With Hollywood's history of failed mergers, this is the rocky road ahead for David Ellison and Skydance Tech scion David Ellison spent three years doggedly pursuing his dream: acquiring Paramount, then Warner Bros. Discovery. Ellison pulled off his bold feat this week by completing Paramount’s $111-billion takeover of Warner Bros., uniting two industry pioneers and a wealth of cherished properties — Batman, Bugs Bunny, Harry Potter and Maverick of “Top Gun,” as well as CBS, HBO, Comedy Central and CNN. All will be tucked under a corporate umbrella that Ellison is calling Skydance — the name of the studio he formed two decades ago. The mogul and his lieutenants celebrated their victory in style, ringing the New York Stock Exchange opening bell on Thursday, capping a bruising battle to secure approval of a deal that had sparked protests across Hollywood over fears of looming job cuts. Ellison and his team must braid together two huge film studios (housing nine film labels), four streaming services, three TV production studios, three animation units and more than 50 television networks, including two prominent news organizations. That could be a daunting task, particularly based on how previous Hollywood mergers have fared. “Now, the real work begins,” David G. Fubini, a Harvard Business School senior lecturer, said in an interview. Anxieties were evident Tuesday — the day the deal closed — when Ellison held a town hall meeting at Warner Bros., which drew nearly 500 employees. During the session, CNN’s Anderson Cooper quizzed his new bosses, including about anticipated layoffs and news independence. “Do you stand with CNN and our effort to completely restore access to covering President Trump?” Cooper asked, referring to CNN’s legal fight alongside MS Now and Politico to reverse the president’s ban on the three organizations. “Of course,” Ellison replied. CNN news anchor Anderson Cooper, pictured here in 2021, quizzed his bosses at a Burbank town hall. (Evan Agostini / Invision / Associated Press) Hours later, Ellison parried with reporters in Paramount’s darkened Stage 3, recently revamped with laser projection capabilities to simulate fantastical and far-flung settings for TV shows, such as the streets of New York. “This was a turbulent process, and, at times, a really ugly process, to actually get this deal over the finish line,” Ellison acknowledged to reporters. “What I want to be able to do now is turn the page, and actually make sure that we are in the business of rebuilding trust.” To do that, Ellison intends to make more movies and TV shows than rivals. He wants to ensure the Warner Bros. and Paramount studios, which will be kept separate for now, remain talent-friendly destinations. Ellison has taken an opposing view from his predecessors who confronted crumbling industry economics by cutting expenditures to boost their corporate bottom lines. The 43-year-old executive, son of Oracle co-founder Larry Ellison, proudly views his family as “owner-operators,” unshackled by quarterly earnings expectations or the need to dole out dividends to keep investors happy. The Ellison family controls the company’s voting stock, allowing David Ellison to take a long-term view as he charts Skydance’s course. The goal is to “win in storytelling,” Skydance said in an investor presentation. It intends to build the media industry’s most “technologically capable” firm, which uses artificial intelligence to speed work flows. Skydance plans to spend at least $30 billion a year on film, television and video game content. Skydance co-CEO Ynon Kreiz, Sarah Ellison, CEO David Ellison and investor Gerry Cardinale of RedBird Capital Partners on the floor of the New York Stock Exchange on Thursday. (Yuki Iwamura / Associated Press) The realities of Ellison’s big swing will soon sink in as he and his team turn their focus to integrating the myriad operations and about 55,000 employees. In some ways, Ellison is behind the curve. Most major mergers are consummated after executives have dedicated months to quietly drafting detailed operational plans and organizational hierarchies. Ellison, in contrast, has spent the last nine months in a pitched battle for Warner Bros. — ultimately vanquishing Netflix, hundreds of vocal merger opponents, and California Atty. Gen. Rob Bonta and his coalition of 11 other state attorneys general who filed an antitrust lawsuit in July in an attempt to derail the deal. Ellison and Bonta resolved their legal fight Sept. 21. A week later, a federal judge cleared the way for the merger to close. The lawsuit settlement with Bonta requires that the combined company produce at least 30 movies a year for five years. It also must maintain the studio facilities in Los Angeles, making “reasonable efforts to operate the lots in a manner consistent with past practices,” according to the agreement. Skydance has committed to maintaining operations on the Warner Bros. lot, pictured here, and at Paramount Pictures in Hollywood. (Eric Thayer / Los Angeles Times) Ynon Kreiz, former chief executive of Mattel toys in El Segundo, has been tasked with leading the integration. The 61-year-old executive joined Ellison at Skydance as his co-CEO earlier this week. Day One of the combined company marked Kreiz’s second day on the job. “They have a whole new management team that will be expected to immediately lead this massive integration,” Fubini, a former partner at consulting firm McKinsey, said. “The clouds have cleared, and they are at the base camp of Mt. Everest facing this enormous undertaking.” In a report this week, TD Cowen Global Research maintained its “hold” rating on the newly constituted Skydance, expressing some doubts about Ellison and his team’s ability to “avoid integration and execution problems that have bedeviled other major media mergers.” Hollywood has had a history of failed mergers, including Discovery’s 2022 takeover of WarnerMedia from AT&T, which led to years of cost cuts that ultimately seeded the ground for Ellison’s takeover. AT&T’s purchase of the same assets in 2018 also quickly unraveled, some 20 years after the epic failure of AOL Time Warner. Ellison now must grapple with the hefty acquisition costs for Warner Bros., which climbed as the deal was delayed. The company emerged from the transaction with $86.8 billion in total debt; with most of that going toward buying out Warner Bros. Discovery’s stockholders at $31.17 a share. The debt burden also includes more than $18 billion in obligations leftover from past mergers. Skydance has nearly $7 billion in cash on hand. Oracle’s Larry Ellison and executive producer David Ellison arrive at the L.A. premiere of “Star Trek Into Darkness” at the Dolby Theatre in 2013. (Eric Charbonneau / Getty Images for the Hollywood Reporter) The Ellison family brought in foreign investors, including royal families of Saudi Arabia, Qatar and Abu Dhabi as passive owners, to contribute equity to the deal. Gerald Cardinale’s RedBird Capital Partners, a longtime Skydance stakeholder, added $4 billion, bringing its total investment in Skydance deals to $6 billion. The deal’s financial terms pose deep challenges, analysts said. Fitch Ratings this week downgraded Skydance credit, citing “materially higher leverage after the acquisition and significant execution and integration risks,” according to its report. “Interest rate increases made financing this transaction far more expensive than anyone anticipated,” said Eric Talley, a professor at Columbia Law School. “Those lenders are going to start expecting their interest payments — Skydance executives won’t have the luxury of time.” The company could struggle, Talley said, to “generate the cash flow needed to easily service that debt unless they can significantly cut costs.” Skydance has promised investors that it will make $6 billion in cost cuts over three years. It anticipates $2 billion in reductions within a year, with the bulk of the rest occurring in the second year of the merger. “They are going to be firing a lot of people,” TD Cowen Global Research media analyst Doug Creutz said. During the news briefing, Kreiz sought to downplay the expected workforce toll, saying Skydance would achieve savings by combining technologies that support streaming services and marketing expenditures. It plans to save costs on real estate by locating employees at Skydance-owned properties in Santa Monica, Hollywood and Burbank. HBO could move from Ivy Station in Culver City, its home for the last five years, to one of the studio lots. Ellison and Kreiz said they would jointly manage the new colossus. “Where David will focus on creative, technology, long-term strategy, including especially as it relates to the creative part of the business, I will focus more on the operations and the day-to-day management of the business,” Kreiz said. Kreiz was named to Skydance‘s expanded board this week along with Laurene Powell Jobs, the founder and president of Emerson... Source: https://www.latimes.com/entertainment-arts/business/story/2026-10-09/skydance-david-ellison-conquered-hollywood-now-work-begins