Media Giant Skydance Debuts With Big Assets, Big Debts, Big Challenges

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Skydance, the throwback name and mammoth result of David Ellison’s two years of audacious and somewhat improbable financial engineering, debuted today with an epic collection of entertainment and media assets, a stunning level of debt, and daunting challenges to thrive and profit amid a fast-changing, AI-fueled future.

First, the good news. Skydance merges the holdings of Paramount and Warner Bros., two of Hollywood’s iconic, century-old studios and their many related assets.

The list of holdings is long:

• movie and TV production, marketing and distribution operations;
• century-old film and TV libraries from Warner and Paramount, augmented by the pre-1988 MGM output that came when Ted Turner merged his operations with a long-ago version of Warner Bros.
• studio lots in Hollywood and Burbank, and other facilities across the Los Angeles area and beyond;
• broadcast network CBS, which has been a consistent ratings winner even as broadcast declines;
• cable networks including HBO, CNN, TNT, TBS, Discovery, Comedy Central, MTV, Nickelodeon, and BET, plus international operations in dozens of countries;
• a bevy of excellent sports rights, including the NFL, college football, Major League Baseball, NASCAR, the NHL, and European sports powerhouse Eurosport, which owns Olympic TV rights on that continent’;
• game publisher Warner Bros. Games and Paramount’s more nascent operation;
• streaming services HBO Max, Paramount Plus, Pluto, and the far smaller Discovery+.

Now to mash that all together into one giant entertainment company. The past week has seen rapid-fire headlines in the entertainment trades, detailing which executives will be running the much larger combined operation for each major segment of the company, and also which prominent execs are suddenly, sometimes unexpectedly unemployed.

HBO’s awards magnet Casey Bloys, who has presided over shows that attracted more than 1,000 Emmy nominations in the past decade, beat out former long-time Netflix executive Cindy Hollander at Paramount to run the streaming operations.

Analysts estimate, with duplicates removed, the subscription services (Pluto is a free, ad-supported service) that roughly 90 million people are paying customers. That puts it still only about 40% as big as Netflix, which last reported 325 million subscribers at the end of 2025. Disney’s combined Disney+/Hulu/ESPN streaming operations have around 150 million subscribers.

It will be difficult to further grow Skydance’s streaming operation in the United States, where streaming growth is largely flat, customer additions usually coming at the expense of competitors. That means the big growth opportunity will come overseas, and require significant investment in local programming to fully compete.

On the film side, Dana Goldberg and Josh Greenstein beat out Warner’s Mike DeLuca and Pam Abdy, even though the latter two presided over a remarkable 2025 that garnered 11 Oscars for critical and commercial hits such as Weapons, Sinners, and One Battle After Another.

This year, however, was a different story for Abdy and DeLuca, with several expensive misses punctuated this weekend by Digger, the massively expensive Tom Cruise satire whose opening weekend bombed so badly that it is projected to lose $160 million.

Perhaps even more importantly, Goldberg and Greenstein have personal relationships with Ellison. Goldberg has worked for Ellison for years, and started the original Skydance TV operation; Greenstein, a former Sony film executive, drives race cars with Ellison on weekends.

Now they’ll be tasked with overseeing the production and distribution of at least 30 films a year, part of the expensive promises Ellison made to Hollywood unions, exhibitors and a dozen state attorneys general to get the deal finally closed.

That will not be an easy thing to do successfully, however. U.S. theatrical box office is having its best year since before the pandemic, but still seems unlikely to surpass total domestic returns in any of the five years before the pandemic hit. Growth is coming only from selling more expensive, rather than just more, tickets.

On top of that, finding, acquiring, developing, producing, marketing and distributing a film about every 10 days over the next five years, as Ellison has pledged, is a prodigious organizational and creative task that no one else in Hollywood even attempts.

Only Netflix, with its 40 production centers around the world, pumping out content for local and global audiences comes close to that sort of output. Can Skydance do the same? One anonymous insider quoted by Vulture said, given the pair’s background and the task before them, that it will be “a disaster.”

Maybe. Or maybe Ellison brings on more executive help, as he did in hiring Mattel CEO Ynon Kreiz with a hefty contract to be his co-CEO. Kreiz not only presided over the Mattel makeover that led to $1.4 billion hit movie Barbie, he previously oversaw digital operations (including animation) for Sony’s film and TV operations. He is, it’s worth noting, also one of the very few outsiders Disney’s board interviewed when considering who would succeed Bob Iger as CEO.

Overall, though, between Skydance’s broadcast network, many cable channels, and streaming operations, it claims an aggregated 13% share of total TV view time, according to an analysis of Nielsen figures by equity analysts MoffettNathanson. That’s roughly as much as long-time leader YouTube.

Owl & Co., the industry analyst firm founded by former Fox TV executive Hernan Lopez, tapped different data to look at how Skydance operations compare in terms of attention and viewership with entertainment competitors and even other companies.

As the graphics show, the combined company will have a very large, relatively lucrative footprint in media and culture. That will matter in an era when attention is the coin of the realm.

Ellison’s broader case for his expensive deal is that only a handful of companies with gargantuan scale and output will be able to compete in the coming era. If nothing else, his company will indeed have remarkable scale, and a cultural footprint across most traditional platforms that few can match. But it will come at a fearsome cost.

Other corporate versions of The Hunger Games have been playing out across the two now-combined organizations, and now will start in earnest as Ellison turns to the biggest challenge before him: making his giant company make sense financially.

The $111 billion deal involves nearly $80 billion in new and carried-over debt, for crushing debt-to-EBITDA ratio north of 6X. Ellison has said he plans to reduce that debt load to a 2X ratio within three years. Good luck.

Most expect thousands of layoffs to come, though deal backer Gerry Cardinale of RedBird Ventures said the company will be focused on growing, rather than cutting.

Indeed, to pay down that debt will mean continued harvesting of the money generated by fading broadcast and cable operations, without hamstringing them so much with cuts that it hastens the decline of the legacy platforms. Streaming, the lower-margin successor to broadcast and cable, will require continued substantial investment to draw customers in.

Worse for Ellison’s intentions, the promises he made to close the deal will add plenty of costs to his pricey deal. Making 150 films in five years (with $30 million penalties to be paid for every film that doesn’t get made under the quota) is a high-risk way to spend a lot of money.

He also committed to keeping both historic studio lots, in the heart of Los Angeles’ Hollywood neighborhood and in Burbank, and spending $350 million a year on production within the state.

And, as long-time cable executive Tom Rogers pointed out today on CNBC, even the cost of that money got a lot more expensive in the 14 months since Ellison first bid on Warner Bros. Discovery, with rising interest rates adding about $400 million in borrowing costs.

There’s also the question of how much audiences, especially younger ones, want their entertainment in legacy format, platforms and viewing experiences, especially amid the dislocations and transformations of AI creations and powerful AI-fueled tools.

Rogers rightly credits Ellison with the persistence and audacity to pursue and ultimately acquire first Paramount and then Warner Bros. Discovery, though his dealmaking admittedly was only possible through the largesse of his centi-billionaire father, Oracle co-founder Larry Ellison, and $24 billion from three Middle Eastern sovereign wealth funds. But he did it.

It’s worth noting, though, as Rogers did, that investors were not particularly enthusiastic about the new company’s prospects once it officially debuted.

Shares dropped as much as 4% today before settling at $9.53 after hours, still down 2.5%. That left David Ellison’s great creation with a market capitalization of $10.7 billion, soldiering on $80 billion in debt and so, so many questions.