David Ellison emerged with his prized Hollywood juggernaut Tuesday as the merger of Paramount Skydance and Warner Bros. Discovery officially closed. The $111-billion transaction culminated a yearlong battle by the 43-year-old tech scion to add Warner Bros. Discovery to his family’s growing portfolio. Ellison’s smaller Paramount fended off the deep-pocketed streaming giant Netflix, hundreds of Hollywood merger opponents and, ultimately, a group of 12 state attorneys general, led by California’s Rob Bonta, to stitch up the coveted acquisition.
The Ellison family now controls one of the largest traditional media companies ever formed, with HBO, CNN, CBS, Comedy Central, TBS, Food Network, two traditional Hollywood studios and two major streaming services. His father, Larry Ellison, co-founded Oracle Corp., which owns a substantial stake in the popular social media platform TikTok. “Today is a historic day, not just for Skydance but for our entire industry,” David Ellison, the company’s chair and chief executive, said in a Tuesday statement.
“Our ambition was to bring these two storied studios together and create a stronger competitor, with the talent, replatform, for audiences everywhere. “Now that ambition is a reality,” he said. David Ellison will face considerable challenges bringing together the prominent brands and workplace cultures of the two companies
The goal was never simply to add more
“The goal was never simply to add more production capacity, brands or IP,” he wrote in his “Day 1” memo to workers of the merged entity. “It was to unite the talent, resources and capabilities of these companies .” By mid-morning, the landmark water tower at the Warner Bros. lot in Burbank included a new line, saying the WB was “a Skydance Corporation.” Shares of the new company began trading on the New York Stock Exchange under the ticker SKYD, a switch from last week when the company went by PSKY for Paramount Skydance and traded on Nasdaq.
David Ellison has called the merged company Skydance, the name he selected two decades ago when he began building his Hollywood studio. The stock got off to a wobbly start, trading at $9.51 a share, down 2.7% from Monday’s close. The new company emerged heavily in debt — more than $80 billion — to finance the buyout of Warner Bros. Discovery investors at $31.17 a share. Wall Street has expressed concerns about the company’s indebtedness — and taming its debt obligations will be a sizable chore for Ellison and his team.
Last week, he announced the hiring of Ynon Kreiz, former chief executive of Mattel, to lead the integration of the two companies and run day-to-day operations. Skydance has said it will find $6 billion in cost cuts over three years — a prospect that has worried weary Warner Bros. workers who have gone through three ownership changes in eight years. “As owner-operators, we’re in this for the long term, committed to building Skydance for the future — not simply optimizing for the next quarter or the next year,” Ellison wrote in his memo.
He noted that reducing $6 billion in spending
He noted that reducing $6 billion in spending “will make us leaner and more nimble and free up capital to invest in the stories, creators and technology that matter most.” Skydance said Tuesday that the “synergy savings” would primarily come from merging technology, integration and procurement as well as marketing costs and “real estate rationalization.” As part of last month’s settlement with Bonta, Ellison made a five-year commitment to hold on to the Warner Bros.
and Paramount lots. The company leases office space, including in Hollywood and Culver City, which eventually could be phased out. It also has properties scattered around New York City, where the corporation is based, and Atlanta. The company expects $70 billion a year in revenue, trailing Walt Disney Co., which last year generated $94.4 billion in sales. The Ellison family will be the controlling shareholders, with longtime Skydance investor RedBird Capital Partners joining with voting shares.
Nearly half of the new company will be owned by foreign investors after Skydance sought a waiver from the Federal Communications Commission, controlled by an appointee of President Trump, who has long favored the Ellison family’s flex to own two major news outlets — CBS News and CNN. The royal families of Saudi Arabia, Qatar and Abu Dhabi contributed $24 billion in equity to help Ellison close the deal.
Skydance said the transaction included $47 billion
Skydance said the transaction included $47 billion of new equity investment led by the Larry Ellison family, RedBird, the sovereign wealth funds and investment bank LionTree. RedBird contributed an additional $4 billion in equity to the deal, according to a person familiar with the financing but not authorized to comment. The latest round brings RedBird’s investment in Skydance to $6 billion.
RedBird founder Gerry Cardinale first took a stake in Ellison’s studio six years ago. Foreign investors will not have voting shares. The equity holdings were priced at $12 a share. Debt financing for the transaction was led by Bank of America, Citigroup and Apollo. Ellison named his executive team Monday, including CNN Chair Mark Thompson, HBO Chair Casey Bloys, Discovery streaming executive J.B.
Perrette and DC Comics managers James Gunn and Peter Safran — all former senior executives at Warner who made the switch to Skydance. CBS News Editor in Chief Bari Weiss’ remit remains unchanged. Thompson will manage the larger news organization of CNN. As part of the Sept. 21 settlement with the plaintiff states, Skydance must form a five-member editorial panel within six months to ensure that journalists within the two news organizations are allowed to report the news without undue influence from its owners.
The settlement also established requirements for theatrical film
The settlement also established requirements for theatrical film distribution — at least 30 films a year released into cinemas — and cable channel negotiations to try to prevent Skydance from using its newfound clout — through the ownership of more than 50 basic cable channels — to squeeze pay-TV distributors. Paramount executives fill out the rest of Ellison’s leadership team.
“Our industry is in a period of profound change,” Ellison wrote to his team. “Audiences have more choices than ever, technology is reshaping how stories are created, distributed and experienced. … We don’t just want to succeed in this environment — we want to win and help shape the future of the industry.”
