Two of Hollywoodโs five top film studios have officially merged, capping two years of disruption to the worldโs traditional media industry in a deal spearheaded by the son of a major Trump ally who also happens to be the worldโs eighth-richest man.
Paramountโs buyout of Warner Bros Discovery valued the latter at $159 billion, making it the biggest media deal in history. And the creation of the new merged entity, dubbed Skydance, has all the hallmarks of Trumpโs America.
Bankrolled by Skydance boss David Ellisonโs father โ Oracle founder and tech oligarch Larry Ellison โ with a little help from private equity and three Middle Eastern sovereign funds, the deal has had its fair share of critics. But with it now set in stone, David Ellison holds the keys to an entertainment and news business juggernaut, and that could change how you and I watch our favourite shows in the future.
Given it is one of the biggest disruptors to global media in the 21st century, the marriage of Paramount and Warner Bros has understandably received widespread condemnation for how it will affect the livelihoods of thousands of workers in the entertainment and media industries.
More than 1400 members of the entertainment industry, including the likes of actors Javier Bardem and Ben Stiller, signed an open letter this year opposing the deal, arguing it would result in a reduced industry.
Hollywood actor Mark Ruffalo, who starred in HBO show Task last year, has been one of the most outspoken critics, arguing last week that the deal will stifle creativity, weaken free speech and cost jobs.
Coveted prize comes with baggage
David Ellison โ the man heading up the combined company โ has plans to use technology to cut costs and transform Skydance into a media machine that can go toe to toe with the likes of Netflix and others that turned traditional media on its head.
Netflix almost picked up the Warner Bros film studio and home of โprestige TVโ HBO in a bidding war with Ellison earlier this year. But Ellison, who had his eyes set on Warner Bros even before he took control of Paramount last year, managed to beat Netflix to the prize with a godfather offer, which does come with some hefty baggage.
Newly minted Skydance now has more than $100 billion in debt to deal with, on top of a host of legacy media headaches which Netflix decided werenโt worth breaking the bank on.
โCongratulations on saying the biggest number, you f—ing morons,โ one of HBOโs most famous characters, Logan Roy, told his kids in the smash hit Succession.
Ellison now owns the rights to that show, and it looks like his tycoon father didnโt quite have the same advice when it comes to overpaying for a prize simply because you have to have it. The Oracle founder personally stumped up $57 billion to guarantee his sonโs deal went through.
What does it mean for Australian consumers?
While this might all seem like problems for our friends across the Pacific to deal with, it does have local implications. Australians spend more time watching TV shows and movies on paid streaming services than they do any other way, be that live free-to-air TV, catch-up or on social media, according to the Australian Communications and Media Authority.
Our culture is increasingly shaped by global, US-dominated programming. Occasionally, there is a homemade hit. But more and more, the content that defines โwater coolerโ conversations is produced and paid for by companies overseas โ except for live sport.
Most people will have crossed paths with content produced by either of the film studios in the merger, in the past weeks, months or years. WBD produced mega hits such as Barbie, One Battle After Another, the series, Sinners and F1. Recent Paramount movies include Mission: Impossible โ The Final Reckoning and Gladiator II.
And most will have seen some of HBOโs famous back catalogue, such as Veep, The Wire and The Sopranos, or ongoing programming like The White Lotus and House of the Dragon. Paramount has its own hits, such as Yellowstone, Landman and The Agency.
Many of these productions will end up on a newly merged service, with Skydance planning to combine HBO Max and Paramount+. Under what name is unknown, and we also donโt know what it will cost.
Part of the rationale for the deal includes the thesis that by bringing HBO Max and Paramount+ together, a combined service with a greater back catalogue and pipeline of programming will be able to compete with Netflix more effectively. But for consumers, this will probably eventually mean greater costs, particularly when the company adjusts its price point to reflect what used to be two different products.
Skydance also owns news services CBS and CNN and a slew of television stations, including Network 10 locally.
The mega-deal poses new challenges for the global entertainment industry, politics and for consumers of all that the industry produces. The company has appointed a new co-CEO, Ynon Kreiz from toy giant Mattel, whose central task will be finding more than $8.5 billion in cost savings over the next three years. Kreiz cut thousands of jobs during his eight years at Mattel.
David Ellison has sought to sell the deal as a positive for the public, by placing new technology, the sector in which his father made his billions, at the centre of the transformation. Expect greater innovation, he says.
The most immediate impact on Australiaโs third commercial network could be the trickle down of those cost cuts. If youโre expecting to see some of HBOโs biggest shows, like Game of Thrones, on free-to-air as part of this deal, donโt hold your breath.
โTerrific peopleโ for Trump
Skydance has already made some executive and board decisions, such as appointing Kreiz, ditching the WBD studio heads and appointing former British prime minister Tony Blair as an adviser to its board.
Larry Ellison has donated hundreds of millions to the Tony Blair institute. Ellison is also a major Trump donor. Donald Trump praised both Ellisons after the dealโs closure.
โTheyโre terrific people, and itโs going to be a great company,โ the US president said, though the younger Ellison has since sought to distance himself from Trump. โWe want to speak to everybody,โ Ellison said. โWe do not want to politicise the company.โ
But political interference has become a hallmark of Ellisonโs initial takeover of Paramount a year ago. He installed a news chief at CBS, Bari Weiss, who is considered friendly to Trump and Israel. Larry Ellison has donated heavily to Israeli causes over the years.
Part of the WBD deal includes a measure to implement a standalone board to protect CNNโs editorial independence. CNN staff had feared David Ellison would bring the network under Weiss as well.
But CNNโs existing chief executive, Mark Thompson, looks as if he is sticking around for now, with Ellison telling staff after the deal closed that โwe believe in complete editorial independenceโ.
He also plans to keep CNN and CBS separate, for now, and said he backs CNNโs legal fight against Trump after the president banned the outlet from the White House.
With the deal done, Ellisonโs Skydance is the new king of the castle. Hollywood and the golden age of prestige television are in for a change. Whether itโs for the better remains to be seen.
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Calum Jaspan is a media writer for The Sydney Morning Herald and The Age, based in Melbourne. Reach him securely on Signal @calumjaspan.10Connect via X or email.From our partners
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