Paramount Skydance set to acquire Warner Bros Discovery
Paramount Skydance is reportedly preparing a plan to acquire Warner Bros Discovery, a deal that could change the landscape of the US entertainment industry.
Paramount Skydance (PSKY.O) is preparing to make a bid to buy Warner Bros Discovery (WBD.O), Reuters reported, in what would be the next major move after Skydance completed its $8.4 billion acquisition of Paramount Global.
The new deal has financial backing from the Ellison family, including billionaire Larry Ellison, co-founder of Oracle, and his son David Ellison, director of Skydance.
Uniting Hollywood's Top Brands
If successful, the deal will bring under one roof many famous brands: DC Comics (Superman, Batman), Harry Potter, The Matrix from Warner Bros and SpongeBob SquarePants, Transformers, Star Trek from Paramount. In addition, two major news channels CNN and CBS News will also be part of this merged system.
According to experts, this is like “an unexpected but logical sequel” in Hollywood's merger trend.
Big challenges ahead
The deal is not yet official, though the news sent Warner Bros. Discovery shares up 30% and Paramount shares up 15%. Warner Bros. Discovery is still restructuring to separate its ailing cable TV business from its movie and streaming services.
If Paramount Skydance succeeds, it would own all of Warner Bros Discovery’s assets, from Warner Bros. Studios to HBO to CNN. It would be a mostly cash deal, which would be more attractive to shareholders than continuing to wait for CEO David Zaslav’s restructuring plan.
Impact on the entertainment market
The deal could make Paramount Skydance a stronger competitor to Netflix, Disney and Comcast, as HBO Max and Paramount+ combine. But the deal will also face antitrust scrutiny from the US Justice Department. Experts warn that the merger could lead to higher prices, reduce the rights of content creators and limit film diversity.
With a fortune of more than $360 billion, Larry Ellison has the wherewithal to back the deal. The family has played a major role in funding Skydance’s expansion, and the Warner Bros Discovery deal is seen as financially viable.
If completed, the Paramount Skydance - Warner Bros Discovery deal would mark a historic turning point in Hollywood history, merging two long-standing film studios and many major brands into one giant entertainment corporation. However, the road ahead will be fraught with financial challenges, legal challenges and close supervision from management agencies.
