Paramount closed its acquisition of Warner Bros Discovery on Tuesday, folding both companies into a new entity called Skydance that trades on the New York Stock Exchange under the ticker SKYD.
The big picture: Skydance now owns two major film studios, two global streaming services, CBS and HBO, the CBS News and CNN newsrooms, CBS Sports and TNT Sports, and a franchise library that runs from Top Gun and Harry Potter to The White Lotus and SpongeBob SquarePants.
- Warner Bros. Discovery shareholders received $31.01666668 in cash per share, and WBD stock stopped trading on Nasdaq on Tuesday.
- The deal was valued at $111 billion including assumed debt, and the new company carries about $80 billion in net debt against nearly $70 billion in annual revenue, per Variety.
The backstory: David Ellison's Paramount Skydance launched its bid a little more than a year ago and had to beat a rival Netflix offer for Warner assets and an antitrust suit from 12 Democratic state attorneys general before closing. The company said competition authorities in nearly 70 jurisdictions approved the combination.
- The delay past September 30 cost Paramount a ticking fee of roughly $7 million a day, or $41.9 million extra paid to Warner investors, according to Variety.
What they're saying: "Today is a historic day, not just for Skydance but for our entire industry," Ellison said. "Our focus now turns to the future: building a company that empowers creatives, entertains audiences and rewards shareholders."
By the numbers: Skydance is targeting more than $6 billion in run-rate cost savings within three years, more than $10 billion in free cash flow by 2030, and a cut in net leverage to 3.0 times by the end of 2029. The equity financing was $47 billion of Class B stock priced at $12 a share, led by the Ellison family, RedBird and Gulf sovereign funds.
- The Ellison family holds the largest equity stake, and together with RedBird controls 100% of the voting shares. Former Mattel chief Ynon Kreiz joins as co-CEO.
What's next: The company promised at least 30 theatrical films a year with a 45-day theatrical window and said Paramount+ and HBO Max will merge into one streaming service over time. Variety reports thousands of layoffs are expected across both former companies in the coming months.
Why it matters: One owner now controls two of the five big studios, two major news networks and more than 200 million streaming subscriptions, so what you watch, where it streams and what it costs will be decided in fewer rooms than it was on Monday.
