Paramount Skydance Secures $110 Billion Acquisition of Warner Bros. Discovery, Outpacing Netflix

In a landmark move for the global media landscape, Paramount Skydance has finalized a definitive agreement to acquire Warner Bros. Discovery (WBD) for a staggering $110 billion. This monumental deal, officially announced on Friday, February 27, 2026, concludes a high-stakes, five-month bidding war where Paramount Skydance ultimately triumphed over its primary rival, Netflix. The resulting media titan will consolidate an unprecedented portfolio of assets, including major television networks like CNN, CBS, HBO, and Nickelodeon. Furthermore, the merger brings legendary entertainment franchises such as "Harry Potter," "Game of Thrones," the DC Universe, "Mission: Impossible," and "SpongeBob SquarePants" under a single corporate umbrella.

The $110 billion valuation reflects a comprehensive financial arrangement that includes Paramount assuming a significant portion of Warner Bros. Discovery’s existing debt. The equity value of the deal is estimated at $81 billion, with Paramount committing to pay $31 in cash for every outstanding share of WBD common stock. The WBD board of directors reached a unanimous decision to approve the merger shortly after Netflix withdrew from the competition on Thursday, February 26, 2026. Netflix representatives stated that further bidding had become "financially unattractive" at that price point. To secure the deal, Paramount has offered a $7 billion regulatory termination fee and agreed to cover a $2.8 billion breakup fee that WBD owed to Netflix from previous negotiations.

David Ellison, who has served as the President and CEO of Paramount Skydance since August 2025, is set to lead the newly formed corporate entity. The acquisition is heavily supported by his father, Larry Ellison, the co-founder of Oracle and a prominent supporter of President Donald Trump. David Ellison has already signaled his intent for the future, specifically mentioning plans for "radical changes" at CNN following the merger's completion. The financial architecture of the deal is supported by $47 billion in equity from the Ellison family and RedBird Capital Partners, complemented by $54 billion in debt financing provided by a consortium of banks including Bank of America, Citigroup, and Apollo.

The strategic vision for the combined company emphasizes a robust commitment to traditional cinema alongside its digital evolution. The new entity plans to produce a minimum of 30 feature films every year, guaranteeing a global theatrical release window of at least 45 days for each title. This approach aims to preserve the theatrical experience even as the company integrates its primary streaming platforms, HBO Max and Paramount+. While the merger is moving forward, the final closing is not expected until the third quarter of 2026, pending necessary regulatory approvals and a shareholder vote scheduled for early spring 2026.

Despite the board's approval, the merger faces significant scrutiny from regulatory bodies, including the European Commission and several U.S. state authorities. California Attorney General Rob Bonta has emphasized that the investigation is ongoing, stating his office intends to be "vigorous" in its review and noting that the deal "has not happened yet." Similarly, Senator Adam Schiff has called for the highest level of oversight to ensure the process remains free from White House political influence. From a market perspective, HSBC analyst Mohammed Hallouf suggested that Netflix’s exit might allow it to sharpen its focus while its rivals navigate a complex integration. Meanwhile, Ellie Peers, General Secretary of the Writers' Guild of Great Britain, raised concerns regarding the impact of such mega-mergers on industry competition and the welfare of content creators.