Earlier this year, the streaming and entertainment industry witnessed one of the most risky mega-deals in history, shocking industry observers. Not only did the transaction set a record for its scale, but it was also seen as potentially disrupting the existing landscape of Hollywood and the broader media industry.
After years of carrying tens of billions of dollars in debt, alongside pressure from declining cable viewership and intense competition in the streaming market, Warner Bros. Discovery (WBD) has been considering major strategic adjustments, including selling its entertainment assets to one of its competitors.
Several major players saw an opportunity to acquire this media giant. In December, Netflix announced it would acquire WBD’s production studio and streaming business for $82.7 billion.
But at the last minute in late February, Paramount, led by David Ellison, unexpectedly won the bidding war by offering $111 billion to acquire all of WBD’s assets, including its studios, HBO, streaming platforms, games, and television networks such as CNN and HGTV. Paramount had recently been acquired under Ellison’s leadership and received strong support from his father, Larry Ellison, chairman of Oracle and the sixth-wealthiest person in the world, as well as a major donor to Trump.
Paramount's offer received approval from the U.S. Department of Justice (DOJ) in June. Subsequently, a federal judge paused the transaction on July 13 after a coalition of 12 state attorneys general filed a lawsuit. However, the judge approved the deal in late September, and the acquisition was officially completed on October 6.
Below is a detailed breakdown of what happened and what might happen next.
What has happened so far?
All of this began in October 2025, when Warner Bros. Discovery disclosed that it was considering a potential sale following unsolicited acquisition proposals from several major players in the industry.
The bidding process quickly intensified, with Paramount and Comcast emerging as the main contenders, with Paramount initially seen as the frontrunner.
However, the WBD board ultimately concluded that the offer from streaming giant Netflix was the most attractive. Netflix proposed to acquire Warner’s film, television, and streaming assets for $82.7 billion.
The bidding war has officially begun. Paramount believes its offer of approximately $108 billion to acquire all of Warner’s assets is superior to Netflix’s proposal, which focuses only on the studio and streaming business. To make the deal more attractive, Netflix amended the agreement in January to offer an all-cash bid of $27.75 per share for Warner Bros. Discovery, further reassuring investors and paving the way for the transaction to move forward.
Paramount continues to pursue an acquisition of WBD. However, the Warner Bros. Discovery board has repeatedly rejected its proposals, citing concerns over Paramount’s heavy debt burden and the increased risks associated with its offer, including reservations about the investor group backing Paramount’s bid—comprising sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi. The board noted that Paramount’s offer would leave the combined company with $87 billion in debt, a risk it was unwilling to assume at the time.
In January, Paramount filed a lawsuit seeking more information about the Netflix deal. A month later, the company attempted to improve its offer by announcing a "ticking fee" of $0.25 per share per quarter payable to WBD shareholders if the transaction fails to close by December 31, 2026. Paramount also stated it would pay a $2.8 billion breakup fee if Warner Bros. Discovery exits the Netflix transaction.
Subsequently, in a final push to secure the deal, Paramount raised its offer to $31 per share in February, prompting WBD’s board to extend negotiations with Paramount, viewing it as the superior offer. Netflix declined to increase its bid and withdrew from the negotiations.
Netflix Co-CEOs Ted Sarandos and Greg Peters stated in a statement on February 26: “The deal we negotiated would have created value for shareholders and had a clear path to regulatory approval. However, we have remained disciplined, and given the need to match Paramount Skydance’s latest offer price, the transaction no longer offers financial attractiveness; therefore, we have decided not to match Paramount Skydance’s offer.”
In addition to Paramount’s existing billions of dollars in debt, the company will assume approximately $33 billion in debt from Warner Bros. Discovery under the agreement. The transaction will be supported by $54 billion in debt commitments from Bank of America, Merrill Lynch, Citibank, and Apollo Global Management, along with $45.7 billion in equity funding from Larry Ellison.
Regulatory barriers and other concerns
In addition to the significant financial burden of assuming massive debt, Paramount faces multiple other challenges in this transaction.
First, Ellison has warned that large-scale layoffs are expected soon. Critics have also widely expressed concerns that this deal could lead to job losses and wage reductions.
Ellison is also controversial within the industry. Outsiders believe that under his leadership, CBS News has shown sympathy and support for the Trump administration; his father, Larry Ellison, is a major donor to Trump. Under Ellison’s control of Paramount, reports critical of the government are said to have been shelved or subjected to stricter scrutiny by Ellison himself and Bari Weiss, the conservative provocateur he appointed to lead CBS News.
This has also raised concerns among some employees at CNN, owned by Warner. Trump himself previously demanded concessions from news outlets critical of him, including CBS paying a $160 million settlement before the FCC approved Ellison’s acquisition of Paramount. Before Netflix exited the deal, Trump pressured the company to remove former Biden White House official Susan Rice from its board. He publicly stated his desire for CNN to “behave” under new ownership.
Regulatory scrutiny is also a major hurdle. Such a large-scale merger naturally attracts the attention of lawmakers.
For example, on February 26, California Attorney General Rob Bonta stated: "These two Hollywood giants have not yet passed regulatory review—the California Department of Justice is still investigating, and we will examine them rigorously."
One day before Netflix's exit, a coalition of 11 state attorneys general urged the U.S. Department of Justice to review the merger, citing concerns that it would stifle competition and drive up subscription prices. Months earlier, U.S. Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal had also expressed concerns to the DOJ’s antitrust division, warning that such a massive merger could have serious consequences for consumers and the broader industry. The three senators believed the deal could grant the new media giant excessive market power, enabling it to raise prices for consumers and suppress competition.
Although the Department of Justice approved the transaction in June, a coalition of 12 state attorneys general filed a lawsuit on July 13 seeking to block the merger. The lawsuit alleges that the deal would reduce competition and harm movie theaters, cable distributors, and consumers. The coalition is led by Bonta and includes Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.
In response, U.S. District Judge Araceli Martínez-Olguín ordered a 14-day suspension.
What now?
As of October 6, Paramount and Warner Bros. have officially been renamed Skydance, and the newly merged company is expected to generate annual revenue of nearly $70 billion.
In terms of streaming services, Paramount+, HBO Max, and Discovery+ will eventually merge.