After months of delays, the merger of the legendary American film companies Paramount and Warner Bros. was completed on October 6.
As a result of a deal worth $110 billion, Paramount Skydance and Warner Bros Discovery, which own film studios, television channels, streaming services, rights to the Harry Potter saga, the Game of Thrones series and a huge number of other films and TV series, merged into a corporation called Skydance.
The deal comes with strict conditions on what this new entertainment giant will and will not do, from the number of new films it will release in its early years to the editorial policies of CNN and CBS news channels.
The BBC explains in which four areas the consequences of the merger could be clearly visible - and affect ordinary viewers.
1. The price of a streaming subscription may increase
Warner Bros owns the streaming company HBO Max, which produced Game of Thrones and its prequels and other popular series. Paramount Skydance also has streaming - Paramount+.
Merging these services onto one platform or subscribing to both streaming services as a package could result in subscribed viewers having to spend more money.
In the short term, those who subscribe to both services may save money, but overall, experts predict prices will rise further as Skydance needs to achieve profitability.
As a result of the purchase-merger, Skydance acquired a debt of $80 billion. The merger, according to the company's management, should save up to six billion dollars a year.
Mike Prokes of Forrester Research predicts that subscribers to the two streaming services will have access to more products, but will also have to pay more for it.
"There's no way that the combined Paramount+ and HBO Max streaming service won't cost more for those who were previously only subscribed to one of them," Prokes told the BBC.
2. More new films
More than ten US states opposed the merger of the two pillars of Hollywood by filing a lawsuit. In September, the merging companies signed an agreement with them, and one of the conditions of this agreement was a minimum number of new films per year.
This threshold is set for five years. In the first two years, Skydance must release at least 30 films annually, and in the remaining three years, at least 32 films each year.
A total of 156 films, most of which should be shown in cinemas. In addition, the merged company must produce at least four independent films annually.
If Skydance fails to meet this minimum, it could face a forced sale of its 49 percent stake in Miramax, which was co-founded by jailed Hollywood mogul Harvey Weinstein.
When that five-year period expires, Skydance will be able, like its rivals Disney, Netflix and others, to place more of an emphasis on streaming rather than theatrical release.
Disney's $71 billion purchase of 20th Century Fox in 2019 showed that such megamergers could lead to fewer theatrical releases. Before the merger, 20th Century Fox typically released 12 to 17 films a year, after which it released only three to six.
3. Many in Hollywood may lose their jobs.
Many film industry workers fear that the merger of two legendary studios will be a disaster for them.
Actors and writers even recently staged a protest outside Paramount Studios in Los Angeles. They blame the regulatory authorities overseeing the merger for protecting industry workers.
“This city is its people. These people make the entertainment industry, it's on them, it's on their creativity that this industry stands, and they are the ones who are hit hard by this deal,” actress Kirsten Vangsness told the BBC.
Consulting firm CVL Economics estimates that as a result of the merger, about 4,500 jobs will disappear, and the population of Los Angeles County will receive about $1.26 billion in lost wages over three years.
At the same time, Los Angeles has already lost about a third of its film and television workers since 2022—a total of about 50 thousand jobs.
True, the terms of the merger provide for the creation of a fund from which the retraining of those who lose their jobs will be paid. But the new merged company is not prohibited from cutting jobs.
4. CNN and CBS could be different.
Under the terms of the deal, Paramount will create a special commission that will oversee the editorial independence of CNN and CBS.
CNN was owned by Warner Bros., CBS News was owned by Paramount, and now these two of the largest political news networks in the United States find themselves under one corporate roof.
The head of CNN, former BBC director general Mark Thompson, and CBS News editor-in-chief Bari Weiss remain in place.
But Paramount expects to cut billions in costs as a result of the merger, and employees at both networks fear deep layoffs await them.
In addition, skeptics still fear for the independence of these channels in their editorial policy.
