Paramount’s takeover of Warner Bros is a whale of a deal

In a landmark deal, Paramount is poised to acquire Warner Bros. and gain the studio’s extensive catalog and history. The deal, expected to close in late summer this year, will reshape the industry.<br>Hollywood has been dominated by five major studios for decades, even as names changed. Paramount’s acquisition of Warner Bros. will shrink that lineup to four for the first time in the modern era.

The big 5 studios make up 78% of market share<br>Disney<br>28.5%

Universal<br>17.4%

Warner<br>21.5%

Paramount<br>5.6%

Sony<br>4.7%

Other<br>22.3%

Once this deal closes, one of those big fish will have effectively cannibalized another. But before they got to this latest shakeup, the big five studios had to get to the top of the industry through buying up the competition or serving themselves up to stay afloat.

A scrolling section with animated bubbles illustrating acquisitions and mergers of film production companies by the big five movie studios.<br>1989<br>"Big Five" studio<br>Acquisition<br>Mergers

The year is 1989.<br>Sony — one of today’s big five movie studios — acquires the film production company Columbia Pictures along with the production company Tri-Star Pictures for $3.4 billion. It was the largest U.S. acquisition by a Japanese firm at the time.<br>In the same year, Warner Communications acquires entertainment powerhouse Lorimar-Telepictures.

Five years and a protracted bidding war later, Viacom, led by Sumner Redstone, buys Paramount, paying about $10 billion to create a combined company.

Time Warner acquires Turner Broadcasting just two years after that in a monumental merger, creating one of the world’s largest media companies at the time.

In 2004, NBC and Vivendi Universal merge and rebrand as NBC Universal. The merged company was later acquired by Comcast.

Over a decade passes before Disney acquires 21st Century Fox, gaining notable studios like 20th Century Fox, Fox Searchlight, Fox 2000 Pictures and Blue Sky Studios. In 2020, they were rebranded as 20th Century Studios and Searchlight Pictures; in 2021, Fox 2000 Pictures was dissolved, and Blue Sky Studios was permanently shut down.

Scrolling through years

Three years later, Discovery, Inc., purchased WarnerMedia from AT&T and formed Warner Bros. Discovery.

Scrolling through years

Skydance Media purchases Paramount in 2025, cementing an $8 billion merger and placing David Ellison as chairman and CEO.

Now, with the Warner Bros. deal, one of the “Big Five” is itself up for sale to the highest bidder, just four years after its merger with Discovery. The deal brings together ‌two ⁠of Hollywood’s largest studios and content libraries while uniting streaming platforms Paramount+ and HBO Max.

The decades-long trend of consolidation in Hollywood has reached a new level as legacy media companies have struggled to bounce back after the pandemic shutdown and the 2023 writers’ strike.<br>Movie theaters and studios, already under pressure from streaming, took massive hits during the 2020 pandemic. Even in 2026, long after the end of pandemic restrictions, audiences and box office revenues have yet to fully recover to pre-pandemic levels. New releases in theaters are only now starting to return to 2019 levels.

The box office hasn’t recovered from the pandemic<br>Inflation-adjusted U.S. box office earnings

$7.24 billion$0$5$10$15$20 billion200020052010201520202025

An area chart showing the inflation-adjusted US, box office earnings from 2000 to 2025. The earnings in 2025 were still lower than those in pre-pandemic year 2019.

Note: Only movies shown in 1,500 theaters or more are included.

One reason some traditional studios have been hit especially hard is the large amounts of debt they carry. When revenues dip, servicing interest payments becomes burdensome and eats into profits. Warner Bros. Discovery is a prime example: it was formed in 2022 when AT&T spun off its WarnerMedia assets and merged them with Discovery, saddling the new company with over $45 billion in net debt, which is the company’s total debt minus its cash and cash equivalents.<br>By comparison, Paramount and Netflix each owe much less. Warner Bros. Discovery turned profitable for the first time since 2021 in 2025, but still carried $29 billion in net debt at the end of the year.

Mergers result in substantial rise in debt for media companies<br>Net debt held at the end of the year by three major media companies, from 2016 to 2025

Bar charts showing net debt held from 2016 to 2025 by Warner Bros., Paramount and Netflix. Both Paramount and Warner Bros. debt increased significantly after mergers.<br>Warner Bros.<br>Discovery-WarnerMedia merger<br>–$50–$40–$30–$20–$10 billion$0201620202025<br>Paramount<br>Viacom-CBS merger<br>'16'20'25<br>Netflix<br>'16'20'25

The current Paramount-Warner Bros. deal, valued at $110 billion, would result in the creation of  $79 billion in net debt for the combined entity.<br>Laurent Yoon, an analyst covering American media and the telecom industry at Bernstein...