Merged Paramount WBD commits to cinema, paid VOD and licensing
Paramount Skydance and Warner Bros. Discovery (WBD) have promised to maintain both their studios after the two companies merge.
They have also committed to at least 15 theatrical feature films per year per studio, each of which will receive a full theatrical release, with a minimum 45-day global window before becoming available on paid VOD, and then on a combined streaming platform.
Films will still be licensed to third-party distribution partners.
The two companies have entered into a definitive merger agreement under which Paramount will acquire WBD.
Netflix withdrew its own offer for Warner Bros. Discovery when WBD’s Board of Directors officially deemed the Paramount Skydance bid a ‘Superior Proposal’.
The aim is to create a premier direct-to-consumer streaming giant that can compete more effectively with Netflix, Disney+, and Prime Video. The two companies believe this is good for competition.
Highly competitive D2C business
“The combination of Paramount+, HBO Max and Pluto creates a highly competitive D2C business that expands both consumer choice and opportunities for creative talent and labour,” they state.
An investor statement says the complementary portfolio of cable networks (spanning entertainment, sports and news) will “significantly improve cash flow” for this part of the business and unlock operational efficiencies.
“It will strengthen our ability to manage linear market pressures. It also creates a more compelling, unified platform for advertisers through integrated cross-channel sales and activation opportunities.”
The deal will be used to streamline technology across the new business. Priorities include a stronger infrastructure backbone and improved user interface.
Paramount Skydance and WBD say the new company will invest in expanding their respective creative engines, “prioritising the attraction and retention of world-class creative talent.”
The new company will remain an active buyer of content from third-party studios and independent producers.
The statement says: “The pro forma balance sheet and cash flow will enable continued investment in growth initiatives.
“The combined company’s resources and backing of Paramount’s committed investors will support increased investment in content generation.”
David Ellison, chairman and CEO of Paramount (a Skydance Corporation), says: “From the very beginning, our pursuit of Warner Bros. Discovery has been guided by a clear purpose: to honour the legacy of two iconic companies while accelerating our vision of building a next-generation media and entertainment company.
“We will create even greater value for audiences, partners and shareholders – and we couldn’t be more excited for what’s ahead.”
The new company will boast film and television studios, streaming and linear platforms plus an impressive intellectual property portfolio that includes Game of Thrones, Mission Impossible, Harry Potter, Top Gun, the DC Universe and SpongeBob SquarePants.
15,000-strong film library
The combined company will own a film library of its own, boasting more than 15,000 titles.
Combined sports rights will include the NFL, the Olympics, the UFC, the PGA Tour, the NHL, and the Champions League. The companies point to consumer benefits from having more sports content in one place.
David Zaslav, president and CEO of Warner Bros. Discovery, says: “I’m very pleased with the outcome we achieved for WBD shareholders and the entertainment industry.
“Our guiding principle throughout this process has been to secure a transaction that maximises the value of our iconic assets and our century-old studio while delivering as much certainty as possible for our investors.
“We look forward to working with Paramount to complete this historic transaction.”
Paramount will acquire 100% of WBD for $31 per share in cash, plus a ‘ticking fee’, valuing WBD at $81bn in equity value and $110bn in enterprise value.
The transaction has been unanimously approved by the Boards of Directors of both companies.
The deal is expected to close in Q3 2026, subject to customary closing conditions, including regulatory clearances and approval by WBD shareholders (with their vote expected in the early spring of 2026).
The transaction is funded by $47bn in equity, fully backed by the Ellison Family and RedBird Capital Partners.