Paramount Skydance completed its takeover of Warner Bros. Discovery on Tuesday, creating a sprawling new company named Skydance that brings two century-old Hollywood studios, two global streaming services and two major U.S. news organizations under one corporate roof.
The cash-and-debt deal was valued at nearly 111 billion U.S. dollars, making it one of the largest media mergers on record -- a turning point for the entertainment industry that opens the door to broader growth overseas, according to Abi Watson, a senior analyst.
Watson also said the deal instantly reshapes the global streaming market, pairing two of Hollywood's biggest studios with two of its largest streaming platforms. She cautioned, however, that overlapping operations and heavy borrowing leave Skydance little choice but to cut costs and improve efficiency.
"I mean, it's enormous. You've just outlined the kind of scale of the two businesses that are combining two major Hollywood studios -- HBO Max, Paramount. It's creating the second largest streaming portfolio. Another bit that's going to be really interesting to see is obviously the balance sheet is going to be quite constrained," said Watson.
Beyond scale, she pointed to considerable room for expansion overseas.
"You are still seeing roll-out in multiple territories for both Paramount and HBO ... [the] WBD streamer. So recently we've seen launches, I think, I believe it was in the UK, Germany and Italy and the European side -- the HBO. There's still a lot of geographic growth available for both of these streamers," she said.
Paramount Skydance completes takeover of Warner Bros. Discovery to create Skydance
