Skydance: How Paramount-Warner Bros merger will change the way we watch movies and the news

Paramount has completed the $111 billion acquisition of Warner Bros Discovery on Tuesday (October 6) after months of legal turmoil. The new company will be called Skydance. David Ellison, the son of a billionaire tech mogul, has been named as the chairman and CEO. The former CEO of Mattel, Ynon Kreiz, will be a co-executive. They will oversee Paramount and Warner Bros’ movie studios, HBO Max, CBS News and CNN.

“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,” Ellison said in a statement, The Guardian reported.

Here’s what the deal may mean for streaming, movies, news and more.

David Ellison, the son of a billionaire tech mogul, has been named as the chairman and CEO. The former CEO of Mattel, Ynon Kreiz, will be a co-executive. File image/AFP

Streamers HBO Max and Paramount under the same umbrella

Skydance brings Paramount+ together with HBO Max, with plans to unify its streaming products “into a single service over time.” What this would be called and how it might affect consumer costs and choices remains unknown. David Ellison, the architect of the deal and the company’s CEO, has suggested HBO could still have some level of independence.

“Our viewpoint is, HBO should stay HBO,” Ellison said earlier this year. “They built a phenomenal brand, they are a leader in this space and we just want them to continue doing more of it. But by bringing the platforms together, all of our content will be able to reach even a broader audience than we can do standalone.”

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Paramount has also acquired Warner’s smaller Discovery+ streamer

Critics have expressed scepticism about how consumers might benefit, warning that already rising subscription fees could spike as the conglomerate meets payments on the billions of dollars in debt Ellison took on to finance the deal.

What’s not in dispute is the size of the resulting library of content. Paramount+ and HBO Max alone add up to roughly 14 per cent of the US streaming market, comparable to rival Disney+, but still behind Amazon Prime at 17 per cent and Netflix at 19 per cent, according to the streaming guide JustWatch. It pairs movie franchises like Mission: Impossible with Lord of the Rings, television hits from I Love Lucy to Friends, and personalities ranging from Guy Fieri to RuPaul.

An aerial view of the Paramount logo displayed on the water tower near Stage 7 at Paramount Studios in Los Angeles, California. File image/AFP

Don’t expect a “Diners, Drive-Ins and Dives Drag Race” anytime soon, but with so many properties combining forces, there is potential for all kinds of crossovers.

Hollywood consolidates even more, shrinking to 4 big studios

Paramount and Warner Bros are two of Hollywood’s oldest studios. Their merger means fewer companies control legacy film production.

Under a settlement reached last month with 12 states, the combined company has agreed to distribute 30 films in theatres each year for the next two years — and 32 films each year for three years after that. The fine print notes that only 50 per cent of those movies would have to be “produced or jointly produced” by the combined company. Skydance also agreed to increase spending on film production in the US by at least $1.5 billion over the next five years.

Still, many have expressed worry about what further consolidation could mean for jobs and which projects are greenlit down the road. Regulatory filings have indicated that the new ownership will be looking for ways to cut costs — including layoffs and downsising some overlapping operations.

Hollywood’s big six shrank to five when Disney bought most of 20th Century Fox in a deal finalised in 2019. Now it’s a big four: Skydance, Disney, Universal and Sony.

The deal joins news giants CNN and CBS

The deal also puts news giants CNN and CBS under the same ownership, a concern among many journalists given the Ellison family’s close relationship with President Donald Trump.

CBS News has taken steps to appeal to more conservative viewers since Ellison installed Free Press founder Bari Weiss as editor-in-chief. At “60 Minutes,” the new management brought heaps of turmoil, with the firings of its executive producer and three veteran correspondents, who have claimed that Weiss sought changes to news reports that appeared to be driven by politics.

Trump, who has attacked the reporting of both networks as “fake news,” said Tuesday that he’s happy the merger closed, and that Skydance is “going to be a great company.”

The deal puts news giants CNN and CBS under the same ownership, a concern among many journalists given the Ellison family’s close relationship with President Donald Trump. File image/AFP

Hollywood could be hit

For the people working behind the scenes, the merger has been described as “disaster”. Multiple actors and writers gathered at Paramount Studios in Los Angeles before the deal was finalised to oppose it. They accused the regulators of failing to protect industry livelihoods.

“It’s people that make this city. It’s people that make entertainment; it’s the everyday creatives that this industry is built on — this is who it hurts,” Criminal Minds star Kirsten Vangsness told the BBC

A report by consultancy CVL Economics for LA County said the merger could possibly eliminate around 4,500 direct film and TV jobs. This will cause a loss of $1.26bn in wages over three years.

With input from agencies