David Ellison officially closed his $111 billion merger of Paramount Skydance and Warner Bros. Discovery on Tuesday, October 6, 2026, creating a new media conglomerate. Wall Street responded with immediate caution as shares dropped, while Hollywood faces studio changes and a new five-year output commitment.
David Ellison Closes $111 Billion Deal as Warner Bros. Discovery Shares Cease Trading
The industry transformed from five major studios to four following a twist-filled saga that nearly saw Warner Bros. acquired by Netflix before Paramount owners Skydance outbid the streaming giant. David Ellison closed the massive $111 billion merger of Paramount Skydance and Warner Bros. Discovery on Tuesday, October 6, 2026, uniting legendary brands under a single corporate structure.
Warner Bros. Discovery shares ceased trading on the Nasdaq on Tuesday, with WBD shareholders receiving an amount in cash equal to $31.01666668 per share. The newly formed entity operates under the Skydance banner, joining Sony, Disney, and Universal as the remaining major-studio players in Hollywood.
Wall Street Responds With Cautious Trading and Credit Downgrades Over Debt Concerns
Wall Street was far from celebratory during the opening days of the newly minted company. Shares in the post-merger Skydance, trading on the New York Stock Exchange under the ticker symbol SKYD
, were down nearly 8% as of 10:40 a.m. ET on Wednesday, hovering around $8.82 per share after closing Tuesday down 2.7% at $9.51 per share.
Analysts and credit agencies immediately trained their focus on the roughly $80 billion in debt carried by the combined entity. Fitch Ratings downgraded Skydance’s credit rating ahead of the merger close.
To fund the acquisition, Skydance priced $41.4 billion in senior secured notes and took on an $8.5 billion term loan, with some notes carrying interest rates reaching upwards of 9.13%. According to projections from Fitch Ratings, the company’s debt level is expected to reach 780% of its fiscal 2026 pre-tax earnings, which sits well past safe financial limits.
Settlement Terms, Regulatory Concessions, and Leadership Changes at the Combined Studio
The path to closing the deal required overcoming legal opposition. A settlement reached on September 21 resulted in strict conditions for the combined studio. Skydance is required to maintain 30 theatrical releases annually for the first two years and 32 annually for the next three, provide at least $300 million more in annual U.S. production spending, freeze theatre operator rates for three years, and establish an editorial-independence board for CBS News and CNN.
Leadership changes followed immediately.
Warrants Distribution and Upcoming Financial Milestones for Skydance Stockholders
Investors are also watching upcoming warrant distributions. October 13 has been designated by the board of directors for the rollout of 471.3 million warrants, granting PSKY Class B stockholders the right to acquire SKYD Class B common stock at an initial exercise price of $12 per share. These warrants are intended to provide shareholders the opportunity to buy shares on terms similar to those offered to the $47 billion equity syndicate backing the deal.
David Ellison and co-CEO Ynon Kreiz told reporters they have a multiyear plan to manage the debt load and achieve promised cost synergies.