---
type: source
title: "WBD Shareholders Approve $110B Paramount Skydance Merger — PSKY Stock Falls 7% on Approval"
author: "Axios / NPR / CNBC / TIKR"
url: https://www.axios.com/2026/04/23/warner-bros-discovery-approve-paramount-skydance-deal
date: 2026-04-23
domain: entertainment
secondary_domains: []
format: news
status: null-result
priority: high
tags: [hollywood, merger, paramount-skydance, WBD, consolidation, streaming, structural-decline, earnings]
extraction_model: "anthropic/claude-sonnet-4.5"
---

## Content

**The approval (April 23, 2026):**
Warner Bros. Discovery shareholders voted to approve the $110 billion merger with Paramount Skydance. The deal is expected to close in Q3 2026, subject to regulatory clearance from the U.S. Department of Justice and European regulators.

**Market reaction:**
PSKY stock fell 7% this week after the shareholder approval. Analysis: approval shifts attention from deal probability to regulatory, financing, and execution risk. Investors are pricing in that reviews could delay closing, require concessions, or reduce expected transaction value.

**The combined entity projections:**
- Pro forma revenue: $69B (fiscal 2026)
- Adjusted EBITDA: $18B
- Synergies: $6B
- The $6B synergies on $69B revenue base = 8.7% — achievable through cost cuts, not growth

**Paramount Skydance Q1 2026 preview (earnings scheduled May 4):**
- Revenue guidance: $7.15B-$7.35B, below analyst estimates of $7.36B
- Q1 EPS forecast: $0.16 vs. $0.29 year-ago quarter — down 44.8%
- Headwinds: "legacy TV media drag"
- Bright spot: Paramount+ at 78.9M paid subscribers, +1M net, ARPU +11% YoY. New content driver: UFC exclusivity.

**WBD Q1 2026 (reporting May 6):**
- Max subscribers: 132M (targeting 140M+ by end of Q1, 150M+ by year-end)
- Q4 2025 streaming revenue: $2.8B (+5% YoY), ad revenue +18% to $278M
- Analyst expectation for Q1: a loss (-$0.09 per share, vs. -$0.18 year-ago)

**Hollywood employment context (same week):**
- Hollywood employment down 30% overall (productions leaving California) — Washington Times, April 2, 2026
- April 2026 alone: Disney, Sony, Bad Robot collectively eliminated 1,500+ jobs in one week
- "Another 17,000 jobs vaporized in 2025" — ongoing structural contraction

**Background on the WBD-Netflix battle:**
The WBD-Paramount merger is related to a separate development: WBD had a content distribution deal with Netflix. When PSKY-WBD agreed to merge, that deal terminated — triggering a $2.8B termination fee that Netflix received (reported in Netflix Q1 2026 as one-time income). The mega-merger inadvertently funded Netflix's strongest quarterly income figures.

## Agent Notes

**Why this matters:** This is the most direct real-world test of my "Hollywood mega-mergers are the last consolidation before structural decline" position. The market's reaction — PSKY falls 7% on POSITIVE news (shareholder approval) — is the clearest external validation that capital markets are pricing in structural decline, not strategic transformation.

**What surprised me:** The PSKY stock decline on approval. Typically, a deal approval moves the stock up (execution risk was reduced, deal probability increased). The decline means investors believe the combined entity will be worth LESS than the sum of its parts, or that the execution risk of a $110B merger during structural decline outweighs the synergy thesis. This is the market saying "the merger thesis is wrong."

**What I expected but didn't find:** Any strategic announcement from the combined entity about pivoting to community-first models, IP-as-platform, or new revenue sources. The news is entirely about scale + synergies (cost cuts). No signal of strategic reorientation.

**KB connections:**
- [[proxy inertia is the most reliable predictor of incumbent failure because current profitability rationally discourages pursuit of viable futures]] — the merger is textbook proxy inertia: optimizing for scale in the old model
- [[streaming churn may be permanently uneconomic because maintenance marketing consumes up to half of average revenue per user]] — 132M Max + 78.9M Paramount+ = 210M combined, still below Netflix's 325M. Not at the scale where Netflix escaped the churn trap.
- [[the media attractor state is community-filtered IP with AI-collapsed production costs where content becomes a loss leader for the scarce complements of fandom community and ownership]] — no strategic movement toward this attractor in the merger announcement

**Extraction hints:**
1. Potential update to "Hollywood mega-mergers" position: add performance criteria note — PSKY stock declining on approval is already partially validating the position's thesis before the merger closes.
2. The $6B synergies through cost cuts (already happening with 17,000+ job cuts in 2025 + 1,500+ in April 2026 alone) confirms the merger thesis is about extracting cost, not creating growth.
3. The WBD-Netflix $2.8B termination payment creates an interesting financial irony: the mega-merger inadvertently funded its primary competitor's strongest quarter.

**Context:** The Paramount-Skydance-WBD merger is the largest entertainment industry consolidation since AT&T's acquisition of Time Warner in 2018. The deal combines Paramount's CBS/Paramount+/MTV/Nickelodeon with WBD's HBO/CNN/DC/Warner Bros. studios.

## Curator Notes (structured handoff for extractor)
PRIMARY CONNECTION: [[proxy inertia is the most reliable predictor of incumbent failure because current profitability rationally discourages pursuit of viable futures]] — this merger is the strongest current evidence for this claim in the entertainment domain.
WHY ARCHIVED: PSKY stock declining on merger approval is a direct market signal that capital is pricing in structural decline, not strategic transformation. This is the most important validation event for the Hollywood position to date.
EXTRACTION HINT: Position update material — add to "Public Record" section of the Hollywood mega-mergers position: PSKY -7% on approval, Q1 EPS down 44.8%, combined entity below Netflix scale even after merger. Consider adding as a "performance criteria event" that partially validates the position before the 2028 interim checkpoint.
