Hollywood

Paramount and Warner Bros. Tie the Knot. Will Cinema and a Free Press Pay?

Warner Bros. joins David Ellison's Skydance with $80 billion of debt and its last film a flop. Three earlier takeovers show what such deals cost the studio and cinema.

ukscreen 6 October 2026, 13:31 · Updated 11 October 2026, 13:51

Paramount and Warner Bros. tie the knot—with cinema and a free press at stake. AI-generated editorial illustration for UKScreen.

The last film Warner Bros. released before it passed to the Ellison family was a satire about a tycoon who wrecks the planet while insisting he is saving it. Digger, directed by Alejandro González Iñárritu with Tom Cruise as an oil baron, opened on 2 October to $8 million in North America and $20 million worldwide, against a budget reported at between $125 million and $180 million. On 6 October, the closing date set by both companies, the studio became part of Skydance, the $111 billion merger of Paramount and Warner Bros. Discovery run by David Ellison, the 43-year-old son of the Oracle co-founder Larry Ellison.

The executives who backed Digger, Michael De Luca and Pamela Abdy, had already been told they had no place in the new company. Last week UKScreen examined the Ellisons’ politics and what they mean for Hollywood talent. The question now is whether a great studio can prosper under the weight of the deal that bought it.

A studio that keeps being sold

Warner has been here three times this century. In 2000 AOL announced a merger valued at about $160 billion; for 2002 the combined company reported a loss of $98.7 billion, then the largest in corporate history. In 2018 AT&T paid $85 billion for Time Warner, and four years later unwound the purchase in a $43 billion deal with Discovery. Discovery’s David Zaslav began the merged company with $55 billion of debt and shelved Batgirl along the way.

Each buyer came from outside film-making: an internet provider, a telephone company, a cable-television group. Each arrived with a theory about scale, and each time the film studio paid for it. In 2017, as AT&T closed in, UKScreen warned that Hollywood’s studios “may become subsidiaries supplying the entertainment needs of technology companies’ customers”. Skydance is the fourth attempt, and the fortune behind it was made in business software.

The $80 billion bill

Skydance begins life with about $80 billion of debt and a promise to cut $6 billion in costs. Fitch has downgraded Paramount’s debt to junk. At the same time, the settlement that ended a lawsuit by 12 US states commits the company to at least 30 cinema releases a year, rising to 32, with $1.5 billion of additional US production spending.

The arithmetic is plain. A company that must save $6 billion while releasing more films will make them more cheaply, with fewer people. The settlement itself concedes the point: it sets aside $47.5 million to retrain displaced workers.

Collapse is unlikely. Larry Ellison personally guaranteed $40.4 billion of equity during the bidding, and sovereign funds from Saudi Arabia, Qatar and Abu Dhabi have committed $24 billion in non-voting shares. AOL Time Warner never had a patron of that kind. The danger is slower: years in which every green light is weighed against an interest payment. David Ellison calls the merger a “transformational moment for our industry” that creates a company which is “creator-first, tech-forward and built to scale globally”.

Money, and a mixed record

Ellison founded Skydance in 2006, aged 23. Its first film, the First World War drama Flyboys, in which he also acted, was a flop. He then built the company by co-financing Paramount’s franchises, among them the Mission: Impossible films and Top Gun: Maverick, which took more than $1 billion. The misses were costly: Deadline put the losses on Terminator: Dark Fate and Gemini Man above $110 million each. It is the record of a producer whose skill lies in sequels and star vehicles.

Warner’s recent strength lay elsewhere. De Luca and Abdy gave Ryan Coogler about $90 million for Sinners and Paul Thomas Anderson about $130 million for One Battle After Another, which won the Oscar for best picture in March. The Playlist describes the brand of their successors, Paramount’s Josh Greenstein and Dana Goldberg, as “decidedly not big artistic swings at high costs”. Digger was the last of those swings, and its opening hands the new regime an argument. A studio obliged to release 30 films a year is under no obligation to make any of them a risk.

Two newsrooms, one family

The best evidence of how Ellison handles a creative institution is CBS News, where he installed Bari Weiss as editor-in-chief in October 2025. In May the executive producer of 60 Minutes, Tanya Simon, and the correspondents Sharyn Alfonsi and Cecilia Vega left, Alfonsi accusing management of “choosing access journalism over accountability”. Scott Pelley was dismissed in June, and Nielsen figures obtained by the newsletter Status showed CBS Mornings with its worst-rated May on record. Weiss’s defence, put to staff in January, is that the old model was already failing: “We are not producing a product that enough people want.”

CNN is next. Its chairman, Mark Thompson, stays on as editor-in-chief and told staff he has “real confidence” that the new owners will support “the kind of independent news that CNN has always stood for”. Ellison told CNBC in March that editorial independence is “maintained at CBS, it’ll be maintained at CNN”. Against those assurances stands a Wall Street Journal report that he told Trump administration officials he would demand changes at the network. The settlement creates a five-member News Editorial Independence Board for CBS and CNN, its members chosen by the company’s own board. “We’re going to watch them like a hawk,” said Connecticut’s attorney general, William Tong.

Rupert Murdoch at his height owned one Hollywood studio and one American news network. Sumner Redstone controlled Paramount and CBS. The Ellisons now hold two of the five major studios, two national newsrooms and HBO, while Oracle owns 15 per cent of the venture that runs TikTok in the US. Senator Elizabeth Warren called the merger a “dangerous concentration of power“.

Film-makers used to have five major studios to pitch to. They now face four owners, and one of them carries $80 billion of debt and a preference for sequels. Warner’s own history shows how this tends to end: the buyer’s theory fails, the studio shrinks and the next buyer arrives. Ellison has a family fortune behind him and no impatient parent company above him. The test of his ownership is simple: whether, three years from now, Skydance has made a film as costly, strange and unlikely as One Battle After Another.

Sources: Warner Bros. Discovery investor release; Associated Press; Los Angeles Times (via The Spokesman-Review); Los Angeles Times (via Yahoo Finance); TheWrap (Skydance); TheWrap (news board); TheWrap (CNN); TheWrap (via Yahoo Finance); Bloomberg (via Yahoo Finance); Variety (via Yahoo Finance); Tech Times; The Playlist; Awards Radar; MediaPost; Consequence (Digger); Consequence (2022); Benzinga; Euronews; Fortune; GeekTyrant (reporting Deadline); The Advocate; The New Republic; Fox News (Weiss); Fox News (Ellison); The New York Times (via The Philadelphia Inquirer); Senator Elizabeth Warren on X.