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.
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
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.
The year is 1989.
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.
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.
Three years later, Discovery, Inc., purchased WarnerMedia from AT&T and formed Warner Bros. Discovery.
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.
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
Inflation-adjusted U.S. box office earnings
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.
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.
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.
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.
Laurent Yoon, an analyst covering American media and the telecom industry at Bernstein Research, a global equity research and brokerage firm, said Paramount is willing to put itself in such a risky position while still having its own debt to service because it has limited choices in the new media business landscape.
“Legacy incumbent businesses are not positioned to do well in the industry,” he said. “They have to get bigger,” said Yoon, in order to survive. Scaling up can help them reduce costs and, hopefully, increase profits.
The rise of streaming has also significantly added pressure on the movie studios, giving audiences more reasons to stay home and watch movies from their couches instead of going to the theater. Despite their efforts to compete in the streaming world, traditional film studios have been losing money over the past few years. Meanwhile, Netflix, a streaming-first company, has seen a steady increase in its profits. Even though Netflix also carries significant debt, its profitability puts it in a much better position than the older companies.
Netflix had made an earlier offer for Warner Bros. for $83 billion but walked away from the bidding process, saying the deal was no longer financially attractive at the latest valuation.
As these companies consolidate and try to manage their debt, there have been downstream effects on the films being made and the workers making them. In its efforts to bring down debt and cut costs after the 2022 merger, Warner Bros. shelved several completed or near-completed films — including “Batgirl” — and laid off nearly 1,000 workers that June. A similar pattern emerged after the Amazon-MGM merger, with hundreds of employees in studio and streaming operations losing their jobs in 2024.
On April 13, 2026, over 1,000 writers, actors and directors released a letter opposing Paramount’s proposed acquisition of Warner Bros. Discovery, saying the deal would reduce competition and result in fewer movies in cinemas. As of June 1, the letter has received over 5,500 signatories.
“Our industry is already under severe strain, in large part due to prior waves of consolidation,” said the letter signed by actors and other industry professionals, including Jane Fonda, Joaquin Phoenix and Mark Ruffalo.
“A lot of creatives are against [the deal],” said Paul Dergarabedian, the head of Marketplace Trends at Comscore Movies, a media measurement and analytics company. “Usually, consolidation means that you could have a new regime in charge, you’re going to have new management teams and all that. They could decide fewer movies, cut back budgets, marketing spends,” Dergarabedian added.
David Ellison, CEO of Paramount Skydance, told thousands at the CinemaCon convention in Las Vegas in April, “I wanted to look every single one of you in the eye and give you my word: Once we combine with Warner Bros., we are going to make a minimum of 30 films annually across both studios,” seemingly promising a steady flow of employment for creatives.
It is too soon to say what the impacts of this latest merger will be. Even though this deal is in some ways unprecedented, “mergers are nothing new” in Hollywood, says Dergarabedian. And consolidation hasn’t been a death sentence for great cinema, either. As Dergarabedian points out, it was after the 1966 purchase of Paramount Pictures by Gulf and Western, an American conglomerate originally focused on manufacturing, that “The Godfather” was made.
ViacomCBS was renamed to Paramount in 2022.
Net debt number is the company’s total debt minus its cash and cash equivalents.
Net debt numbers for Warner Bros. Discovery for years before 2022 are shown only for Discovery Inc. Discovery Inc. acquired WarnerMedia from AT&T in 2022.
Net debt numbers for Paramount for years before 2019 are shown only for CBS Corporation. Viacom was merged into CBS in 2019 and the combined company was named ViacomCBS.
Data includes only the five major studios by market share: Walt Disney Studios, Sony Pictures, Warner Bros. Pictures, Paramount Pictures, and Universal Pictures, focusing on the mergers and acquisitions of their parent companies, i.e., The Walt Disney Company, Sony Group Corporation, Warner Bros. Discovery, Paramount Skydance Corporation, and NBCUniversal from 1989 to the present. This analysis only includes entities that make movies and specifically excludes television studios.
Sony’s acquisition of Guber-Peters Entertainment Company is excluded from the data because the studio’s last theatrical release occurred in the same year as the merger. Following the acquisition, Peter Guber and Jon Peters were designated to lead Sony’s newly acquired Columbia Pictures. Guber-Peters Entertainment Company was officially dissolved in 1991.
Only instances where one of the Big Five studios held a majority share are included. Parent companies, such as 21st Century Fox Entertainment, are excluded from this analysis, whereas subsidiary studios, such as 20th Century Fox, are included. Additionally, in-house studios operated by the Big Five, such as Disney Animation or Sony Pictures, are also excluded from the data.
Dates are determined by when the acquisition/merger deal was completed, not when it was first proposed.
The data shows when New Line Cinema was first brought under the Warner umbrella in 1989 with the acquisition of Turner Broadcasting. However, the studio operated independently under that parent umbrella until 2008, when it was folded into Warner Bros. Pictures, but it has not ceased operations as a studio.
Additional illustration and animation by
Comscore Movies, Box Office Mojo, LSEG data, Company financial reports
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