A federal judge on Wednesday cleared the way for Paramount’s $110 billion takeover of Warner Bros. Discovery, signing off on a settlement between the companies and a group of 12 states that had sued to block the deal.
Judge Araceli Martinez-Olguin of the U.S. District Court entered the order, Al Jazeera reported, over objections about media consolidation and the editorial independence of the news outlets the combined company would control. Paramount Skydance said it expects the merger to close on Oct. 6.
The buyer is already rebuilding its leadership for the close. In a memo to employees obtained by Business Insider, David Ellison, Paramount Skydance’s chief executive, announced that Ynon Kreiz, chairman and chief executive of Mattel, will join as co-chief executive. Mr. Ellison will lead creative and technology strategy; Mr. Kreiz will run day-to-day operations and the integration of the two companies.
“Once the WBD transaction is finalized, I always planned to partner with an executive of Ynon’s caliber. Our skills and experience complement each other, and we share a vision for what this company can become,” Mr. Ellison wrote. “If you don’t know Ynon yet, you’re about to. If you do, you already know how lucky we are.”
Mr. Kreiz, who is to start on Monday, spent seven years pushing Mattel from toys into entertainment, turning brands like Barbie and Matchbox into film properties. Produced by Warner Bros., Barbie grossed more than $1.4 billion worldwide in 2023, though this summer’s Masters of the Universe fell short of expectations. Before Mattel he led Maker Studios, one of YouTube’s largest multichannel networks, and the Endemol Group. Mattel’s shares have fallen 24 percent in the past year, including a 4 percent drop after his departure was announced; the stock had already slid on weak holiday sales.
Larry and David Ellison spent two years assembling the company, and the next question is what it is for. “There’s an urgency at Paramount Skydance to get to scale,” Rich Greenfield, an analyst at LightShed Partners, told the journalist Peter Kafka on his Channels podcast. “They have their laser sight on Netflix.” The company has said it wants one streaming service but not whether it will keep the HBO brand, or raise prices to hold the HBO catalog.
Mr. Greenfield’s diagnosis is breadth. The two biggest streaming services by far are Netflix and YouTube, he said, and both work because viewers’ varied tastes train the recommendation algorithm. “There isn’t that much diversity on Paramount Plus. There isn’t that much on HBO Max either. And so putting one plus one doesn’t immediately equal seven.” Both services, he said, are undernourished.
The harder question is what A.I.-generated video does to the value of libraries that studios spent years and fortunes building. Generating a minute of video almost instantly already works in labs, Mr. Greenfield said, and films and shows are assembled from minute-long pieces; what stops mass use today is cost, a barrier he guesses falls within 12 to 18 months. “There’s going to be an explosion of content,” he said, and he sees YouTube, a platform for other people’s work, as the biggest beneficiary, with Netflix moving in that direction as it adds podcasts and short-form video.
His advice to the Ellisons is to follow. Owning the UFC rights and the makers of Stranger Things will not be enough, he said. “If you’re trying to win, you’re going to have to be a platform. The consumer is telling you that you need to do a little bit of everything.”