Skydance Warns of $200M Q4 Hit as Warner Bros Film Slate Drags

Skydance used its Q3 earnings call to flag a $200M hit to Q4 adjusted EBITDA, and the Warner Bros movie studio is the reason. CFO Dennis Cinelli said the headwind covers pictures already out this quarter plus titles still to come. The merger only closed five weeks ago, so Warner Bros' consolidated results weren't part of the quarter Skydance just reported.

One film is doing most of the damage. Digger, the Tom Cruise political satire, burned through $160M before global marketing and returned just $50.3M worldwide. Cinelli said Warner Bros is otherwise tracking to Skydance's underwriting plan, and that Paramount remains on course for 2026 guidance at the high end of its profitability range — $3.9B in adjusted EBITDA.

Co-CEO David Ellison told listeners the 2026 Paramount film slate should deliver $500M more in lifetime profits than last year's, and he's still hunting $6B in merger synergies. His fix for the Warner Bros side is the same playbook he ran at Paramount: greenlight more selectively, chase profitable streaming growth over subscriber counts, tighten linear and squeeze the cost structure. “We've proven it works, and we're confident it will work again,” he said. He also credited HBO Max with strong revenue growth.

Co-CEO Ynon Kreiz said the businesses he's examined are in strong shape and praised the Warner Bros Discovery team for delivering through the close, with the movie studio as the single soft spot. The box office backs that up. Warner Bros hasn't landed a single film over $100M domestic this year, with Supergirl, The Bride and Digger among the misfires. Through Jan. 1–Nov. 9, Warners sits at $569M domestic, down 70% year over year, while Paramount's $537M is up 15%. Together the studios count $1.1B, trailing Universal ($1.9B), Disney ($1.6B) and Sony ($1.4B). Paramount's bright spots: Scream 7 at $121.9M domestic and Scary Movie at $108.2M.

Skydance also announced James Gunn and Peter Safran are out as heads of DC Studios, replaced by Jeremy Latcham, who left the Disney-owned studio in 2017. Ellison wasn't all gloom on the Warner Bros front, calling New Line's 2027 Christmas release Lord of the Rings: The Hunt for Gollum “a compelling theatrical offering.” And a reported $800M loss for Warners' 2026 slate? According to Deadline, that figure is false.

The Q3 report didn't fold in Warner Bros figures because the deal closed in Q4, but Paramount brass made clear what's coming: the studio's near-term film slate will more than offset the strong Paramount slate in the fourth quarter.