Billionaire David Ellison officially controls Warner Bros. Discovery now that Paramount’s $111 billion acquisition of its fellow media and entertainment giant closed on Tuesday.
Warner Bros., founded in 1923, now combines with the almost equally old Hollywood giant Paramount, which became Paramount Skydance last year after Ellison bought it. The newly formed conglomerate will be called Skydance, after the company Ellison founded in 2006.
“Today is a historic day, not just for Skydance but for our entire industry,” Ellison said in a press release. But in a memo sent to employees, the CEO reportedly acknowledged that layoffs were now on the horizon.
“Integrating two companies will bring change, including difficult decisions that affect our workforce,” the memo read, per Variety.
The acquisition brings together two major film studios, as well as two streaming services and two of the top news networks, CBS and CNN. The streaming services, Paramount+ and HBO Max, will “unify into a single service over time,” the company announced.
The sheer magnitude of the merger, and the implication that Hollywood would now shrink to only four major studios, meant that it sparked fierce outrage. The deal was criticized by more than a thousand Hollywood insiders and sparked several lawsuits from the likes of the Writers Guild of America, which claimed that the merger would suppress writers’ wages and reduce output, and a group of Paramount+ subscribers, who were worried about price hikes. Critics voiced concerns about the anti-competitive implications of the consolidation of two major studios, as well as the potential damage to the journalistic independence of CNN, which has faced significant ire from the President, who went so far as to ban the news outlet from the White House.
Under the leadership of Ellison-appointed Bari Weiss, CBS has been accused of bowing to Trump administration requests and self-censoring reporting. Ellison has close ties to the Administration, particularly through his fiercely MAGA-aligned billionaire father, Oracle founder Larry Ellison. A recent lawsuit, filed by some Paramount investors, accused the Ellisons of making illegal side deals with Trump to guarantee approval for the merger. The lawsuit claims that the Ellisons’ promises to the Trump administration included an alleged overhaul of CNN. Paramount denies the claim.
Ellison is addressing those worries by reportedly keeping current CNN leadership, with CNN chairman Mark Thompson telling employees that he was convinced Skydance executives would maintain CNN’s independence, per a recent memo reported by The New York Times.
Skydance’s MAGA ties could potentially grow beyond the Ellisons too, as recent reports claim that Paramount execs “have discussed asking Elon Musk to become part of a syndicate of equity investors into Paramount.” Under Trump, the FCC has also recently signed off on allowing Middle Eastern sovereign wealth funds to invest in Paramount, positioning their collective stake to roughly half of the merged entity.
But all the obstacles disappeared one by one over the last few months. The last and perhaps most significant of those hurdles was lifted last month when the company settled with a group of twelve states, led by California, just mere days after threatening to exit the state and move its business to Tennessee.
The settlement came with the requirement that Skydance commit to releasing 30 movies a year in its first two years, then growing to 32 films a year in the following three years. Those figures should also include at least four independent films in each of the five years of the commitment period.
