Archive: Laura Alier / Wikimedia Commons / CC BY 4.0
NEW YORK – Skydance, the media company that closed its acquisition of Warner Bros. Discovery on Oct. 6, said Monday it is targeting at least $6 billion in annual run-rate savings within three years, net of reinvestment. It also plans to launch a bundle of HBO Max and Paramount+ in early 2027. The company laid out the plan in a letter to shareholders issued with its third-quarter results.
The $6 billion is a target, not savings already achieved. The company says more than 20 workstreams are under way, with about 30% of the savings expected in year one and 70% through year two. It points to an expense base of more than $50 billion across the combined company.
The letter breaks the target into four areas: at least $2.2 billion from corporate overhead, real estate and facilities, including consolidating back-office functions, reducing management layers and rationalizing the office footprint while keeping its production lots; at least $1.0 billion from marketing; at least $1.4 billion from technology, by unifying its streaming and broadcast systems; and at least $1.4 billion from procurement and third-party spending. The company says one-time cash costs to reach the savings will be roughly $1.5 billion to $2 billion in 2027 and about $4 billion over the whole program.
The third-quarter numbers cover only the legacy Paramount Skydance business, which does not include Warner Bros. Discovery because the deal closed after the quarter ended. That business reported net earnings of $73 million and adjusted EBITDA of $1.0 billion on revenue of $7.0 billion, up 5% from a year earlier. The company says Paramount+ revenue grew 21%.
Why it matters: the savings plan is the main financial case for one of the largest media deals in years, and it sets a public yardstick for the combined company. The company also said it aims to reduce its net debt ratio to 3.0 times earnings by the end of 2029.
Still unknown: how many jobs the plan affects, which offices close, what the bundle will cost customers, and when each part of the savings arrives. The letter does not give job numbers.
File photo: the Melrose Gate at the Paramount Pictures studio lot in Los Angeles. It was not taken for this announcement.
JBizNews Desk | New York
© JBizNews.com. All rights reserved. Unauthorized reproduction or redistribution is strictly prohibited.
