Paramount Skydance Corp (PSKY.US) announced on Monday its plan to merge its Paramount+ and HBO Max streaming services into a single platform following the completion of its $110 billion acquisition of Warner Bros. Discovery (WBD.US). The company further disclosed that the acquisition, formally signed on February 27, is expected to be finalized in the third quarter of this year.
In a Monday investor call, company leadership stated there are no current plans to reduce production output, emphasizing that the transaction is "beneficial for market competition, consumer rights, and the development of the creative community." The strategic goal for Paramount Skydance Corp was outlined: each studio under the combined entity will aim to produce 15 theatrical films annually, with an overall annual output of at least 30 films. "This is not merely a simple resource integration, but a fundamental reshaping of the business model," the leadership emphasized.
As of Monday's market close, Paramount Skydance Corp's stock fell 1.26% to $13.34. The Chief Financial Officer disclosed financial projections for the merged company for 2026, anticipating pro forma revenue of approximately $69 billion, EBITDA of around $18 billion, and a target for consolidated net debt to be managed at $79 billion.
Regarding the streaming service integration, it was clarified that while the Paramount+ and HBO Max platforms will be merged into a single service, the HBO brand will be retained. It was noted that the two platforms currently boast a combined total of over 200 million direct-to-consumer (DTC) subscribers across more than 100 countries and territories. "This scale enables us to compete effectively with leading streaming services in the current market," it was stated.
The strategic value of the combined company's sports assets was highlighted, including broadcasting rights for top-tier events such as the NFL, UFC, NCAA "March Madness" basketball tournament, PGA Tour, and the European Olympic Games. It was specifically added that a long-term, $7.7 billion agreement secured last summer with the UFC grants the company flexibility to broadcast the events on Warner Bros.'s TNT network, further strengthening the synergy within the sports content ecosystem.
It was revealed that the merged company has no plans to divest its cable television networks. Had Warner Bros. sold its streaming and production business to Netflix (NFLX.US), Warner Bros. would have spun off its cable networks into a separate entity named Discovery Global. Comcast (CMCSA.US) recently completed a similar spin-off, separating some of its cable networks into a new company named Versant Media Group Inc.
Previously, after months of effort aimed at acquiring the renowned Hollywood studio Warner Bros. Discovery and its associated assets—including core channels like HBO, CNN, and TNT—Paramount Skydance Corp ultimately prevailed in a fierce bidding war against Netflix. The agreement was reached to acquire Warner Bros. Discovery for $31 per share in cash. To secure the deal, Paramount Skydance Corp progressively increased its offer from an initial bid of $19 per share made last September.
According to the agreement terms, Paramount Skydance Corp paid Netflix a termination fee of $2.8 billion. The agreement also stipulates that Paramount Skydance Corp will pay Warner Bros. a reverse termination fee of $7 billion if the deal fails to receive regulatory approval.
Regarding the transaction timeline, the Chief Operating Officer indicated that a shareholder meeting to vote on the deal is expected to be convened in the spring. To address potential delays, the agreement includes a "ticking fee" mechanism: if the transaction is not completed by September 30, Paramount Skydance Corp will pay Warner Bros. shareholders a quarterly delay compensation of $0.25 per share.
Detailing the financing structure, Paramount Skydance Corp disclosed that $47 billion in equity financing, backstopped by the controlling shareholder family and RedBird Capital Partners, is secured. The controlling shareholders and their partners will subscribe to new shares of Paramount Skydance Corp at a price of $16.02 per share. Existing Paramount Skydance Corp investors will receive rights to participate in the offering, which is expected to raise up to an additional $3.25 billion. For debt financing, the company plans to obtain a $54 billion syndicated loan from a consortium including Bank of America, Citigroup, and Apollo Global Management.
"This is a landmark moment in the histories of both companies," the leadership concluded. "By integrating our iconic studios, globally complementary streaming platforms, cable and linear network assets, and world-class IP libraries, we will collectively shape the new landscape of the future media and entertainment industry, creating a truly next-generation media and entertainment giant."
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