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Skydance details $6 billion in planned savings after Warner deal
CNBC reports Skydance outlined at least $6 billion in three-year cost cuts across corporate, marketing, streaming technology and purchasing after combining with Warner Bros. Discovery.
- New headline Was: “Skydance outlines its $6 billion in planned cost savings. Here's the breakdown”
- Our desk filed its story
Skydance on Monday laid out how it plans to extract at least $6 billion in cost savings over three years after combining Paramount Skydance with Warner Bros. Discovery, CNBC reported1.
In a letter to shareholders with Paramount Skydance's third-quarter earnings, the company said combining two streaming services, two film and TV studio groups, two television portfolios and overlapping corporate functions would reduce duplicative spending across an expense base of more than $50 billion1.
CNBC said Skydance projected at least $2.2 billion from eliminating redundant back-office and corporate functions, including cutting management layers, using more artificial intelligence and shrinking its office footprint1. It expects at least $1 billion from streamlining marketing and promotional spending, about $1.4 billion from unifying streaming businesses and broadcast architecture and integrating back-end technology, and $1.4 billion from optimizing third-party spend and consolidating purchasing1.
"We are confident in achieving these savings, drawing on our playbook from Paramount," the company wrote, according to CNBC1. That earlier program is on track for more than $2.7 billion in run-rate efficiencies by the end of 2026, CNBC reported1.
Some cuts have started: last month Skydance offered voluntary buyouts ahead of layoffs and adopted a five-day in-office policy, and last week eight executives left — four from Warner Bros. and four from Paramount, CNBC said1. The company has said it plans to merge Paramount+ and HBO Max and will take a first step early next year by offering a bundle of the services, according to CNBC1.
Legacy Paramount Skydance posted third-quarter revenue of $7.03 billion, roughly in line with StreetAccount's $7.04 billion estimate, and adjusted EBITDA of $1 billion versus estimates of $913.5 million, CNBC said1. The results do not include Warner Bros. Discovery, which closed after the quarter ended1. Skydance said it will give full-year guidance with fourth-quarter results early next year and will provide annual rather than quarterly guidance going forward1.
