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The Paramount and Warner Bros. Discovery is official, both companies unveiled the $111 billion megadeal on Friday following Netflix’s bowing out of the running the day before.
The deal will see Paramount pay $31 per share for all of Warner Bros. Discovery. In the event the transaction does not close due to regulatory matters, Paramount will have to pay Warners a $7 billion regulatory termination fee.
The deal is backed by $47 billion in equity commitments from the Ellison family and RedBird Capital, and $54 billion in debt financing from Bank of America, Citigroup, and Apollo.
Paramount added that “at closing, the equity may include other strategic and financial partners” with previous bids including funding from Middle East sovereign wealth funds, China’s Tencent and Jared Kushner’s Affinity Partners.
Paramount has also reportedly already paid the $2.8 billion termination fee that Warner Bros. was required to pay to Netflix to abandon its signed deal.
Paramount says it expects the deal to close in the third quarter of this year. California Attorney General Rob Bonta states they have an open investigation and intend to be ‘vigorous’ in their review of the deal.
If it does, that would be incredibly fast. Business Insider reports that WBD CEO David Zaslav addressed employees at a town hall Friday and said: “The deal may not close. If it doesn’t close, we get $7 billion, and we get back to work.”
Paramount-Skydance is reportedly committed to keeping both Paramount and Warner Bros. as independent studios, with 15 theatrical releases per year each and full 45-day windows before moving to premium video on demand. Hit films will have longer windows.
Questions have been raised over that high target number. To put that in perspective, Warner Bros. released 11 films theatrically last year while Paramount released 9. People also remember Disney’s acquisition of 20th Century Fox, which saw Fox’s output of 14 films per year in 2017 drop to as low as 3 in 2023 and 6 last year.
Paramount expects it will be able to yield $6 billion in ‘synergies’ – namely, cost-cutting from technology integration and streamlining operations (ie. job cuts).
Source: THR
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