Skydance targets $6B in cost savings after Warner Bros. Discovery merger

US media firm Skydance detailed plans to deliver at least $6 billion in cost savings within three years following its acquisition of Warner Bros. Discovery.

In a shareholder letter on late Monday, the combined company also announced plans to launch a bundled streaming offering of HBO Max and Paramount+ in early 2027.

Skydance completed the Warner Bros. Discovery acquisition on Oct. 6 using $47 billion in new equity and $57 billion in new secured debt, leaving gross debt at $87 billion.

To cut costs across a $50 billion-plus expense base, Skydance targets at least $2.2 billion in corporate overhead and real estate reductions by consolidating back-office functions and scaling artificial intelligence (AI) workflows.

The company also expects at least $1.4 billion in annual technology savings by unifying its streaming and broadcast platforms and deploying AI coding tools.

Another $1.4 billion in savings will come from centralized procurement and vendor management, alongside at least $1 billion from streamlined marketing spend.

One-time cash costs to achieve the synergies are projected at roughly $4 billion overall, as Skydance aims to cut net leverage to 3.0x by the end of 2029.

Together, Paramount+, HBO, and HBO Max reach 203 million aggregate subscribers worldwide, and Skydance aims to align backend streaming systems within a year of closing.

For the third quarter, which closed prior to the merger, standalone Paramount Skydance posted $73 million in net earnings on $7 billion in revenue, up 5% year-on-year.