Paramount acquires Warner Bros Discovery in $111B deal
- Discovery sale to Paramount Skydance for $111 billion concluded on October 6, 2026, creating a $70 billion annual revenue media giant.
- Discovery initially announced it was exploring a sale in October 2025 following unsolicited interest from several major industry players.
- Discovery board initially rejected Paramount's advances over concerns regarding a heavy debt load and the composition of its financial backers, which included sovereign wealth funds from Saudi Arabia,...
The Warner Bros. Discovery sale to Paramount Skydance for $111 billion concluded on October 6, 2026, creating a $70 billion annual revenue media giant.
Paramount Outbids Netflix After High-Stakes Bidding War
Warner Bros. Discovery initially announced it was exploring a sale in October 2025 following unsolicited interest from several major industry players. Netflix emerged as an early frontrunner, offering $82.7 billion specifically for Warner’s film, television, and streaming assets. Paramount countered with a broader bid for all corporate assets, prompting a competitive escalation.
The Warner Bros. Discovery board initially rejected Paramount’s advances over concerns regarding a heavy debt load and the composition of its financial backers, which included sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi. Paramount responded in January by filing a lawsuit seeking information about the Netflix agreement, while Netflix amended its bid to an all-cash offer of $27.75 per share.
Paramount sweetened its package further by offering a $0.25 per share ticking fee for every quarter the deal remained unclosed past December 31, 2026, and promised to cover the $2.8 billion breakup fee tied to the Netflix agreement. In February, Paramount raised its bid to $31 per share. Netflix declined to match the revised terms and withdrew from negotiations on February 26.
The transaction we negotiated would have created shareholder value with a clear path to regulatory approval, however, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we’re declining to match the Paramount Skydance bid.
Ted Sarandos and Greg Peters
Financial Backing and Structural Debt Integration
The finalized $111 billion transaction leaves the newly combined corporation burdened with significant financial liabilities. Alongside its own existing debt, Paramount assumed approximately $33 billion in debt held by Warner Bros. Discovery, pushing the total debt burden of the combined entity to $87 billion.
To finance the acquisition, Paramount secured a $54 billion debt commitment from Bank of America, Merrill Lynch, Citi, and Apollo Global Management. Larry Ellison, the Oracle chairman and world’s sixth-richest person, provided $45.7 billion in equity to support the buyout led by his son, David Ellison.
Regulatory Antitrust Scrutiny and State Lawsuit
Lawmakers and state officials subjected the megadeal to intense scrutiny over market concentration and consumer pricing concerns. U.S. senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal previously wrote to the U.S. Department of Justice Antitrust Division to warn that the merger would grant excessive market power to the new entity.
California Attorney General Rob Bonta opened a state investigation into the transaction, and a coalition of 11 state attorneys general urged the U.S. Department of Justice to block the merger. Although the U.S. Department of Justice approved the deal in June, a coalition of 12 state attorneys general filed a lawsuit on July 13 to halt the acquisition.
The lawsuit, led by California alongside Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington, argued that the merger would harm movie theaters, cable distributors, and viewers by reducing competition. U.S. District Judge Araceli Martínez-Olguín responded by issuing a temporary 14-day pause before the acquisition ultimately gained judicial approval in late September.
Corporate Restructuring and Streaming Consolidation
David Ellison warned of incoming job reductions across the newly integrated company, fueling anxiety among workers at outlets such as CNN. The political alignment of the Ellison family also drew industry attention following reports of editorial scrutiny under CBS News leadership and negotiations involving regulatory concessions.
Following the final approval, Paramount and Warner Bros. officially adopted the name Skydance on October 6. The company announced plans to eventually combine its major subscription streaming platforms, including Paramount+, HBO Max, and Discovery+, into a unified service.