US Justice Department clears Paramount Skydance’s $45.7 billion Warner Bros. Discovery acquisition

The US Department of Justice has formally approved Paramount Skydance’s acquisition of Warner Bros. Discovery, a transaction valued at $45.7 billion in equity provided by billionaire Larry Ellison. The clearance marks a significant consolidation in the American media landscape, granting the Ellison family substantial control over a portfolio that includes Warner Bros. Studios, HBO, CNN, and Warner Bros. Games, alongside existing holdings in Paramount and its television subsidiaries such as CBS, MTV, BET, and Nickelodeon.

In its announcement, the Department of Justice rejected arguments against the merger, specifically dismissing the use of Disney’s acquisition of Fox as a comparative case study. The regulator cited the intervening impact of the COVID-19 pandemic as rendering the comparison moot. The Department also dismissed widely voiced labour concerns raised by industry workers, despite an open letter signed by over 5,500 movie and television professionals, including actors Glenn Close and Jane Fonda, warning that the acquisition threatens the sustainability of the creative community.

The approval follows reports that the United Kingdom is conducting its own investigation into the deal, a factor which may have accelerated the Department of Justice’s timeline. While the federal regulator has cleared the path, the transaction faces ongoing scrutiny from European officials and state attorneys general in California and New York, who have indicated their intent to challenge the merger.

Paramount Skydance CEO David Ellison will oversee the historic Warner Bros. Studios, HBO, and its streaming counterpart HBO Max upon completion. The deal is funded by Larry Ellison, owner of Oracle, who recently joined a consortium for a 45 per cent stake in the American operations of TikTok. His daughter, Megan Ellison, operates an independent media venture separate from the father-son duo’s consolidated portfolio.

Concerns regarding editorial independence have intensified following recent changes at CBS News under Ellison family control. The appointment of Bari Weiss as head of news has led to significant restructuring, including the firing of correspondent Scott Pelley and the cancellation of The Late Show with Stephen Colbert. Industry observers fear similar shifts may occur at CNN, where former President Donald Trump, a personal friend of Larry Ellison, has previously criticised the network’s leadership.

Paramount Skydance must officially close the deal by 30 September. Failure to meet this deadline will result in a daily ticking fee of $7 million payable to Warner Bros. Discovery shareholders.