Warner Bros. Discovery stopped existing as an independent company on Tuesday. Its shareholders got $31.00 in cash per share, a 147% premium over WBD’s unaffected stock price of $12.54 — the price before Netflix and then Paramount Skydance started bidding for it. The combined company, now called Skydance, started trading on the New York Stock Exchange under the ticker SKYD, replacing both WBD on Nasdaq and Paramount Skydance’s old PSKY listing. The equity purchase price is roughly $110 billion; the enterprise value, which adds in WBD’s existing debt, is closer to $111 billion, a distinction outlets use interchangeably and that matters only if you’re trying to reconcile two headline numbers that both appear in the same week’s coverage.
David Ellison chairs the combined company as CEO, alongside Ynon Kreiz as co-CEO — hired largely to make the harder integration calls. On the technology side, chief product officer Dane Glasgow, who joined from Meta after stints at Google, eBay and Microsoft, sent staff a memo on the new “Product & Tech” team that Business Insider obtained. It reads like standard post-merger integration copy — “a bias for action under ambiguity,” letting “the best idea win, full stop” — and what it’s actually describing is the unglamorous work of reconciling two separate codebases, billing systems, DRM stacks and org charts built by two companies that, until Tuesday, had never shared an engineering roadmap.
The clearest operational news came from Skydance itself: all of its direct-to-consumer apps, including HBO Max, Paramount+ and Discovery+, “will unify into a single service over time,” Skydance said in a statement reported by Ars Technica. Ellison told reporters the same day that merging the two tech stacks “will take a period of time,” and that “in the immediate you will see them operated separately.” Casey Bloys, HBO Max’s content chief and the presumptive head of the combined streaming business, had already hedged toward a bundle rather than a merger at Bloomberg’s Screentime event on October 1, pointing to the HBO Max–Disney bundle as a model: “I don’t want to comment on what is going to happen,” he said, “but I would point to the HBO Max-Disney bundle, which has been very successful… So could you see something like that happening? That would make a lot of sense.” Paramount’s own former streaming chief, Cindy Holland, left the company weeks before the deal closed, which settled, in practice, which side of the merged business runs direct-to-consumer.
The overlap problem
The case for a bundle over an immediate merge shows up in the subscriber math. More than a quarter of HBO Max’s US subscribers already pay for Paramount+ too, according to a Hollywood Reporter analysis. That’s the exact audience a re-platforming would put at risk — merge the back ends badly and you lose a user who was already paying for both products separately.
Paramount+ ended 2025 with 78.9 million subscribers; WBD’s streaming business, mostly HBO Max, ended 2025 with 131.6 million. Add them and you get 210.5 million, which is where Skydance’s own figure of “more than 200 million” comes from. WBD had also guided to more than 150 million by the end of 2026 — a target, not a reported result, and one that neither company will update in the same format now that they report as a single entity.
Paying for it
The deal’s capital stack has two layers. Equity: about $47 billion, contributed at $12 a share, led by Larry Ellison, RedBird Capital Partners, LionTree and the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi — the Ellison family and RedBird alone hold all of Skydance’s Class A voting stock. Debt: roughly $49 billion, syndicated by Bank of America, Citigroup and Apollo Global Management, down from an initial $54 billion commitment after syndication, including a late $7.5 billion incremental term loan raised days before closing. On top of that, Skydance assumed WBD’s own existing debt onto its balance sheet.
| From | To | How |
|---|---|---|
| Equity backers (~$47bn at $12/share: L. Ellison, RedBird, LionTree, Gulf sovereign funds) | Skydance (new parent) | capital |
| Debt syndicate (~$49bn in loans/notes led by BofA, Citigroup, Apollo) | Skydance (new parent) | loans |
| WBD's existing debt (assumed onto the new balance sheet) | Skydance (new parent) | assumed |
| Skydance (new parent) | Former WBD shareholders ($31.00 cash per share) | cash-out |
Based on Variety, reporting on deal financing
The result is a company Skydance itself describes as carrying roughly $80 billion in net debt against projected annual revenue of nearly $70 billion, with net-debt-to-EBITDA leverage the company expects to run near 7x through 2026 and 2027 before falling to a targeted 3.0x by the end of 2029 — a four-year deleveraging bet that depends entirely on the $6 billion in run-rate synergies Skydance has promised investors it can wring out within three years, the same synergies that, so far, mostly consist of a product chief’s memo about moving fast.
The rating agencies’ math disagrees with the company’s
Fitch cut Skydance’s rating a further notch, from BB+ to BB, the day the deal closed, following a similar cut from S&P in late September, Variety reported. BB+ was already junk — Fitch had cut Paramount from investment-grade BBB- when the deal was first announced in March. Fitch’s own leverage estimate — 7.8x in fiscal 2026, easing to 6.2x in 2027 and 4.5x in 2028 — is less optimistic than Skydance’s path to 3.0x by 2029, and the gap is the synergy schedule: Fitch is pricing in cost cuts landing slower than the company’s own guidance assumes. The market’s initial verdict: Skydance’s stock closed its first NYSE session at $9.51 a share, below the $12 a share its equity backers paid in February.
What the states extracted on the way out
A federal judge, Araceli Martínez-Olguín, cleared the deal’s main antitrust hurdle in late September, approving a consent decree with 12 states that had sued to block the merger, calling it “a fair, reasonable, and good faith approach to address the competitive harms” the states alleged. The decree runs five years. It requires the combined company to release at least 30 films a year in US theaters for the first two years — including 20 wide releases on 2,000-plus screens with a 45-day theatrical window and at least four independent films — rising to 32 films a year, 21 wide, for years three through five, under terms reported by Variety. Miss the quota and the penalty is $30 million per film short; miss it long enough and Skydance has to divest its stake in Miramax. Paramount separately committed to $300 million a year in extra US production spending, a five-year ban on selling the Paramount or Warner Bros. studio lots, and a five-member panel overseeing editorial independence at CNN and CBS. A last-ditch challenge made it to the Supreme Court; Justice Elena Kagan declined to block the closing. WBD’s own shareholders had approved the deal in April with about 70.3% of outstanding shares voting yes, while separately voting down, in a non-binding referendum, the exit-pay packages for CEO David Zaslav and other executives, as Variety reported at the time.
How Paramount beat Netflix to it
Netflix was the frontrunner until February. Its offer, $27.75 a share, valued WBD’s studio and streaming assets — not the cable networks or CNN — at $82.7 billion. Paramount Skydance’s counter, $31 a share for everything including CNN, came to $110.9 billion, and WBD’s board deemed it a “Company Superior Proposal” on February 26. Given a waiver to top it, Netflix chose not to, collecting a $2.8 billion termination fee instead. Co-CEOs Ted Sarandos and Greg Peters put it plainly in a statement: “this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
What Skydance hasn’t put a number on is the thing its own announcement promised: a date, a name or a price for the unified app. Bloys’ own answer, when asked directly, was a shrug toward a bundle rather than a merge. Until the tech stacks actually combine, Paramount+ and HBO Max keep separate billing systems, separate DRM and separate subscriber counts — and the $6 billion in promised synergies has to come from somewhere else first.