Paramount officially takes over Warner - big merger in Hollywood

Paramount has completed its acquisition of Warner Bros. Discovery. Both companies announced that the roughly $110 billion purchase is official.

The new merged company is called Skydance. It is one of the largest mergers to date in the media and entertainment industry. It brings together two of the oldest Hollywood film studios.

This means that the streaming provider HBO Max, the “Harry Potter” film series and television channels such as CNN will now belong to the same group as the streaming provider Paramount+, the TV channel CBS and films such as “Top Gun” and “The Godfather”.

The takeover followed a months-long dispute over Warner Bros. Discovery. Last December, Warner initially agreed to a purchase deal for certain parts of its company with the streaming provider Netflix. But Paramount, which is controlled by the family of tech billionaire Larry Ellison, submitted a counteroffer. Its goal was to take over the entire Warner Bros. Discovery company.

In the past few months, Netflix and Paramount have been going back and forth with purchase offers. Warner management has repeatedly spoken out in favor of Netflix as the preferred buyer. But Paramount increased its offer and Netflix withdrew from the race.

Paramount overcome the final hurdle a few days ago when a judge in California approved a settlement with twelve states. The states had protested that competition would be hindered by the merger.

The heads of the new company will be Larry Ellison's son, David, and his new co-CEO Ynon Kreiz. You are now faced with a complex integration of the group, which has to deal with a debt burden of tens of billions of dollars.

In the months-long struggle over the merger, Paramount nevertheless promised, among other things, to release at least 30 films from the two studios per year in cinemas in the first two years after the merger. In the three years after that there will be 32 films. For every film the studios pay less than this, a payment of $30 million is due.

In addition, the new umbrella company called Skydance wants to spend an additional $1.5 billion on productions in the USA over the next five years.

Hollywood fears job losses as a result of the merger. Liberals in the USA, in turn, are worried about Trump supporter Ellison's political influence on the Warner news channel CNN. The Ellison family only took over Paramount last year.

CNN has often reported critically on US President Donald Trump in the past. He railed against the broadcaster several times and ultimately banned him from the White House. Paramount co-owner Larry Ellison is once again firmly established in the Trump camp. The broadcaster CBS, which belongs to his company, adopted a friendlier tone towards the president and his government after his family took over the company.

Critics of the Warner deal therefore warned that CNN could lose its editorial independence in the hands of the Ellisons. Paramount agreed to form an independent editorial oversight board for CNN.