official Susan Rice from its board, and has stated his intention to bring CNN to heel. Under David Ellison, reporting critical of the administration has been shelved or faced heightened scrutiny from Ellison or Bari Weiss, his appointed head of CBS News. Ellison has also warned of significant job reductions ahead — fueling concerns among critics about job losses and lower wages, particularly at Warner-owned CNN.

What happens next?

The integration work now begins. Paramount+, HBO Max, and Discovery+ are all set to be combined eventually, giving Skydance a single streaming footprint to compete with Netflix and Disney. The open questions are how many jobs survive the merger, whether the state coalition continues its challenge, and how the combined $70 billion-revenue company services its debt while restructuring.