Paramount Skydance has launched a fresh $7.5 billion debt raise to help fund its massive $111 billion takeover of Warner Bros. Discovery. The move comes just days after the company cleared its final legal hurdles, putting the long-delayed merger on track to close by early October 2026.
The new financing is a senior secured term loan, often called an incremental Term B facility. It is part of a much larger debt package that Paramount is assembling to pay for the blockbuster deal. In total, the company intends to raise about $44.4 billion in additional secured debt. When combined with previous financing and cash on hand, this money will cover the purchase price for Warner Bros. Discovery and also help repay some of Paramount’s existing debt.
What the New Loan Means
The $7.5 billion loan is the first piece of a $49 billion debt sale that bankers are now preparing to launch. Bank of America, Citigroup, and Apollo Global Management underwrote the huge debt package earlier this year. They had already lined up strong investor interest before the deal was stalled by lawsuits. Now that the legal roadblocks are gone, the banks plan to start selling the debt in the coming weeks.
The full $49 billion package is split into three main parts:
- About $30 billion in investment-grade bonds
- $7.5 billion in investment-grade loans, which is the part now being syndicated
- Roughly $12 billion in second-lien bonds
Borrowers rarely sell a mix of high-grade and junk-rated debt at the same time. This unusual structure targets a wider range of investors in both U.S. dollars and euros than a typical leveraged buyout would. The debt was also structured to protect lenders if borrowing costs rise, which should prevent a repeat of the losses banks suffered on so-called hung loans in 2022.
A Long Road to the Finish Line
The path to this merger has been anything but smooth. Paramount Skydance, led by CEO David Ellison, won a bidding war against Netflix in February 2026 for control of Warner Bros. Discovery. The deal values Warner Bros. Discovery at about $81 billion in equity and roughly $110–111 billion in enterprise value, including debt.
The U.S. Department of Justice approved the deal in June without demanding changes to the business. But then a group of 12 state attorneys general, led by California’s Rob Bonta, sued to block the merger on antitrust grounds. The Writers Guild of America also filed its own lawsuit.
A settlement was reached on September 21, 2026. Under the agreement, Paramount committed to several concessions:
- Release at least 30 films in theaters each year
- Spend an additional $1.5 billion on U.S. film production over five years
- Keep both the Paramount and Warner Bros. studio lots in Los Angeles
- Establish independent editorial boards to protect the independence of CNN and CBS News
- Pay $17.5 million into the WGA health fund and cover legal fees
- Prohibit writer layoffs at CBS News Broadcast for five years
“We have complete clearance for this merger and look forward to putting these commitments into action,” David Ellison said after the settlement was announced.
California Attorney General Rob Bonta made it clear the settlement was not an endorsement of the merger. “I don’t think these two companies should merge,” he said at a press conference. “But that’s not something that we are focused on with our resolution here”.
What the Combined Company Will Own
The merger will bring together two of Hollywood’s oldest and largest studios under one roof. The combined company will own a vast portfolio of entertainment assets:
- Streaming services: HBO Max, Paramount+, Discovery+, and Pluto TV
- TV networks: CNN, CBS, Discovery Channel, TNT, TBS, HGTV, Food Network, and many more
- Film and TV franchises: DC Universe, Harry Potter, Mission: Impossible, Top Gun, and The Sopranos
Paramount has said the combined streaming services will have “a little over 200 million direct-to-consumer subscribers”. The company has also positioned the merger as a way to compete more effectively with Netflix and Disney+.
Foreign Investment and Regulatory Approval
A major part of the financing comes from outside the United States. Three sovereign wealth funds from Saudi Arabia, Qatar, and the United Arab Emirates have committed a combined $24 billion to back the deal. The FCC approved Paramount’s request to allow these foreign investors to hold indirect equity interests in the combined company, though they will have no voting stakes.
The FCC’s approval allows foreign ownership of up to 100% of indirect equity interests, well above the usual 25% limit for broadcast station owners. The regulator concluded that giving Paramount access to more capital would strengthen the broadcast industry and was “in the public interest”.
Critics, including FCC Commissioner Anna Gomez, warned that the move opens the door to behind-the-scenes influence over news operations like CBS and CNN.
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A Deadline with a Cost
Paramount is racing to close the deal by September 30, 2026. If the merger is not completed by that date, the company will owe Warner Bros. Discovery shareholders a $7 million daily fee for every day the deal remains unfinished.
Warner Bros. Discovery CEO David Zaslav told staff in a memo that the merger is expected to take effect “by early October.” David Ellison has said the company hopes to close in “approximately two weeks” from the settlement date.
Once the deal closes, the combined company is expected to carry about $80 billion in debt.
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Paramount’s $7.5 Billion Loan Is Just the Beginning: Inside the $49 Billion Debt Package Reshaping Hollywood
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