Skydance details $6 billion cost cuts, sets HBO Max-Paramount+ bundle launch

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Skydance details cost cuts, bundle

Highlights

Skydance targets $6 billion in cost cuts over three years post-Warner Bros Discovery acquisition, with 30% savings expected in year one.
A streaming bundle merging HBO Max and Paramount+ will launch early next year, as Skydance shifts focus to profitability and engagement over subscriber counts.
Gross debt stands at $87 billion post-acquisition, Warner Bros film underperformance could reduce Q4 profit by up to $200 million, and Jeremy Latcham replaces James Gunn and Peter Safran at DC Studios.

Integration plan and streaming strategy

As reported by Reuters, Skydance says in its third-quarter earnings statement that it is confident it can deliver $6 billion in promised cost cuts over three years after completing its Warner Bros Discovery acquisition last month.

The company expects to realize 30% of those savings in the first year. It plans to cut at least $2.2 billion from corporate overhead and real estate, reduce marketing costs by $1 billion, or 20%, and save about $1.4 billion through lower technology spending.

Skydance also says it will launch a streaming bundle combining HBO Max and Paramount+ early next year. The merged business is relying heavily on streaming products for growth, and Paramount+ revenue rises 21% in the third quarter.

When combined with premium cable channel HBO and HBO Max, the services reach 203 million subscribers globally. Skydance says it will stop disclosing quarterly subscriber figures, mirroring a broader industry shift toward profitability and engagement as key growth measures.

Debt, earnings outlook and competitive pressure

Before the Warner Bros Discovery purchase was completed, the Paramount business reports quarterly revenue of $7 billion for the period ended in September, up 5% from a year earlier. Skydance says it will provide full-year guidance for the combined company when it reports results for the December quarter.

The acquisition leaves the company with $87 billion of gross debt and about $10 billion in cash, as management works to integrate the businesses. The combined group now includes Warner Bros and Paramount film studios, the CBS broadcast network, CNN and a broad portfolio of cable channels.

Skydance says underperformance in Warner Bros' film slate is set to reduce fourth-quarter profit by as much as $200 million. The company also announces executive changes at DC Studios, where James Gunn and Peter Safran step down as heads and Marvel veteran Jeremy Latcham takes over as president and chief creative officer, while Gunn and Safran return to creative roles.

The new company is competing not only with Netflix and Walt Disney, but also with digital platforms such as YouTube and TikTok that are drawing audience attention. That pressure is adding urgency to Skydance's cost-cutting plans and its push to build scale in streaming.

Earlier, we reported that the S&P 500 hovered near 8,000 as investors weighed third-quarter earnings against elevated Treasury yields and oil above $105.

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