Skydance's $80 Billion Debt: Warner Bros.-Paramount Merger

David Ellison's Skydance has closed the deal to own both Paramount and Warner Bros., creating an entertainment giant that only Netflix and Disney top for scale. But the prize comes with an $80 billion debt load, leaving little margin for error, according to The Hollywood Reporter.

Thousands of layoffs are expected as the companies consolidate. Skydance has targeted $6 billion in synergies. Gerry Cardinale, Ellison's operating partner at RedBird Capital, told a conference that the savings will come from combining tech stacks, smarter marketing and streamlining vendors, not just firing people. But even Paramount cut about 10 percent of its workforce in 2025 as part of the Skydance deal.

Ynon Kreiz, the former Mattel CEO, will join as co-CEO. At Mattel, he slashed 22 percent of the workforce and restructured the company for a tech-forward future. Insiders expect him to move fast at Paramount.

Casey Bloys, the HBO Max chief who shepherded shows like "The Pitt" and "The Penguin," will run streaming for the combined company. One competing executive told THR that Bloys was the executive they "had to keep."

The streaming services will merge, and prices will likely rise. Ellison has promised to release at least 32 movies a year starting in 2029, along with 170 TV shows. DC is elevated in the new structure, no longer subservient to the larger Warner Bros. brand.

Real estate will shrink in New York, where the company now has multiple offices, but the two Los Angeles studio lots are safe. CBS News and CNN are still being sorted: Bari Weiss is editor-in-chief of CBS, while Mark Thompson remains chairman and editor-in-chief of CNN. Combining the two news divisions is seen as an obvious source of cost savings, but the two leaders' roles create complications. CNN is projected to have $1.8 billion in revenue in 2026, with steady EBITDA of around $600 million.

Warner Bros. Games is what one competitor called a "secret weapon," with IP including Mortal Kombat, Batman and Harry Potter. Ellison already launched a new gaming studio at Paramount.

Taylor Sheridan is expected to leave for NBCUniversal in a couple of years. And the debt must be serviced soon. As Morgan Stanley analyst Sean Diffley wrote, "the risk of not getting the asset was significantly greater." The hard part really is just beginning.

• David Ellison
• Paramount+
• Skydance
• streaming mergers
• Warner Bros.
• Ynon Kreiz