Staff Reports
A new era in Hollywood is beginning with the rise of Skydance.
CEO and Chairman David Ellison’s long-anticipated—and long-feared—deal to consolidate Paramount-Skydance and Warner Bros. Discovery was announced Oct. 6.
Ellison said in a statement: “From the start, our ambition was to bring these two storied studios together and create a stronger competitor, with the talent, resources, and reach to tell great stories in every genre, on every platform, for audiences everywhere. Now that ambition is a reality.”
The $111 billion merger faced months of public protests, but ultimately passed legal and regulatory challenges in the U.S. and in Europe.
Ellison now controls the new media empire with help from his billionaire father Larry Ellison and investors from Saudi Arabia, Qatar, and other Middle Eastern countries. The company, Skydance, combines two legendary film studios, both more than 100 years old: Paramount Pictures and Warner Bros. Pictures.
Ellison also now controls the two companies’ streaming services, including Paramount+ and HBO Max. They will also get MTV, Comedy Central, and the Food Network. And they will control two huge news outlets: CNN and CBS News.
Among the television shows Skydance gets to distribute are Ted Lasso, The Daily Show, the Star Trek franchise, and all those Looney Tunes cartoons.
The TAKEAWAY
WHO’S AGAINST THIS MERGER?
Backlash against a possible merger between the media companies increased in April when more than 2,000 actors, writers, and directors signed a letter opposing the deal.
The letter warns that the merger will result in “fewer opportunities for creators, fewer jobs across the production ecosystem, higher costs, and less choice for audiences in the U.S. and around the world.”
But ultimately, federal regulators cleared the transaction in June.
A coalition of 12 states led by California filed an antitrust lawsuit to block the deal, which was resolved via a court-approved settlement in September.
Judge Araceli Martinez-Olguin ruled the settlement “represents a reasonable factual and legal resolution of the dispute,” is “procedurally sound” and was reached fairly between the parties.
Supreme Chief Justice Elena Kagan denied a last-minute emergency petition filed by Paramount subscribers trying to halt the closure.
To satisfy regulators and settle the antitrust challenges, the combined company (operating as Skydance/Paramount) must adhere to strict requirements:
- They must release at least 30 films annually, and failure to meet this quota forces the sale of its stake in Miramax.
- At least 20% of film production must take place in the U.S. for the first two years, rising to over 30% afterward.
- Must establish an independent editorial board to oversee CBS News and CNN.
- Agrees not to sell or close the historic Paramount or Warner Bros. studio lots during the commitment period and includes reapplication rights for displaced employees.
Critics say the agreement is overly deferential to Paramount, and outside film industry groups submitted filings urging Martinez-Olguin to reject it, with Sen. Cory Booker, D-N.J., also asking the judge to subject the settlement to additional review before she rules.
Martinez-Olguin shut down the critics’ requests Sept. 30, writing in her ruling that “consent decrees” like this one—which settle a case but keep the court still involved to make sure it’s followed—doesn’t need to fully resolve the lawsuit or the states’ initial arguments that the merger violated federal antitrust laws.
