Skydance's First Earnings Land With $80B Debt and a DC Shakeup

Skydance's first quarterly report since closing its $81-billion acquisition of Warner Bros. Discovery on Oct. 6 landed today, showing $73 billion in net income on roughly $7 billion in revenue for Paramount Skydance alone. Because the merger only closed in the current fourth quarter, most figures won't be consolidated with WBD until early next year. A call at 5 pm ET will give Wall Street its first real look at a company that now runs two major studios, streaming platforms and a huge linear TV portfolio.

Streaming was the bright spot. Direct-to-consumer revenue climbed 11% from a year earlier, reaching $2.5 billion, powered by Paramount+ revenue growth of 21% — its fastest quarterly pace this year — with ARPU up around 14%. DTC profit came in at $225 million. Studios revenue rose 23%, hitting $1.5 billion on strong secondary-market licensing and content made for third parties, with $129 million in profit.

TV Media told the other story, with revenue falling 7% to $3 billion as advertising dropped 8% and affiliate fees slipped 5%, tracking continued pay TV subscriber erosion. The division still booked $1 billion in profit and a 34% adjusted EBITDA margin.

Management, led by David Ellison and co-CEO Ynon Kreiz, is pitching scale: a combined $70 billion in annual revenue, at least $6 billion in synergies within three years, a net leverage ratio down to 3.0x by the end of 2029 with investment-grade credit metrics, and a bundled HBO Max–Paramount+ offering in early 2027. The company also launches with over $80 billion in debt, a load some on the Street call crippling and others call manageable but unforgiving.

The skepticism is loud. 'They have not done a lot to lay out the strategy. How do you integrate WBD? What does this company look like?' Lightshed Partners' Rich Greenfield asked on CNBC, with open questions also swirling around linear networks, distributor negotiations, asset sales and write-downs. TD Cowen analyst Doug Creutz flagged high leverage and integration risk, while Stone X's Daniel Turnos countered that the combination 'has no peer' on content scale and that default is unlikely. One live hazard: the NFL's 2029 opt-out, plus a 2027 change-of-control provision the league could technically trigger.

Skydance has committed to 30 films a year, rising to 32, under a five-year settlement with State Attorneys General who sued to block the merger. It's targeting $30 billion in combined content spending, claims the industry's largest theatrical output, most diverse film and TV library, and more than 200 million streaming subscribers. Since the Oct. 6 close it has installed a new management team, reshuffled divisions and made surprising ousters — including DC Studios' James Gunn and Peter Safran, announced earlier today.