The owner of the Harry Potter franchise has been sold at a valuation of 736.1 billion yuan.

During the National Day holiday, Hollywood finally witnessed a closing that had been delayed for nearly a year.

Paramount Skydance (hereinafter referred to as "Paramount Skydance") officially announced the completion of its acquisition of Warner Bros. Discovery (hereinafter referred to as "Warner Bros.") at a transaction value of approximately 1100 billion U.S. dollars (equivalent to about 7.361 trillion yuan). According to the announcement, the merged new company is named "Skydance", with the stock ticker SKYD, and will be transferred from NASDAQ to list on the New York Stock Exchange.

Warner Bros. is the third oldest existing film studio in the United States, which owns well-known IPs such as Harry Potter, Batman, and The Lord of the Rings, and is also the parent company of HBO, the producer of Friends, and CNN. The buyer Paramount Skydance also has an impressive background: it was formed by the merger of the time-honored studio Paramount and the independent production company Skydance Media last year, and is the core producer of series IPs including Mission: Impossible and Star Trek.

This merger not only facilitated one of the largest M&A transactions in the history of the U.S. media industry, but also reshaped the power landscape of the entire Hollywood: the traditional "Big Five" studios — Disney, Sony, Paramount, Universal Pictures, and Warner Bros. — now only have four left.

What is more noteworthy is that the Silicon Valley giant Oracle also appeared behind this transaction. David Ellison, the chairman and CEO of the new company, is the son of Larry Ellison, the founder of Oracle. According to the company's plan, the new group will achieve $6 billion in cost cuts by integrating streaming services under HBO Max and Paramount, unifying technology and cloud services and other measures. Oracle's core business is cloud infrastructure and software services, which also lays the groundwork for the cloud migration path after this M&A.

From "Nickelodeon Theaters" to a Centennial Hollywood Studio

Let's start with the acquisition target Warner Bros.

This is a film studio older than Hollywood's "Golden Age", and its founding history can be traced back to 1903. At that time, four Jewish brothers — Harry, Albert, Sam and Jack Warner — used their savings to buy a projector, and played movies in coal mining towns in Pennsylvania and Ohio. In the same year, they opened their first "nickelodeon theater" in New Castle, Pennsylvania.

In 1904, the four brothers started to get involved in film distribution, and their business expanded to four states. After the end of World War I in 1918, they set up a studio on Sunset Boulevard in Hollywood, and shot their first self-produced feature-length film *Four Years in Germany*. This anti-German film was a great success at that time, making a net profit of $130,000, and the company officially transformed from a distributor to a producer.

On April 4, 1923, with the funding from banker Motley Flint, the four brothers merged their previously scattered projection and distribution businesses, and "Warner Bros. Pictures, Inc." was officially registered and established.

In the early days of its establishment, Warner Bros. did not have a smooth development in Hollywood. What really made it gain a firm foothold was a high-stakes bet in 1927. At that time, the company was mired in financial crisis, but it almost bet all its assets to launch *The Jazz Singer* starring Al Jolson — the first feature-length narrative film in film history recognized to contain synchronized dialogue segments. As a result, *The Jazz Singer* became an instant hit. It not only pulled Warner Bros. back from the verge of bankruptcy, but also kicked off the "talkie" era that continues to this day.

In the nearly century that followed, Warner Bros. almost caught up with every content wave: it bought DC Comics, which gave birth to Superman and Batman; it produced household-name series IPs such as Harry Potter, *The Lord of the Rings*, and *The Matrix*; its subsidiary HBO also created cultural symbols such as *Game of Thrones* and *Friends*. Even in the streaming era, HBO Max has firmly stood in the first echelon.

However, a brilliant history of growth does not equal a stable company. The ownership of Warner Bros. has changed hands several times:

In 1989, Warner Bros. first merged with Time Inc. and became "Time Warner";

In 2000, America Online (AOL) acquired Time Warner for $164 billion, setting the record for the largest M&A in history at that time, and also leaving one of the most famous failed cases in the Internet bubble era;

In 2018, the company's owner was replaced by telecom giant AT&T, which paid $85.4 billion (including about $108.7 billion in debt) to acquire it, and renamed it "WarnerMedia".

However, this huge acquisition made AT&T the most indebted non-financial enterprise in the United States, with its debt once approaching $200 billion. In 2021, AT&T chose to "cut the wrist to save the whole body", spun off WarnerMedia and merged it with Discovery Inc., and the new company Warner Bros. Discovery was born.

However, the merged company still faces considerable operating pressure: on one hand, cable channels such as CNN, TNT and TBS are falling into a double decline in ratings and revenue as audiences continue to drain; on the other hand, HBO Max needs to keep burning money to compete with Netflix. Caught between two sides, the performance of Warner Bros. Discovery continues to face pressure — according to the financial report for the second quarter of 2025, the company's total liabilities had reached as high as $64.381 billion at that time.

In June 2025, the helmsman David Zaslav threw out his final gamble, saying that he planned to split the high-growth streaming and studio businesses from the heavily indebted cable network business. As soon as the news came out, giants including Netflix and Paramount Skydance immediately rushed to bid for the acquisition.

Twists and Turns

It is worth mentioning that Warner Bros.' "sale" was a tripartite scuffle that lasted for nearly a year.

The first to make a move was actually the streaming overlord Netflix. On December 5, 2025, Netflix announced that it had reached an agreement with Warner Bros. to acquire its film and television production division and streaming business in a cash-and-stock swap deal, with a total transaction value of about $82.7 billion.

But only three days later, the plot reversed. On December 8, Paramount Skydance launched a hostile takeover bid for Warner Bros., bypassing the board of directors and directly speaking to shareholders: it would acquire all assets of Warner Bros. with all-cash at a price of $30 per share, with a total amount of up to $108.4 billion, including the cable network that Netflix disdains but is also a heavy debt disaster area.

A seesaw battle thus unfolded. According to foreign media reports, the Warner Bros. board of directors had repeatedly stated that it rejected Paramount's offer and insisted on supporting the Netflix plan; Paramount kept raising its bid, later raising the price from $30 per share to $31 per share, bringing the total price to about $110 billion.

The balance finally tilted in early 2026. On February 27, Netflix announced its withdrawal from the bidding. On the same day, Paramount Skydance and Warner Bros. signed the final merger agreement. In April, the shareholders of the latter voted to approve the agreement.

Of course, Paramount Skydance, which dared to snatch the "prey" from the giant Netflix and finally won, is no ordinary player. It was born in August 2025, formed by the merger of the time-honored studio Paramount and the independent production company Skydance Media.

The history of Paramount can be traced back to 1912. It once distributed the first American feature-length drama *Queen Elizabeth*. In the next hundred years, it successively produced classic works such as *The Godfather*, *Forrest Gump*, *Mission: Impossible*, and *Transformers*.

Skydance Media is an independent production company founded in 2010. It rose to fame in its early days by investing in and participating in the production of Paramount's blockbuster *Top Gun: Maverick*. The company's founder David Ellison has a more well-known identity — the son of Larry Ellison, the founder of Oracle. The $8 billion acquisition of Paramount last year was funded by the Ellison family.

When it came to this bidding for Warner Bros., the role of the Ellison family was no longer just the "fund provider". According to multiple reports, its profound political resources behind the scenes also provided support for this M&A.

According to the announcement, the merged new company will be renamed "Skydance". Its businesses include the film and television studios of Paramount and Warner Bros., streaming services such as Paramount+ and HBO Max, as well as two major news organizations, CNN and CBS News, making it a comprehensive entertainment company spanning film, television and news businesses.

After the completion of this merger, the "Big Five" pattern that Hollywood has maintained for several years has been officially rewritten. Disney, Universal Pictures, Sony, Paramount, and Warner Bros. — these five names once defined the power landscape of the entire U.S. film industry. Now with the merger of Warner Bros. and Paramount, the traditional "Big Five" studios are reduced to four, and an era has come to an end.

Tech Giants Favor Media Assets

Regarding this "century M&A", there is another noteworthy point: it has pushed Silicon Valley giants directly to the center of Hollywood's power.

As mentioned above, the Ellison family of Oracle played a catalytic role in this transaction, but this is not purely a support for family members.

According to Bloomberg, as early as July last year, Oracle negotiated a cloud service agreement with Paramount Skydance with an annual amount of $100 million, aiming to fully migrate Paramount's existing IT infrastructure to the Oracle Cloud platform. The agreement covers modules such as enterprise resource management, content asset management, audio and video streaming modules, and AI data processing tools.

In the open letter after Paramount's acquisition was completed, David Ellison mentioned that the company plans to migrate Paramount+ and Pluto TV to a "unified technology stack" to improve performance and reduce operating costs. This means that Warner Bros.' IT infrastructure may also be migrated to Oracle cloud servers in the future.

In fact, Oracle's entry into Hollywood is not an isolated case. Over the past few years, tech giants have been continuously "snapping up" media assets:

In 2021, Amazon acquired MGM for about $8.45 billion, connecting IPs such as 007 and Rocky with the Prime membership system, which was its largest expansion in the film and television field at that time;

In 2022, Elon Musk acquired Twitter (later renamed X) for $44 billion, taking one of the most influential social platforms in the world into his pocket;

In 2023, Microsoft completed the acquisition of Activision Blizzard for $68.7 billion, refreshing the M&A record of the game industry; in the same year, Apple continued to increase investment in Apple TV+, and won the Oscar for Best Picture with *CODA*.

Why are tech giants so persistent in media content? In fact, the logic behind it is not complicated.

The first is the binding of content and traffic. In the streaming era, whoever controls scarce top IPs controls the source of user attention.

The second is ecological synergy. Film and television content can be used for membership, advertising, cloud services, games and even e-commerce at the same time, leveraging the cross-monetization of the entire ecosystem.

The third is data. The training of large models has a surge in demand for high-quality corpora, images and videos, and the huge film and television database itself is a scarce asset.

The fourth is to control channels and discourse power. When a company controls content production, technology distribution and global communication at the same time, what it gains is not only commercial returns, but also influence at the cultural and even public opinion level.

But on the other side of the coin, there is growing backlash from the media industry.

According to foreign media reports, this merger of Warner Bros. and Paramount Skydance once drew public opposition from more than 1,000 Hollywood insiders. They believe that it will exacerbate the concentration of industry power, lead to layoffs, and further stagnate Hollywood; in addition, creators' employment, squeezed theatrical distribution space, and the boundary between AI and copyright have all become unavoidable controversies in this "technology + media" marriage.

For Skydance, the core logic of its defense is: only by uniting can it fight against larger tech rivals. This in itself is a thought-provoking paradox — in order to fight Silicon Valley, Hollywood has to embrace Silicon Valley first.

100 years ago, Warner Bros. bet on a technological revolution with *The Jazz Singer* and won, becoming one of the founders of the talkie era; 100 years later, it has become a bargaining chip for another technological revolution, placed on the negotiating table of the game between Silicon Valley and Hollywood.

This article is from WeChat official account "East Forty Street Capital" (ID: DsstCapital), written by Wang Manhua, published with authorization from 36Kr.