Skydance Deal Tests France's Cultural Exception

Paramount has completed its $110 billion acquisition of Warner Bros. Discovery, forming a new media entity called Skydance. The new company includes major studios such as Warner Bros., Paramount Pictures, and HBO, alongside news platforms CNN and CBS. The transaction concluded after a federal ruling against 12 US states that attempted to block the deal on antitrust grounds in late September.

France’s “cultural exception” policy requires international film and platform providers to actively invest in the preservation and stimulation of the French creative economy. Under this arrangement, while foreign entities may sell content to French audiences, they must contribute to local audiovisual production.

The formation of Skydance raises questions about how a heavily indebted global studio will operate within France’s protected audiovisual market. The company began with nearly $80 billion in debt and aims to cut costs by $6 billion over three years. Consolidation may increase local content obligations under France’s SMAD regime, which requires foreign on-demand providers to allocate 20–25 percent of French revenue toward European and French-language productions.