Skydance Targets $6B Synergies, 3X Leverage by 2029

Paramount Skydance is chasing $6 billion in run-rate synergies within three years of its $110 billion merger with Warner Bros. Discovery, Chairman/Co-CEO David Ellison told investors on a 3Q26 earnings call Monday. That target comes alongside an $80 billion debt load — roughly 7X net leverage — which the company plans to cut to 3X by the end of 2029.

The combined Paramount+, HBO and HBO Max now reach 203 million subscribers globally, with Pluto TV adding 75 million monthly active users. Paramount+ alone closed the quarter with over 82 million subscribers, up 6% year over year.

Ellison also set a streaming roadmap: an HBO Max and Paramount+ bundled offering launches in early 2027, with the two services unified on a single platform in "roughly a year." Pluto TV and BET+ already moved into Paramount+ in 2026.

"We'll phase in new plans for pricing with discipline and consumer feedback, so we can continue to grow the services throughout the transition," Ellison said when asked when price increases would begin.

Starting in 4Q, the programmer will stop reporting quarterly subscriber numbers, "in line with other leading DTC players in the industry" such as Disney and Netflix.

Where do the $6 billion in savings come from?

The company broke the synergy target into four buckets:

• $2.2 billion from corporate overhead, real estate and facilities
• $1 billion from optimizing marketing spend
• $1.4 billion from unifying the tech stack
• $1.4 billion from reducing third-party vendor costs

Skydance expects to deliver 30% of the $6 billion in year one, with the remaining 70% realized through year two. Workforce reductions factor in too: the plan consolidates redundant back-office and corporate functions and reduces management layers while "scaling AI workflows and shifting to lower-cost support functions." A voluntary buyout program launched in late October, and layoffs at the company's game studios began Monday.

"This is more than cutting costs. It is a tech-forward transformation that will make us more efficient, more agile and create flexibility to reinvest for long-term growth and establish a healthy margin profile and free cash flow trajectory. This is about re-engineering how we work," said new Co-CEO Ynon Kreiz, who oversees day-to-day operations.

What did 3Q26 deliver?

The quarter reflects only PSKY's performance, since WBD joined the fold in October. The numbers:

• Total revenue of $7 billion, up 5% year over year
• Net earnings of $73 million
• Adjusted EBITDA of $1 billion
• DTC revenue up 11% to $2.5 billion, led by Paramount+, which grew 21% to $2.1 billion
• TV Media revenue down 7% to $3 billion, with ad revenue off 8% and affiliate revenue down 5% on continued pay TV subscriber erosion

The streaming growth engine is real — Paramount+ revenue rose 21% — but it's still outrunning a linear TV business shrinking on both ad and affiliate lines.

The next checkpoint: whether Skydance hits its 30% synergy target in year one while convincing investors that 7X leverage can fall to 3X by 2029 without starving the content and tech investments Kreiz says the transformation depends on.