After months of twists and turns that included a bidding war with Netflix and a legal fight with 12 state attorneys general and the Writers’ Guild of America, Paramount and Warner Bros. Discovery officially closed their $110 billion merger on Tuesday.
The move creates an entertainment behemoth that will oversee multiple streaming services, including Paramount+, Pluto TV, HBO Max and Discovery+, and TV networks like CBS, Comedy Central, MTV, HBO and CNN. It will also oversee a vast library of IP, such as Harry Potter, the DC Universe, Game of Thrones, SpongeBob SquarePants and more.
“Today is a historic day, not just for Skydance but for our entire industry. 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,” CEO David Ellison said in a statement. “Now that ambition is a reality.”
“We’re grateful to everyone who made this possible – the employees, creative talent, and production teams of both companies, who worked tirelessly to get us here and inspire audiences around the world every day, as well as the advisors and partners who guided this transaction to completion. Our focus now turns to the future: building a company that empowers creatives, entertains audiences and rewards shareholders. We couldn’t be more excited to get to work.”
Paramount received clearance from Warner Bros. shareholders and regulators and governments representing 68 jurisdictions globally, including the U.S. Department of Justice and Federal Communications Commission, the European Commission and the United Kingdom’s Competition and Markets Authority.
Judge Araceli Martinez-Olguin also approved a settlement between Paramount and a dozen state attorneys general that includes commitments to invest $1.5 billion in domestic film and TV production over five years, release at least 30 films a year in theaters and negotiate the distribution agreements for each company’s suite of cable networks separately.
The combined company also must set up an independent editorial board to oversee CNN and CBS News’ operations and continue to operate Paramount and Warner Bros. Discovery’s studio lots for five years, among other things.
Failure to comply with the various commitments in the settlement range from a $30 million penalty per film that misses the theatrical goal to forced divestitures of the company’s 49% Miramax stake within a 12-month period as well as BET, Comedy Central, VH1, Smithsonian, Destination America and Science Channel within a 120-day period.
Additionally, Paramount reached a separate resolution with the WGA, including a five-year layoff pause at CBS and a $17.5 million health fund contribution.
It also agreed to concessions in the U.K. and Europe, including terminating its stake in United International Pictures and commitments to not to combine linear channels with its streaming services, maintain the editorial independence of its news services and children’s networks and provide more funding to Channel 5 to support high-quality news, original children’s programming and drama.
