Earlier this year, the streaming and entertainment industry witnessed one of its most high-stakes megadeals ever, stunning industry observers. Not only is it historic in its size, but it is also predicted to disrupt Hollywood and the media business as we know it.

After years of Warner Bros. Discovery (WBD) struggling under the weight of billions of dollars in debt, compounded by declining cable viewership and fierce competition from streaming platforms, the company has been considering major strategic changes, including selling its entertainment assets to one of its rivals.

Several major players saw the potential in acquiring the media giant, and in December, Netflix announced it would acquire WBD’s studios and streaming for $82.7 billion.

But in a surprise eleventh-hour move in late February, the David Ellison-run Paramount became the winner of this bidding war, offering $111 billion to acquire all of WBD’s assets, including its studios, HBO, streaming platforms, games, and TV networks such as CNN and HGTV. Paramount was recently acquired by Ellison with significant support from his father, Larry Ellison — the Oracle chairman, world’s sixth-richest person, and major Trump donor.

Paramount’s offer was approved by the U.S. Department of Justice (DOJ) in June. A federal judge then paused the deal after a lawsuit was filed on July 13 by a coalition of 12 state attorneys general. However, a judge approved it in late September, with the acquisition finally official as of October 6. Let’s break down exactly what happened and what could come next.

This all started back in October 2025 when Warner Bros. Discovery revealed it was exploring a potential sale after receiving unsolicited interest from several major players in the industry.

The bidding process quickly became competitive, and Paramount and Comcast emerged as serious contenders, with Paramount initially viewed as the frontrunner.

However, WBD’s board eventually determined that an offer from the streaming giant Netflix was the most attractive. Netflix offered $82.7 billion for just Warner’s film, television, and streaming assets.

Thus began the bidding war. Paramount believed its bid of approximately $108 billion for all of Warner’s assets was superior to Netflix’s offer that focused on just the studios and streaming. To sweeten its deal, Netflix amended its agreement in January to an all-cash offer at $27.75 per share of Warner Bros. Discovery, further reassuring investors and paving the way for the deal to proceed.

Paramount persisted in its attempts to acquire WBD. Still, the Warner board repeatedly rejected its offers, citing concerns about Paramount’s heavy debt load and the increased risk associated with its proposal, including concern over the suite of investors bankrolling Paramount’s bid, which includes Saudi, Qatari, and Abu Dhabi sovereign wealth funds. The board noted that Paramount’s offer would have left the combined company burdened with $87 billion in debt, a risk they were unwilling to take at the time.

In January, Paramount filed a lawsuit seeking more information about the Netflix deal. A month later, the company sought to sweeten its deal by announcing it would offer a $0.25 per share “ticking fee” to WBD shareholders for each quarter the deal fails to close by December 31, 2026. It also said it would pay the $2.8 billion breakup fee if Warner backs out of its deal with Netflix.

Then, in a final attempt to secure a deal, Paramount increased its offer to $31 per share in February. This prompted the WBD board to prolong discussions with Paramount regarding a potential agreement, considering it as a superior offer. Netflix declined to increase its bid and withdrew from the negotiations.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement on February 26. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”In addition to the billions Paramount already holds in debt, the company is also set to assume the approximately $33 billion in debt Warner Bros. Discovery holds under the agreement.

The deal will be backed by a $54 billion debt commitment from Bank of America, Merrill Lynch, Citi, and Apollo Global Management, as well as $45.7 billion in equity from Larry Ellison.

In addition to the assumption of substantial debt posing a significant financial burden, Paramount faced several other hurdles in its deal with WBD.

For one, Ellison has warned about significant job reductions that are expected in the near future. There have already been widespread concerns among critics about potential job losses and lower wages.

Ellison is also a controversial figure in the industry, and his ownership of CBS News has been seen as sympathetic and supportive of the administration of Donald Trump, of whom his father, Larry Ellison, is a major donor. Under Ellison’s ownership of Paramount, reporting critical of the administration has been shelved or received increased scrutiny from Ellison or his appointed head of CBS News, the conservative provocateur Bari Weiss.

This has led to some concern among employees at Warner-owned CNN. Trump has personally sought concessions from news divisions critical of him, including a $16 million settlement from CBS, before his FCC would approve the Ellison takeover of Paramount. Before Netflix bowed out of the deal, Trump pressured the company to fire the former Biden White House official Susan Rice from its board. He has publicly stated his intentions to bring CNN to heel under new owners. Regulatory scrutiny was another hurdle. Such a large-scale merger attracted attention from lawmakers.

For instance, California attorney general Rob Bonta said in a statement on February 26 that “these two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review.”A day before Netflix backed out, a coalition of 11 state attorneys general urged the U.S. Department of Justice to review the merger under concerns it will stifle competition and increase subscription prices. This comes months after U.S. senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal voiced their concerns to the Justice Department’s Antitrust Division, warning that such a massive merger could have serious consequences for consumers and the industry at large.

The senators argue that the merger could give the new media giant excessive market power, enabling it to raise prices for consumers and stifle competition.

Despite the DOJ approving the deal in June, a coalition of 12 state attorneys general filed a lawsuit on July 13 to block the merger. The suit argues it would lessen competition and harm movie theaters, cable distributors, and viewers. The coalition is led by Bonta, with Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington also joining.

In response, U.S. District Judge Araceli Martínez-Olguín issued a 14-day pause.

As of October 6, Paramount and Warner Bros. has officially been renamed Skydance, and the new combined corporation will have annual revenue of almost $70 billion.

In terms of its streaming services— Paramount+, HBO Max, and Discovery+,— those are all set to be combined eventually.