combined company

Paramount, Warner Bros. will be named Skydance after merger

David Ellison said the merged Paramount and Warner Bros. Discovery will be called Skydance — the moniker he picked nearly two decades ago when the tech scion began building his Hollywood empire.

Ellison, currently the chairman and chief executive of Paramount, is aiming to finalize the acquisition of Warner Bros. Discovery by Tuesday. Then the combined company will assume the name and logo of his once small studio.

“We chose this name for a few important reasons,” Ellison wrote Friday in an X post. “As we bring Paramount and Warner Bros. together, we wanted to preserve what has made each of these studios iconic. Both have distinct identities, extraordinary legacies and brands that have resonated with audiences … We never wanted a new corporate identity to diminish, alter or overshadow either one.”

By calling the company “Skydance,” Ellison said the merged entity would have “an identity of its own while allowing Paramount and Warner Bros. — and all our extraordinary brands — to remain in the spotlight.”

In Hollywood, there had been much speculation over what jumbled mash-up of the corporate titles would be used, with WarnerMount and Paramount-Warner Bros. often mentioned as possibilities.

Both companies boast century-old studios, beloved media brands and a recent past that has included several fraught mergers. When AT&T sold WarnerMedia to David Zaslav’s Discovery in 2022, he selected Warner Bros. Discovery as the corporate name.

The merger is quickly reaching the finish line after U.S. District Judge Araceli Martínez-Olguín on Wednesday signed a settlement agreement, effectively ending an antitrust lawsuit brought in July by California Atty. Gen. Rob Bonta and 11 other state attorneys general who initially fought the formation of a new Hollywood colossus. Paramount now has won approvals by nearly 70 regulators for the industry-reshaping deal.

For more than a decade, Paramount has been the smallest of the major media companies, owning CBS, Comedy Central, BET, Nickelodeon and the Melrose Avenue studio. With the $111-billion merger with Warner, Skydance will gain more valuable assets including HBO, CNN, TBS, Food Network and Warner Bros. film and television studios, along with their massive libraries that include the Harry Potter, “Lord of the Rings,” and DC Comics franchises.

Earlier this week, Ellison announced he was bringing Ynon Kreiz, who has served as the CEO of toymaker Mattel for eight years, to run the new entity’s day-to-day operations. Kreiz, 61, brings years of operational experience that Paramount’s top executives had lacked.

Paramount released details of Kreiz’s contract on Thursday in a regulatory filing, saying he would receive an $5 million annual salary and an annual target bonus of $4.9 million. He will also qualify for a signing bonus of $31.5 million to come over to the new company, paid through restricted stock units.

In addition, HBO Chairman Casey Bloys is widely expected to become head of the merged company’s streaming programming. Paramount’s streaming chief Cindy Holland exited the company earlier this week to make way for Bloys.

During a Thursday appearance at the Bloomberg News Screentime media conference in Hollywood, Bloys declined to discuss his presumed new role. But he suggested that that Ellison’s company might bundle HBO Max and Paramount+ services, allowing the two services to remain for now, rather than try to fold them into one gigantic offering.

Skydance will carry than $80-billion in debt, much of it acquired to retire the holdings of Warner Bros. Discovery investors at $31.17 a share. The company also has promised investors that it would find $6 billion in cost-cuts within three years.

During a separate appearance at the Bloomberg conference, RedBird Capital Partners founder Gerry Cardinale, a Paramount investor and board member, said finding $6 billion in cuts would be relatively easy, and would not be focused solely on layoffs. It would include combining the technology stacks for the various streaming platforms.

But Cardinale acknowledged layoffs would be part of the cost-cuts, a prospect that frightened many in Hollywood after endless waves of job cuts at the two companies.

Warner’s outgoing chief executive Zaslav will leave with a golden parachute valued at about $887 million, which includes cash, stock and options valued at more than $550 million, according to regulatory filings.

In addition, Warner board members separately agreed to pay Zaslav’s tax bills, which could approach $330 million.

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Judge holds off on ruling in states’ antitrust Paramount settlement

A federal judge declined Thursday to rule immediately on a proposed settlement between Paramount Skydance and 12 state attorneys general, leaving the last major legal hurdle to the studio’s $111-billion acquisition of Warner Bros. Discovery unresolved for now.

U.S. District Judge Araceli Martínez-Olguín did not indicate how she would rule, but said she wanted more information before deciding whether to approve the proposed consent decree, a court-enforceable agreement that would allow the merger to proceed under certain conditions..

“I’m not the only one who has some questions for you all. There’s lots of interest,” said Judge Martínez-Olguín. “I appreciate people are interested, but I also want to make sure that I have everything that I’m going to consider in front of me.”

The judge said she would issue a ruling “in due course.”

The hearing comes three days after California Atty. Gen. Rob Bonta announced that the two sides had reached an agreement.

It requires the combined company to release at least 30 films in theaters each year, commit at least an additional $1.5 billion to domestic film production and set aside $47.5 million for workers affected by the merger.

“When theater owners have publicly said that supply is the problem, those are voices that carry weight because they’re in the market,” said Paula Blizzard, an attorney for California, during the hearing. “They are the people we’re trying to protect — the businesses and the competition that we are trying to protect.”

The settlement proposal also includes stipulations on how basic cable channel negotiations must proceed, creates a board intended to protect the editorial independence of CBS News and CNN, and bars Paramount from selling or closing its Melrose Ave. lot or Warner Bros.’ Burbank lot while requiring the company to operate them “in a manner consistent with past practices.”

An independent monitor will oversee the settlement implementation. The agreement, if approved by the judge, will be in effect for five years.

“Paramount wants to get to work. Paramount is doing this deal because it wants to compete. Netflix, Amazon, Disney are far larger streaming undertakings,” said Josh Holian, an attorney for Paramount, during the hearing. “Paramount believes that a transaction like this can be transformative in fueling its ability to compete in that market.”

Before ending the hearing, Judge Martínez-Olguín assigned the parties several tasks, which included addressing a letter from U.S. Senator Cory Booker (D-N.J.) who echoed some concerns about the proposal.

Booker, the top Democrat on the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, asked the judge to conduct an “independent public-interest review” before approving the settlement agreement. Because the U.S. Justice Department closed its investigation of the Paramount-Warner Bros. merger without seeking any remedies, Booker argued, the proposal is “the only enforceable instrument that will govern” the combined company.

Martínez-Olguín asked the parties to submit their responses to Booker’s letter by Monday, Sept. 28 at noon.

Warner Bros. Discovery Chief Executive David Zaslav had told staff earlier this week that he expected the deal to close no later than early October.

The settlement has divided Hollywood, with some saying Bonta bowed to political pressure from Los Angeles Mayor Karen Bass and California Gov. Gavin Newsom. During negotiations, Paramount threatened to move its studio out of state, which Newsom said he took seriously.

After the proposed settlement was announced, Paramount Chief Executive David Ellison said the combined company would remain in L.A.

Many in Hollywood are concerned about the threat of layoffs from the merger. Paramount has told Wall Street it plans to make more than $6 billion in cost cuts. A recent report commissioned by L.A. County estimated that 4,500 jobs could be lost over three years.

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California deal on Paramount-Warner Bros. merger spurs frustration

California Atty. Gen. Rob Bonta’s deal to allow the $111-billion Paramount-Warner Bros. merger to proceed was struck amid political pressure from state leaders and concern from some Democratic attorneys general that concessions from the studio fell short, according to multiple sources familiar with the negotiations.

As recently as this weekend, New York Atty. Gen. Letitia James and Connecticut Atty. Gen. William Tong — who had signed on to the lawsuit — had said they needed more concessions, according to three knowledgeable sources close to the negotiations.

In an interview with The Times on Tuesday, Tong said Bonta was “doing his very best in very difficult circumstances” to steer the coalition to a favorable outcome, but amid “a lot of political pressure” from others in California that “did not help.”

“I’m not going to sugarcoat it. This is ultimately not what I wanted,” Tong said.

Tong said one of his chief concerns — shared by others in the 12-member coalition of states — was with the merger’s consolidation of CNN and CBS News under Paramount Skydance Chief Executive David Ellison, the billionaire media mogul close to President Trump and son of Oracle co-founder and Republican mega-donor Larry Ellison.

Tong raised similar concerns after the announcement of the deal, when he said publicly that his state had “led the fight to the bitter end to protect the editorial independence of CNN and CBS News,” and that he was “deeply disappointed that we could not do more.”

Paramount declined to comment.

With its economy and global reputation heavily intertwined with Hollywood’s allure and ability to survive, California had more at stake in the negotiations.

In exchange for the states lifting their antitrust challenge, Bonta said Monday that the studio had agreed to either produce 30 or more films annually for the first five years of the combined company or divest the Miramax film studio; separately negotiate basic channel agreements for Paramount and Warner Bros. or divest from major cable channels; spend $300 million more each year on film production in the U.S.; maintain its Melrose Avenue and Burbank lots; and establish a board to ensure editorial independence at CNN and CBS News, which also fall under the merger.

Bonta said the deal has “real teeth,” and that he “will hold Paramount accountable” moving forward.

Since then, however, other Democrats have voiced less confidence, and some in the coalition believed they could have held out for better terms as the midterm elections approached.

Some also questioned whether Bonta and other California leaders were swayed by Ellison’s threat to move Paramount out of the state.

Gov. Gavin Newsom, Los Angeles Mayor Karen Bass and Xavier Becerra — the front-runner in the race to succeed Newsom as governor — had all urged Bonta to settle the case. In his initial statement on the deal, Ellison thanked the Democratic attorneys general for working through their differences, but also thanked Newsom for “his support throughout this process.”

Sen. Cory Booker (D-N.J.), the ranking Democrat on the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, said Bonta and the other state attorneys general “took on one of the most powerful media companies in the world, a company backed by the full weight of the White House,” and that Paramount had answered “with what amounted to extortion” by threatening to withdraw from California if the deal was blocked.

Booker claimed the merger remains illegal and questioned the independence of any editorial board picked by and reporting to Ellison — saying it would not stop him from making “sweeping changes at CNN” to please Trump.

“This is what happens when federal enforcers abandon their posts. States are left to carry the fight alone, and even the strongest state enforcers cannot outlast a company willing to say anything and spend anything,” Booker said. “That is not justice. That is a price tag.”

Dissent before the deal

The pace of the negotiations, which had been on-again, off-again for weeks, quickened last week, and Bonta’s office had reached a deal with Paramount by Friday, sources said.

But there was a last-minute hiccup: Some members of the coalition felt the deal fell considerably short of what they had been seeking.

Among other things, James was dismayed that the Writers Guild of America — which had separately sued to block the deal — hadn’t been brought into the negotiations. She pushed to include the WGA and to bolster Paramount’s commitment to the WGA’s health and pension fund.

Over the weekend, Paramount agreed to increase its health fund commitment from $10 million to $17.5 million. Still, the WGA had largely been shut out of the process, and said Monday that it continued to “believe the merger will cause damage to writers and the industry at large.”

One source familiar with the negotiations said the states had four separate votes against settling on Sunday, but the resistance eventually crumbled with word that the WGA was backing out of the fight. Two sources familiar with the matter said some in the coalition were caught off guard by the speed with which Bonta’s “tone” changed and the deal was reached. Some had felt Paramount may be more inclined to grant concessions once it had to start increasing its payout to Warner Bros. investors starting Oct. 1.

On Tuesday, Bonta told The Times that he would not comment on “what specifics led up to” the deal, except to note that all 12 state attorneys general in the coalition signed on to it.

“It was unanimous, and I’ll leave it at that,” he said.

Bonta said there was certainly “a lot of interest” in the case from other elected officials, some of whom made their positions clear, but that “none of it had any influence” on him.

“I need to look at the law and the facts,” he said. “If we’re able to get a solution to our antitrust concerns, we take it.”

Bonta said he could not comment on what effect Ellison’s threats to move Paramount out of California might have had on his decision and that his “focus was on the antitrust concerns” — which he believes the deal substantially addresses.

A source close to the governor’s office said Newsom communicated frequently with Bonta and Ellison, acted as an unofficial mediator and urged them to reach a resolution, but did not try to control the terms of the deal and respects Bonta’s role as the state’s independently elected law enforcement leader. Newsom appointed Bonta as California’s attorney general in 2021 after Becerra, who was serving in that post, accepted a position in President Biden’s cabinet. California voters elected Bonta as attorney general in 2022.

The source said Newsom wanted the two sides to settle the case because he was concerned that the state could face protracted litigation, ultimately lose in court and end up with nothing. Paramount leaving California for Nashville — a destination floated by Ellison — also would have been an economic blow to the state.

Newsom has tried to keep businesses headquartered in the state due to the economic and budgetary impacts of losing companies and their wealthy chief executives to other places, and recently signed legislation to create a new post-production tax credit for studios. Last year, he doubled the state’s existing film and television tax credit in an effort to support the industry.

Mixed reaction

Newsom and many of Bonta’s fellow attorneys general echoed his claims of victory.

James said the deal “will allow the film and television industry to continue to thrive with more movies produced in America and $1.5 billion of new investment in film production.” Oregon Atty. Gen. Dan Rayfield said it “keeps real competition in place, ensures that productions will continue, and ensures journalistic independence.” Arizona Atty. Gen. Kris Mayes said it would protect businesses, including local movie theaters. Colorado Atty. Gen. Phil Weiser said it would protect “moviegoers and producers.”

In a statement, Newsom thanked Bonta for his work to reach the deal, which he called “a practical path forward” that “protects California jobs while putting a safeguard in place to help preserve editorial independence for two of America’s most important news organizations.”

Still, it was clear that others viewed the deal as a partial win at best.

New Mexico Atty. Gen. Raúl Torrez called it a “great first step.” Massachusetts Atty. Gen. Andrea Joy Campbell said the states were “unable to secure every protection we fought for,” and that she “would have liked to see more.” Minnesota Atty. Gen. Keith Ellison stressed that the deal should not be seen as an endorsement of the merger.

“I believe mergers like this are never done with the best interests of consumers, workers and small businesses in mind and are instead designed to help a select few get richer,” he said.

Some outsiders were even more forthright with their skepticism. Rich Greenfield, a longtime media analyst, called the deal a “slam dunk win” for Paramount because it didn’t require the company to sell off any assets. Norm Eisen, co-founder of the Democracy Defenders Action group, said the “so-called independence board” to oversee CNN and CBS News “appears to be sorely lacking in independence.”

Bonta said the deal does set out structural divestment remedies if Paramount does not follow its other terms — including by requiring it to sell off Miramax if it doesn’t produce enough films, and to sell off BET, VH1, Comedy Central and other channels if it doesn’t negotiate cable agreements for Paramount and Warner Bros. separately.

He said that if the state had held out and gone to trial on its antitrust arguments, it would not have been able to negotiate any journalistic oversight for CNN and CBS, whereas the “creativity and flexibility of settlement” allowed them to establish the oversight panel.

“Does that transform our information ecosystem broadly, to make sure that there’s no more misinformation or disinformation? No. Does it make sure that all broadcast news and cable channel news organizations are only telling fair, fact-based, independent, objective news? No. Does it even ensure that happens every single time at CBS News or CNN? No,” Bonta said. “Does it improve the likelihood, vastly, significantly, that that outcome will occur? It does.”

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