Paramount Skydance Targets $6 Billion in Synergies After WBD Merger

By Elena Vasquez

Paramount Skydance booked $7 billion in revenue last quarter, up 5% year over year, and says the figure puts it on track for the high end of its 2026 profitability outlook. The number excludes Warner Bros. Discovery entirely, because the acquisition closed on October 4, five days after the quarter ended on September 30.

That timing left investors without a full picture of the combined entity. Co-CEOs David Ellison and Ynon Kreiz reported on Monday, but the Warner Bros. Discovery side of the business will not appear in the accounts until next quarter. Comparisons stay messy for another reason: the prior Paramount–Skydance merger closed on August 7, in the middle of Q3 last year.

What grew and what shrank?

Direct-to-consumer revenue rose 11% to $2.5 billion. Paramount+ revenue grew 21% year over year to just over $2.1 billion. Advertising moved the other way. Total ad revenue came in at $1.89 billion, down 3% from $1.94 billion the previous quarter. TV Media revenue fell 7% year over year to $3 billion, with advertising inside that segment down 8%.

Where does the combined company stand?

Even without financial reporting on the Warner Bros. Discovery side, Paramount Skydance claims credit for its wins. The shareholder letter states that Paramount and Warner Bros. together produced seven of the top 10 most-watched series across linear and streaming. Nielsen's Gauge report now ranks Skydance as the second-largest media distributor by share of total US TV time, behind YouTube.

Why bundle HBO Max and Paramount+?

The company will launch a bundle of the two services at the beginning of 2027. Ellison called the bundle "a first step towards a fully unified offering," an idea he raised long before the merger closed.

The logic is audience overlap, or the lack of it. "HBO Max and Paramount Plus are highly complementary offerings and over-indexed with different consumer segments and different parts of the country," said Ellison. The two services reach 203 million subscribers worldwide together.

Behind the scenes, integration on the Paramount side is already done. Pluto TV, acquired in August of last year, now counts 75 million monthly active users, and Paramount+ and Pluto run on the same tech stack. Ellison expects the migration of HBO Max onto that stack to move faster still.

How will the $6 billion in synergies be reached?

Skydance targets at least $6 billion in annual run-rate synergies (post-merger cost savings) over the next three years. Kreiz said much of the savings will come from streamlining marketing costs and the tech stack, including reduced spending with third-party vendors.

Revenue synergies will come from distribution and advertising in the television business. Advertisers will be able to buy media across the entire portfolio, which Kreiz said matters especially for sports now that CBS Sports and TNT Sports sit under one roof.

One constraint remains. The antitrust settlement that cleared the merger requires separate negotiations of the Paramount and Warner Bros. cable portfolios. Everything else in television, streaming above all, is set for further consolidation. "Once that's on one unified tech stack, it really does position ourselves to really be competitive with anyone," said Ellison.