Skydance Corp. is preparing for major operational shifts in 2027 following its $111 billion acquisition of Warner Bros. Discovery, as executives target significant cost reductions to manage a debt load exceeding $80 billion.
As part of a strategy to prioritize streaming, the company announced Monday that it will bundle HBO Max and Paramount+ early next year. The company did not disclose pricing for the combined service.
In a letter to shareholders accompanying Paramount’s 3Q earnings report, CEO David Ellison and co-CEO Ynon Kreiz stated the bundle would offer "an even greater value" to customers compared to individual subscriptions.
The company is focused on restructuring its balance sheet, with Ellison committing to exceed an initial goal of $6 billion in expense reductions. Executives said they have identified "multi-billion dollar opportunities" for savings across four areas: corporate expenses, marketing, technology and procurement. Workforce reductions are expected, though the company has not provided a specific scale or timeline.
- Skydance projects at least $2.2 billion in cost reductions by:
- Eliminating redundant back-office and corporate functions
- Reducing management layers and increasing the use of artificial intelligence
- Rationalizing its office footprint
- It expects at least $1 billion in savings from streamlining marketing and promotional spending.
- Around $1.4 billion in savings is expected from unifying its streaming businesses and broadcast architecture, and integrating back-end technology.
- A further $1.4 billion in savings is tied to optimizing third-party spending, eliminating overlapping expenses, and centralizing purchasing decisions.
Skydance said it is confident in achieving the savings, citing its experience at Paramount, where a program is on track to deliver more than $2.7 billion in run-rate efficiencies by the end of 2026.
Some of the cost-cutting has already begun.
Because the acquisition of Warner Bros. Discovery closed Oct. 6, Monday’s earnings report covered only the Paramount portion of the enterprise.
Paramount reported third-quarter net earnings of $73 million, with adjusted EBITDA of $1 billion on $7 billion in revenue, a 5% increase year-over-year. The company said it remains on track to reach the high end of its 2026 profitability outlook of $3.9 billion.
Some of the cost-cutting has already begun.
Because the acquisition of Warner Bros. Discovery closed Oct. 6, Monday’s earnings report covered only the Paramount portion of the enterprise.
Paramount reported third-quarter net earnings of $73 million, with adjusted EBITDA of $1 billion on $7 billion in revenue, a 5% increase year-over-year. The company said it remains on track to reach the high end of its 2026 profitability outlook of $3.9 billion.