Paramount and Warner Bros are now one Hollywood giant: Skydance

The Paramount-Warner Bros merger is done. Here's how it could affect Canadians

Co-CEOs David Ellison and Ynon Kreiz now control one of the world's largest entertainment companies

It's official: Skydance-owned Paramount has closed its $81 billion US takeover of Warner Bros. Discovery.

The companies completed the deal on Tuesday, ushering in a new Hollywood giant now going by the simpler name "Skydance."

The merger brings two of America's oldest moviemaking studios together — and HBO Max, titles ranging from Harry Potter to Sinners and even networks like CNN find themselves under the same roof as Paramount+, CBS and the likes of Top Gun and The Godfather.

All of them will come under the helm of billionaire David Ellison, and his new co-CEO Ynon Kreiz (formerly of Mattel), further concentrating power in an industry already run by just a handful of major players.

Ellison has signalled he eventually intends for Paramount+ and HBO Max to be combined into one single streaming service.

But currently in Canada, HBO content is available exclusively through Bell Media on Crave, Rogers has a deal to licence Discovery content, and Corus has an arrangement for some Paramount titles, including the Cartoon Network.

Those are multi-year deals, and although we don't know when they expire, it means the streaming landscape is expected to remain the same in Canada for the next several years.

While Skydance may be looking to consolidate its streaming services in the U.S., it may not make financial sense in this country, said Stephen Zolf, partner in the competition and communications group at the law firm Aird & Berlis in Toronto.

"We are a relatively small market compared to the U.S.," he told CBC news. "If you are the program rights holder, it might make more economic and commercial sense for you to continue to park it in Canada with a broadcaster here, like Crave, because, you know, they earn a lot."

Bell Media says Crave remains home of HBO and HBO Max programming in Canada through a long-term deal with Warner Bros. Discovery. (Graeme Roy/Canadian Press)

While access to streaming services might remain the same, prices are expected to rise, said Mike Proulx, vice president and research director at market research and advisory firm Forrester.

"We've seen a flurry of price hikes over the last five years as every major streaming service has tried to achieve profitability," he told CBC News.

"So you can expect that whatever configuration that Skydance ends up with ... it is going to lead to downstream price hikes to be able to not only grow profitability, but pay off some of the debt that the company's going to have to deal with."

As part of a settlement deal with U.S. states opposed to the merger, Paramount promised to release at least 30 films each year for the next two years — and distribute them in theatres.It also agreed to release 32 films in each of the three years after that, but only 50 per cent of those movies would have to be “produced or jointly produced” by the combined company.

That's bad news for fans of independent cinema, according to Keldon Bester, executive director of the Canadian Anti-Monopoly Project, who says he is most worried about what happens in the medium term, after this five-year commitment is complete.

"We know that the film industry in whatever form is going to continue on well beyond that," he said.

"From a consumer perspective, I think you're going to see a continuation and an acceleration of a trend where there really are fewer movies coming out. And if they are coming out, they really are limited to these tent-pole productions."

An aerial view of the Paramount logo displayed on the water tower at Paramount Studios in Los Angeles, California. A state-led antitrust lawsuit challenging Paramount Skydance’s merger with Warner Bros. Discovery was announced as settled in September, clearing a major legal hurdle for the deal. (Mario Tama/Getty Images)

Bad news for Canadian production

Even in the short term, Paramount's promise to make more films may not result in more work for Canadian actors, directors and film crews.

The company has also pledged to increase spending on film production in the U.S. by at least an additional $1.5 billion US over the next five years.

Moreover, Skydance has already signalled it needs to find places to save money and, according to a report from Variety, some of that will come from cutting jobs.

A report issued by Los Angeles County in August, estimates the merger could result in 4,500 film and TV jobs being lost in L.A. alone over the next three years.

Bester believes that means there will be less work north of the border too: "We should expect a bit more of a more fierce knife fight over where production actually occurs as this pie continues to shrink."

Actor Sally Field voiced her opposition to the Paramount-Warner deal when she accepted an award at the Emmys in September. (Patrick T. Fallon / AFP/ Getty Images)

In April, thousands of movie stars, writers, directors and other professionals announced their "unequivocal opposition" to the Paramount-Warner merger.

The open letter — which was signed by long-outspoken critics of the deal like Jane Fonda and Mark Ruffalo, as well as Hollywood heavyweights from Canadian director Denis Villeneuve to J.J. Abrams — warned of fewer jobs and "less choice for audiences in the United States and around the world."

Meanwhile, some other stars lined up to back Paramount as Ellison reiterated his commitments to the movies.

At CinemaCon this past spring, the company debuted a glossy mini movie about the studio directed by Jon M. Chu and narrated by Tom Cruise — who ended the spot atop the iconic Paramount water tower, with the words "the future is paramount and the future looks pretty great from here." Director James Cameron also doubled down on his support of Ellison.

When accepting her Emmy last month, Remarkably Bright Creatures actor Sally Field — who also signed the open letter in opposition to the Paramount-Warner deal — stressed that "unique storytelling matters" and "we can't let those voices be silenced, or compromised or merged."

U.S. President Donald Trump has regularly attacked reporting he deems unfavourable at CNN (most recently attempting to bar the outlet from the White House altogether). Over the course of the Warner buyout, his administration wasn't afraid to chime in about hopes for a new owner.

In December — days after Paramount launched its hostile bid for Warner — Trump said CNN spread "poison and lies," adding that "I think the people who have run CNN for the last long period of time are a disgrace" and "it's imperative that CNN be sold."

The White House took aim again at CNN in March, over the network's coverage of the U.S.-Israeli war against Iran. At the time, Secretary of Defense Pete Hegseth told reporters that "the sooner David Ellison takes over that network, the better."

Ellison has said editorial independence will be maintained at CNN, the company also agreed to form a "News Editorial Independence Board."

But critics point to turmoil already seen at CBS under Skydance ownership — and aren't convinced this new body will move the needle much, because Ellison is set to have ample oversight over appointments. Outside this board, however, the combined company is retaining Mark Thompson as CNN's editor-in-chief.

David Ellison, right, and wife Sandra Lynn Modic walk to the White House to attend a state dinner hosted for China's President Xi Jinping, last month in Washington. (Carolyn Kaster/The Associated Press)

Trump has held a long relationship with the billionaire Ellison family.

Paramount's chief reportedly hosted a dinner in Washington in Trump's honour back in April, on the same day Warner shareholders gave their greenlight for the merger.

And in June, just two days after the U.S. Justice Department said it wouldn't intervene in the deal, Ellison attended an Ultimate Fighting Championship match on the White House lawn for Trump's 80th birthday (streamed by Paramount+).

with files from the Associated Press