A new Hollywood studio will be born this week after an extraordinary nine months of struggle – a hostile takeover battle, a well-capitalized rival bidder, a government challenge and bitter grassroots opposition – launching a consequential new era for the entertainment industry.
CEO David Ellison’s merging of Paramount Skydance with Warner Bros. Discovery is an astonishing achievement. He only officially acquired Paramount 13 months ago (it closed on Aug. 7, 2025). Just a year later, he will now also lead Warner Bros. Discovery, which will be on its fifth owner since 2000 and has only existed in its current incarnation for four years.
Ellison has promised a lot, including news independence and a massive $1.5 billion investment in film production. Will he meet the moment, making good on his promise to enrich the output and respect the history of each studio, while also driving success in theaters, streaming and cable in this fractured media landscape? With an industry bracing for more layoffs, disruption from tech companies, shrinking ad revenue and the rise of artificial intelligence, the stakes couldn’t be higher.
Ellison, 43, is described by one producer-friend as “Smart. Kind. Polite. Loyal. Hard-working.” Is he up to the challenge of integrating two vastly different organizations, churning out 30 films a year, all while cutting $6 billion in cost under the pressure of $80 billion in debt?
That would be a tall order for a deeply experienced operator. It will test every facet of the young Ellison’s character.
At his disposal will be the third-largest studio in Hollywood, behind Netflix and Disney, and a vast collection of cable and broadcast networks bringing in huge amounts of ad revenue, albeit ever-shrinking with time. Also helping will be Ynon Kreiz, whom the company tapped last week to be co-CEO.
The new company, named Skydance, comes into existence on Tuesday, trading as a public company under SKYD, but effectively controlled by the Ellison family, led by Larry Ellison, the world’s 5th richest man.
There has been widespread opposition to this merger in and outside Hollywood. There is an abiding fear of job losses in the wake of years of COVID losses and labor strikes. And a separate fear of Trump-friendly control of vast news-gathering operations at CNN and CBS News (Larry Ellison is also a shareholder in the U.S. version of TikTok). There are fears of retaliation against those who publicly opposed the merger as well. All this remains to play out.
This merger shifts the landscape of Hollywood into something new. Skydance operates under industry-wide scrutiny, but also under a consent decree that requires $300 million in production spending in the United States annually for five years, 30 feature films released theatrically a year (and 32 for the final three years of the agreement), and an oversight board for CNN and CBS News.
Here is how the new landscape shakes out:
- The streaming service combining HBO Max with Paramount+ will now be the second largest after Netflix, with an estimated 220 million direct-to-consumer subscribers, rivaling Disney+ and Amazon Prime that each has nearly 200 million.
- The iconic movie production entities and physical studio lots of Paramount Pictures and Warner Bros. will remain intact as individual studio brands while operating under the Skydance parent corporation.
- TV networks and news operations include CBS, CBS News, CNN, HGTV, MTV, Nickelodeon, TNT, TBS, Comedy Central and the Food Network.
David Ellison’s challenge is now to turn this set of assets into a company capable of competing with Netflix, Disney, Amazon and Apple while also taking billions of dollars in costs out of the business.
He will also have to show a willingness to take big creative risks, as this year’s success of YouTuber Curry Barker’s “Obsession” illustrated.
But Ellison has already accomplished what many would have considered impossible. Chief Legal Officer Makan Delrahim told me at TheWrap’s Grill event last week that getting this merger done from the first unsolicited bid to closing was “like running from one end of a football field to the other with a stadium full of people shooting at us.”
The next phase is not likely to be any easier.
Skydance announced its new leadership structure Monday, but before the weekend, the news leaked that Warner Bros. film chiefs Michael De Luca and Pam Abdy would exit immediately. Dana Goldberg and Josh Greenstein will ostensibly run both Paramount Pictures and Warner Bros. studios, though other executive positions remain to be clarified. The leak of De Luca and Abdy’s firing — meaning they found out in the press that they were out — set a tense tone for the creative class that is close to both executives.
Abdy was said to have told Ellison bitterly: “Good luck to you. I left you 39 movies.”
Kreiz, a veteran of Maker Studios while owned by Disney and most recently of Mattel as it has evolved into a content company making movies like “Barbie,” is expected to carry the load of cutting costs.
With all the shouting now over, it’s up to the new Skydance team to deliver. Hollywood badly needs them to succeed.
