‘Leaner and more nimble’: Skydance eyes US$6bn in savings after Warner Bros Discovery deal

Paramount has completed its acquisition of Warner Bros Discovery, bringing some of the biggest names in global entertainment under a single company as the newly formed Skydance targets more than US$6 billion in savings over the next three years.

The mega-merger brings together two major film studios, more than 200 million streaming subscribers and a sprawling television, news and sports portfolio spanning Paramount, Warner Bros, CBS, HBO, CNN, CBS Sports and TNT Sports.

It also puts an extraordinary collection of entertainment franchises under the same corporate roof, from Harry Potter and The White Lotus to Top Gun and SpongeBob SquarePants.

The combined business, now trading as Skydance, said it generates nearly US$70 billion in revenue and spent more than US$30 billion on content over the past 12 months. It plans to produce at least 30 theatrical films a year alongside more than 180 television shows and series.

But the integration will also bring significant cost cutting.

Skydance is targeting at least US$6 billion in annual "run-rate synergies" within three years, with savings expected to come primarily from technology, integration and procurement, marketing and real estate rationalisation.

The company said the changes would make it “leaner and more nimble”, while freeing up investment in content, creators and technology.

David Ellison, chairman and CEO of Skydance, described the completion of the deal as a “historic day” for the company and the wider entertainment industry.

“From the start, our ambition was to bring these two storied studios together and create a stronger competitor, with the talent, resources, and reach to tell great stories in every genre, on every platform, for audiences everywhere,” Ellison said.

“Now that ambition is a reality. We're grateful to everyone who made this possible – the employees, creative talent, and production teams of both companies, who worked tirelessly to get us here and inspire audiences around the world every day, as well as the advisors and partners who guided this transaction to completion.”

The combination will also reshape Skydance’s streaming business. Its two global streaming services HBO Max and Paramount+ will be unified into a single service over time, with the company promising significant improvements to its direct-to-consumer products.

Skydance expects the combined business to generate more than US$10 billion in free cash flow by 2030.

Gerry Cardinale, founder and managing partner of RedBird Capital and a Skydance board director, said the deal came as the wider media landscape undergoes “transformational change”.

“By applying our owner-operator model to Paramount and WBD's unmatched portfolio of iconic franchises, premium original programming, and live sports rights, we can protect that legacy while building for a media landscape that's undergoing transformational change,” Cardinale said.

The transaction received regulatory approval across nearly 70 jurisdictions. Warner Bros Discovery shares have ceased trading on Nasdaq.

The Ellison family now holds the largest equity stake in Skydance, while the Ellison family and RedBird Capital together control 100% of the combined company’s voting shares.