Earlier this year, the streaming and entertainment industries witnessed one of the most risky and substantial transactions in history, shocking industry observers. Not only did the transaction set a new record in terms of scale, but it was also seen as potentially capable of disrupting the existing landscape of Hollywood and the entire media industry.

After years of carrying billions of dollars in debt at Warner Bros. Discovery ( Warner Bros . Discovery , WBD ), while also facing the pressures of declining cable television ratings and fierce competition from streaming platforms, the company has been considering major strategic adjustments, including selling its entertainment assets to one of its competitors.

Several major players have taken a keen interest in the opportunity to acquire this media giant. In December, Netflix announced that it would acquire WBD's production studio and streaming services for $82.7 billion.

But at the last moment in late February, Paramount, led by David Ellison, unexpectedly won this bidding war, proposing to acquire all the assets of WBD for $111 billion, including the film studio, HBO, streaming platforms, games, as well as television networks such as CNN and HGTV. Paramount had recently undergone a change of ownership under the acquisition by Ellison and received strong support from its father, Larry Ellison. Larry Ellison is the chairman of Oracle, the sixth richest person in the world, and also an important donor to Trump.

The bid for Paramount was approved by the U.S. Department of Justice ( DOJ ) in June. Subsequently, a federal judge suspended the transaction on July 13 following a lawsuit filed by an alliance of attorneys general from 12 states. However, the judge approved the transaction in late September, and the acquisition was officially completed on October 6.

The following will detail the course of events and what may happen next.

What has happened so far?

It all began in October 2025 when Warner Bros. revealed that, after receiving proactive acquisition interests from several major players in the industry, the company was considering a potential sale.

The bidding process quickly became intense, with Paramount and Comcast becoming the main competitors, while Paramount was initially regarded as the leader.

However, the WBD Board of Directors ultimately deemed that the offer from the streaming giant Netflix to be the most attractive. Netflix proposed to acquire Warner's film, television, and streaming assets for $82.7 billion.

Thus, the bidding war officially commenced. Paramount believed that its offer of approximately $108 billion to acquire all of Warner's assets was more attractive than Netflix's proposal, which focused solely on the studio and streaming media businesses. To make the deal more appealing, Netflix revised the agreement in January to propose a cash-only offer of $27.75 per share for the acquisition of Warner Bros. Discovery, which further reassured investors and paved the way for the transaction to proceed.

Paramount continues to strive for the acquisition of WBD. However, Warner's board of directors has repeatedly rejected its proposals, citing concerns about the heavy debt burden of Paramount and the higher risks associated with its plan. These concerns also include fears regarding the group of investors supporting the bid from Paramount, which includes sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi. The board pointed out that Paramount's offer would result in the merged company incurring $87 billion in debt, a risk that they were not willing to take at that time.

In January, Paramount filed a lawsuit, requesting more information regarding the Netflix transaction. A month later, the company attempted to improve its offer, announcing that if the transaction was not completed by December 31, 2026, it would pay WBD shareholders an “incremental fee” of $0.25 per share per quarter ( ticking fee ). Paramount also stated that if Warner withdrew from the transaction with Netflix, it would pay a severance fee of $2.8 billion.

Subsequently, in a final bid to secure the deal, Paramount raised its offer to $31 per share in February. This prompted the board of directors of WBD to extend negotiations with Paramount, considering it a more favorable offer. Netflix refused to continue raising the price and withdrew from the negotiations.

Co-CEOs Ted Sarandos and Greg Peters stated in a statement on February 26: "The transaction we negotiated could have created value for shareholders, and there was a clear path for regulatory approval. However, we maintained discipline, and at the price level required to match Paramount Skydance's latest offer, this transaction no longer held financial appeal. Therefore, we decided not to pursue Paramount Skydance's offer."

In addition to the billions of dollars in debt already borne by Paramount, according to the agreement, the company will also assume approximately $33 billion in debt from Warner Bros. Exploration. The transaction will be supported by debt commitments of $54 billion provided by Bank of America, Merrill Lynch, Citibank, and Apollo Global Management, as well as $45.7 billion in equity funding provided by Larry Ellison.

Regulatory barriers and other concerns

In addition to the significant financial burden of undertaking huge debts, Paramount also faces multiple other obstacles in this transaction.

Firstly, Ellison has warned that large-scale layoffs are expected in the near future. Critics also generally worry that this transaction may lead to job losses and wage reductions.

Ellison is also quite controversial within the industry. It is believed that under his control, CBS News has shown sympathy and support for the Trump administration; moreover, his father, Larry Ellison, is an important donor to Trump. Under Ellison's control of Paramount, reports criticizing the government are said to be put on hold or subjected to stricter scrutiny by Ellison himself and the person he appointed as head of CBS News, a conservative provocateur named Bari Weiss.

This has also raised some concerns among the employees of CNN under Warner. Trump himself once demanded concessions from the news departments that criticized him, including that CBS pay a $16 million settlement to them before FCC approved the acquisition of Paramount by Ellison. Before Netflix withdrew from the deal, Trump also pressured the company to remove former Biden White House official Susan Rice from the board of directors. He publicly stated that he hoped to make CNN "obedient" under the new owners.

Regulatory review is also a major obstacle. Such a large-scale merger and acquisition naturally attracts the attention of legislators.

For example, California Attorney General Rob Bonta stated in a statement on February 26: “These two Hollywood giants have not yet passed regulatory scrutiny – the California Department of Justice is still conducting an investigation, and we will review them with a strict attitude.”

One day before the exit of Netflix, an alliance composed of attorneys general from 11 states urged the U.S. Department of Justice to review this merger, citing concerns that it would suppress competition and drive up subscription prices. In the months prior, U.S. senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal had also expressed their concerns to the DOJ's antitrust division regarding this matter, warning that such a large-scale merger could have serious consequences for consumers and the entire industry. The three senators believed that this transaction could grant the new media giant excessive market power, allowing it to raise prices for consumers and suppress competition.

Although the Department of Justice approved the transaction in June, an alliance of attorneys general from 12 states filed a lawsuit on July 13 in an attempt to block the merger. The lawsuit claimed that the transaction would weaken competition and harm the interests of cinemas, cable distributors, and audiences. The alliance was led by Bonta, with Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington also joining in.

In response, Judge Araceli Mart í nez-Olgu of the United States issued an order to suspend for 14 days.

So now?

As of October 6th, Paramount and Warner Bros have officially been renamed Skydance. The annual revenue of this new merged company will approach 70 billion US dollars.

In terms of streaming media services, Paramount+, HBO Max and Discovery+ will ultimately merge.