One of the biggest ever media mergers means more hobbits, heroes and Potter

One of the biggest media mergers in history is complete, combining Paramount Skydance and Warner Bros Discovery into a new entertainment behemoth that owns many of the world’s biggest film and TV franchises – and the UK’s Channel 5. Skydance CEO David Ellison, son of a tech billionaire and ally of Donald Trump, said he was creating a “next-generation media and entertainment company, powered by creativity and technology” to take on streaming giants such as Netflix. It owns an extraordinary library of content, from the Godfather to Barbie, Forrest Gump to Top Gun, Casablanca to Batman. Shorts Minutes after the merger was complete on Tuesday Ellison said a slate of new movies would be made by the studio, including from the Harry Potter, DC Comics and Lord of the Rings universes. But there are fears the merger will significantly reduce competition and diversity in the media – including in the UK, where the new company leapfrogs Sky to become the country’s third most-viewed TV network, once the companies’ more than 50 linear channels (including Channel 5) are added together. Skydance combines a slew of Hollywood’s biggest brands and film libraries And the new company’s mountain of debt potentially means cuts and layoffs will follow, especially in loss-making news channels. Shortly after the merger was complete, staff got a long memo in their inbox from Ellison and Co-CEO Ynon Kreiz. It promised they would build “a company that tells great stories in every genre, for audiences everywhere, on every platform”. They pledged to make at least 30 movies a year, “pairing original stories from today’s most exciting filmmakers with beloved franchises like Harry Potter, Mission: Impossible, The Lord of the Rings, DC, Transformers and Star Trek“. In other words – more superheroes, wizards and hobbits. Or in corporate speak, “unlocking the full potential of our assets: an unmatched portfolio of brands [and] franchises”. The Paramount mountain and WB shield will still appear at the start of the films, as brands that disguise the merged management. Professor Albus Dumbledore: property of Skydance On TV, they said, expect “storytelling like Game of Thrones, Landman, NCIS, Tracker and SpongeBob SquarePants“. David Folkenflik, media correspondent for NPR and author of a book on media empires, told the ABC the merger was “an extraordinary moment” for Hollywood and the media. “David Ellison is trying to create a new media empire but on old Hollywood terms, and seeking to compete with these new digital titans of Netflix, Amazon, and Apple,” he said. Who is David Ellison? The UK government reviewed the merger’s impact on the British media landscape earlier this year: and Culture Secretary Lisa Nandy had concerns. In a letter to Paramount and Skydance in June, the Department for Culture, Media and Sport said Nandy wanted to ensure that “no one owner or voice has too much influence over public opinion or the political agenda”. Ellison is the son of the world’s eighth-richest man, Oracle’s Larry Ellison. Ellison junior’s personal billion-dollar fortune is dwarfed by the estimated $185bn of his father, who personally guaranteed a large chunk of this week’s merger. Because of the unclear influence of Ellison Snr, Forbes has declined to put Ellison Jr on its billionaires list. David Ellison is now one of the world’s most powerful media moguls (Photo: REUTERS/Jeenah Moon) Both Ellisons are considered allies of Donald Trump. The Wall Street Journal called the relationship “symbiotic”, reporting that Ellison Snr gave $45m to a political nonprofit group supporting Trump’s election efforts in 2024, with support continuing after the election. On Wednesday Ellison Jr said he had “a good relationship” with the Trump administration, but did not want to “politicise” the company and thought it was “important to talk to everybody on both sides of the aisle”. Trump, asked about the merger on Wednesday, said “they’re terrific people, and it’s going to be a great company”. Channel interference According to the DCMS letter, Warner Bros owns 30 linear channels that broadcast in the UK, including CNN, TNT Sports and the Cartoon Network. Paramount owns 20, including Channel 5, Nickelodeon, Comedy Central and MTV. DCMS analysis found that, combined, their viewing share (12.1%) would be greater than Sky and Channel 4, making them the third largest linear broadcaster in the UK by audience share. It also noted that the merger “could potentially lead to a loss of a significant presence in an already limited market for children’s linear content”. The new company also has four streaming services with millions of subscribers in the UK: Discovery+, HBO Max, Paramount+ and 5. Ellison has already indicated he will merge HBO Max and Paramount+. Nandy was also concerned the merger had “potential to result in a concentration of voices in international news programming within the UK. This might happen if, for example, Channel 5 News and CNN were to combine their US and international news programming or if a decision was made to stop broadcasting CNN International altogether.” The company combines dozens of TV channels When Skydance took over Paramount last year and installed new leadership at CBS it sparked an internal revolt over claims of editorial interference. Nevertheless the UK formally approved the merger in August, on several conditions including that Channel 5 will continued to operate as a free-to-air public broadcaster until at least 2034, with its news arm remaining editorially independent from CBS and CNN during that period. On Tuesday CNN anchor Anderson Cooper asked Ellison what changes he had in store for CNN, and Ellison did not directly answer, saying only that he “believes deeply in journalism [and] in complete and total editorial independence”. Folkenflik noted that Ellison was “saying things that I think people are happy to hear and yet long term, he’s not making any firm promises”. Cuts to come? The memo obliquely acknowledged that cuts and layoffs are likely to follow the merger. “We are also targeting at least $6 billion in synergies, which will make us leaner and more nimble and free up capital to invest in the stories, creators and technology that matter most,” it said. Ellison said on Tuesday “most” of the savings would not come from job losses. Folkenflik said the new company had “the power to drive up cost for the consumer”. Especially in the streaming area, he said, “it’s hard to believe those prices won’t go up”. “I think the consumers are going to be hit,” he said.