Skydance's $111bn Warner merger closes with five-year film and cable pledges

The merger closed on 6 October

Paramount Skydance completed its $111 billion merger with Warner Bros. Discovery on 6 October, after Supreme Court Justice Elena Kagan rejected a last-ditch effort to block the deal [8]. The post-merger company takes the name Skydance, from a firm Paramount bought in a separate deal last year [8].

The new owner holds CBS and CNN, Paramount+ and HBO Max, and the CBS Sports and TNT Sports portfolios [8]. The state lawsuits and the FCC review were meant to answer that concentration. The promises that settled both run on a five-year clock that started at closing [8][9]. Judge Araceli Martinez-Olguin approved the states' settlement on 30 September, calling it "a reasonable factual and legal resolution of the dispute" [8].

In July the same judge had ruled that the combination would likely reduce competition substantially and violate antitrust laws [8].

She wrote then that a settlement "does not fully remediate an alleged violation" and "reflects a compromise of the claims short of full adjudication" [8]. She said the settlement addresses film distribution through minimum investment and release thresholds. It also addresses cable licensing through required separate negotiations for the two companies' basic cable holdings [8]. Paramount has said it expects more than $6 billion in cost savings from the merger, a figure that points at payroll rather than output [5].

The FCC let foreign funds past the 25% cap

On 17 September the FCC granted Paramount's request to let foreign investors hold 49.5% of the merged company [3][11]. Congress set a 25% limit on foreign ownership of companies holding US broadcast licences, unless the commission finds that a bigger stake serves the public interest [3][7]. Paramount owns CBS and 28 television station licences granted by the FCC, which is why the ownership question reached the agency at all [4].

Three Gulf funds account for 38.5% of the equity: Saudi Arabia's Public Investment Fund 15.1%, the UAE fund 12.8%, and the Qatar Investment Authority 10.6% [7]. Together they committed close to $24 billion to the deal, with the Saudi PIF taking roughly $10 billion [4][7]. Paramount's April filing put total foreign ownership at 49.5% and asked the FCC to authorise up to 100% foreign equity in its broadcast licensees [2].

The Media Bureau granted the petition. The three-member commission did not vote on it [3].

The order, signed by video division chief David Brown, said the foreign investors "will not have any influence, direction, or control over" Paramount's content decisions or non-public US person data [3]. It also gave non-controlling foreign investors advance approval to raise their indirect stakes up to 20% [7]. Commissioner Anna M. Gomez, the lone Democrat on the commission, said the agency "just let some of the most repressive governments in the world indirectly control nearly all of a combined Paramount-Warner Bros" [3].

What the states extracted

California and 11 other states sued to stop the deal. California settled last month and the others went along with the compromise [8].

The five-year settlement requires at least 30 films a year for the first two years. It requires 32 a year for the next three, with at least four independent films each year [9]. Paramount must spend at least $1.5 billion more on US film production over five years than it spent in 2025 [9]. It will put $25 million into a fund to buy independent films. Missing the annual targets could force a sale of Miramax and cost $30 million for each missed film [9].

A separate $47.5 million fund covers training and career development for workers displaced by the merger [9].

The Writers Guild settled its own case on terms that bar writer layoffs at CBS News Broadcast for five years and put $17.5 million into the guild's health fund [9]. The settlement also requires a board intended to protect editorial independence at CBS and CNN, and separate negotiations for the two companies' basic cable channels for five years [9].

Free speech and media advocacy groups urged the judge to reject the deal, saying it gives residents of the suing states "virtually nothing" [8].

The gift question the review left open

ProPublica reported on 15 July that Commissioner Olivia Trusty accepted tickets from Paramount worth more than $12,000 to the December 2025 Kennedy Center honors gala [1]. She had voted five months earlier to approve Paramount's $8 billion merger with Skydance [1].

FCC Chair Brendan Carr and his wife sat in a private skybox with Paramount CEO David Ellison at the same event, where such seats sold for $125,000 a ticket [1][10]. Carr's disclosure, certified on 22 June and released late on a Friday, reported tickets for himself and a guest worth $12,390 [10]. ProPublica asked him to explain the gap between that figure and the skybox price. He did not respond [10].

The two accounts of Carr's gift history differ in scale. ProPublica's July report said he had accepted tickets at least seven times since his 2017 appointment, totalling over $63,000 [1]. Its August report said eight times, over $75,000 [10]. Seven of the 10 commissioners who served since 2016 accepted tickets worth more than $260,000 in total, according to the outlet's analysis of ethics disclosures [10].

Democracy Defenders Fund and Citizens for Responsibility and Ethics in Washington filed complaints demanding investigations [10]. An FCC spokesperson previously said agency ethics officers cleared commissioners to accept the tickets. Paramount's communications chief called it a decades-long CBS practice of inviting officials from both parties [10].

Four ethics experts told ProPublica that Carr and Trusty should not take part in any upcoming decision on the merger [1].

What happens next

The film floor is already running. The 30-film annual minimum applies to the first two years after closing [9].

The FCC's grant also lets non-controlling foreign investors raise their indirect stakes to 20% at a future date, so the ownership question can reopen without a new merger [7]. Nothing in the settlement caps subscription or ticket prices, which means the film commitments do not limit what cinemas or streaming subscribers pay [9]. The watchdog complaints seek investigations. The FCC's inspector general declined to comment [10].