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Paramount's $110 billion Warner Bros. deal will close as Skydance under a 30-film yearly floor
Paramount is set to close its $110 billion Warner Bros. Discovery merger on October 6 as Skydance, under a settlement requiring 30 theatrical films a year. Households paying for both HBO Max and Paramount+ keep two apps for now, with no announced price or date for the merged service.
The Product Desk · Product desk
What happened
- A judge approved Paramount's settlement with California and 11 other states that sued over the acquisition this week, clearing the last major hurdle to the deal.
- Ahead of the close, Paramount named Ynon Kreiz, the former chairman and CEO of Mattel, as co-CEO of the combined company.
- Ellison told investors earlier this year that HBO Max and Paramount+ would be combined into a single streaming service if regulators approved the deal.
- HBO is likely to become a sub-brand inside that larger service, according to a person familiar with Paramount's plans who spoke to CNBC.
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Why it matters
- constraint The film floor ties the combined studio to at least 60 theatrical releases in its first two years, limiting how much of the slate can move from cinemas to the merged streaming app during integration.
- exposure Partners and bundlers pricing against 200 million subscribers are using a figure that, if it sums the two bases, counts every dual subscriber twice and will shrink by that overlap once the apps merge.
- decision Households paying for both services can keep both bills through the close; their real choice arrives when Skydance publishes a price and a date for the combined app.
On October 6, a household that pays for HBO Max and Paramount+ becomes a customer of the same company twice [2][15]. On the investor call earlier this year, executives did not say how a combined service would be priced [10]. 9to5mac reported this week that no timeline for merging the two has been communicated [14].
The first thing to change is the parent company's name. It will be Skydance [1]. Ellison's post on X announcing the name describes a parent that stays behind its studios. "We never wanted a new corporate identity to diminish, alter or overshadow either one," he wrote [6]. Earlier this year he made a similar promise about streaming. "HBO should stay HBO," he said [11]. 9to5mac expects Skydance to become the name of the merged streaming service as well [13]. If it does, the corporate name Ellison said should not overshadow the studios becomes the app a subscriber opens, with HBO as a section inside it [12].
Ellison put the combined service at about 200 million subscribers, based on existing totals [9]. A household paying for both services is one customer with two accounts. Once the apps merge, its two subscriptions become one at most [3]. If the 200 million is the two existing bases added together, that household is in it twice.
Ellison's post calls Skydance "a creative-first home for bold, quality storytelling" [7]. The settlement with the 12 states puts a number on part of that [2]. Its theatrical minimum runs for five years and starts at 30 releases a year in years one and two [4]. Across those two years that comes to at least 60 films [1], a slate cinema operators can plan screens against. The reports put a yearly figure only on years one and two.
For anyone planning around Skydance next week, it helps to ask of each announcement whether it changes something a customer sees or pays for, and whether it comes with a date or a number. The new name and Kreiz's appointment as co-CEO both have dates, and neither changes anything a subscriber touches [1][5]. The film floor has both a date and a number, and it reaches customers through what plays in cinemas [4]. The combined streamer changes a subscriber's app and bill, and nobody has given it a date [14].
I'd plan against the dated items. Until Skydance reports unique subscribers after the apps merge, I'd treat the 200 million as the two old bases added together [9][3]. Retention after the merge, counted in households, will show how big the combined audience is. The tradeoff is that the dated items are the ones a subscriber notices least.
What to watch
- A price and migration date for the combined HBO Max and Paramount+ app, and whether it ships under the Skydance name.
- Skydance's first subscriber report after the apps merge, and whether it counts unique households or adds the old bases together.
- The settlement's release minimums for years three through five, and whether the year-one slate clears 30 films.