r/technology • u/OverPotato2322 • 7h ago
Business Skydance’s Market Value Is Currently Less Than Half What Warner Bros. Discovery and Paramount Combined Were Worth
https://variety.com/2026/film/news/skydance-market-cap-less-than-half-warner-bros-discovery-paramount-1236913334/120
u/AbeFromanEast 7h ago edited 7h ago
TLDR: The banks and lawyers made their deal fees and billable hours.
Medium Term: This media merger will go down like AOL Time-Warner back in 2000 and AT&T's purchase of Warner back in 2015: a colossal loss for whoever initially invested in it.
This combined company can barely make the interest payments on the $80 billion of deal debt in a good economy.
25
u/citizen42069101 7h ago
Especially when they're raising streaming fees and supporting a failing party with a monopoly on the media
1
u/Bhu124 12m ago
Oracle's stock is also crashing, like every other major AI Tech Stock. It's near its 52 week low and will likely cross it in 2-3 sessions. In 1-2 weeks the Stock will go back to its 2023 ranges, which was 1/4th-1/5th of its current 52 week high prices.
They've taken a tremendous amount of Debt and no one is going to lend them any more.
We found be seeing complete collapse of both Oracle and Paramount, unless ofc Trump steps in and saves Elisons' companies with US Tax Dollars.
24
u/mvallas1073 6h ago
Have you factored in the possibility they want Trump to get the US Government to bail them out of bankruptcy?
The Ellisons are openly pushing for Trump Propaganda on their programming, and Trump was the reason they got the deal as opposed to Netflix… it’s not that far out.
4
9
u/theaviationhistorian 5h ago
AOL Time-Warner. Man, that takes me back. A ton of people expected it to be some merger of the future with the meeting of old and new tech. So many promises of grandeur were made. Only for it to splatter into a wall like a wet paper towel.
7
u/Additional-Staff-326 4h ago
It made some sense at the time but there was ZERO effort to actually combine the companies.
2
u/theaviationhistorian 3h ago
I think that was the gist of things back in the 2000s. Have both running their own thing but have a common funding pool of some sorts. The same happened with Air France and KLM merging. And the Dutch have regretted it in the 2010s by the continual mismanagement by their French counterparts. I haven't checked how they're doing post-Covid.
3
u/a-cloud-castle 2h ago
If you look at the history of companies that have bought out Warner Bros in the past, it's a graveyard of companies that either no longer exist or are irrelevant.
12
u/TapedeckNinja 6h ago
This media merger will go down like AOL Time-Warner back in 2000 and AT&T's purchase of Warner back in 2015: a colossal loss for whoever initially invested in it.
I don't really see it.
Skydance has the massive private financial backstop of the Ellisons and RedBird. Sure, they've got a lot of debt and they have to pay a lot of debt service, but they don't have the same risk that WBD had because they've got a massive amount of private capital backing them up. They're not going to default. They can refinance at better rates. They're not facing a credit cliff that is going to bankrupt them.
And it isn't really the same as either the AOL or AT&T mergers. Those were different plays; for instance, AT&T wanted to use the media arm to drive subscriptions into their core business. Skydance is nothing like that, this is pure consolidation in a single market. They're going to trim out massive costs in "synergies" both via headcount and their streaming platforms and studio infrastructure.
32
u/TorchedBlack 6h ago
You say that like Oracle isn't also on the brink of bursting into flames any day now.
7
-3
u/TechnicalInternet1 5h ago
Oracle is gonna get a 1 trillion dollar government contract soon
8
u/rintzscar 5h ago
The entire US defense budget is 800 bln annually. If you really think one company is getting 1 trillion, you need professional help.
-6
-8
u/TechnicalInternet1 5h ago
EUHEUHEUHEHUE
EUHUHUEHE
1 trillion over 10 year deal is super realistic.
EUHUHUEHEEUHUHUEHE
use the brain!
5
u/rintzscar 5h ago
No, it isn't. What I said stands. Go get help.
-4
u/TechnicalInternet1 5h ago
EUHUHUEHE
can't detect hyperbole
EUHUHUEHE
can't understand contract deals
EUHUHUEHE
6
8
u/Street_Anxiety2907 6h ago edited 6h ago
You got it.
Skydance is an investment, and the returns will not be direct cash. It's going to be media and cultural influence nationwide.
At CPAC Ellison junior was talking about how they want to get into media and entertainment so they can sway public perception the way Murdoch has done with FOX to keep people conservative leaning.
It's common in oligarchies for them buy news/media outlets so they can influence elections, and it's thousands of times more effective then a single lobbyist in terms of dollars spent.
It's not the first, Washington Post / Jeff Bezos for example. Though that's small fries compared to this.
-1
u/TapedeckNinja 5h ago
At CPAC Ellison junior was talking about how they want to get into media
David Ellison has been running Skydance for over 20 years. They already own Paramount.
They've been in media for decades.
378
u/invyros 7h ago
As it currently stands, the company’s interest payments alone will be north of $6 billion per year.
$6 billion in annual interest payments alone is fucking insane.
Anyway, this whole deal is more about gaining influence over Americans via a media takeover, rather than making money directly from it.
42
u/KidGold 7h ago
Which if the math doesn't make sense to shareholders I don't see how this is legal.
22
u/makemeking706 6h ago
By what means do you think the law is enforced?
12
u/Ironlion45 5h ago
One heinous crime that is still punished is stealing money from rich people. You definitely still go to prison for that, even in the US.
2
7
u/anormalgeek 5h ago
All of these plays only make sense (legally and financially) if we assume that the US slips into a full blown dictatorship.
2
98
u/Makachai 7h ago
It's nice that they keep consolidating everything we need to ignore, ridicule and boycott.
It'll save us time.
2
2
u/Jackalope_trainer 4h ago
Gonna be some dark ass money bailing that out. As was the plan all along.
The Twitter model of world domination
1
-1
-20
u/za72 7h ago edited 6h ago
This was the best economic decision of the decade
EDIT: ahhh the critical thinkers of this sub always come through - obligatory missing /s
8
u/MantisEsq 6h ago
It's 2026, man. Poe's law is in full force, because there are (probably) people out there that actually believe what you wrote.
90
u/alabasterskim 7h ago
I dream of a world where Skydance collapses and David Ellison is permanently ruined.
33
u/jstuu 6h ago
nah i want his dad ruined more than him
31
1
u/wembenbama 3h ago
Even though Larry did end up becoming a ghoul, he did also change the world along with Gates, Jobs/Woz, etc… His kid just managed to be the fastest sperm and fail up from there.
5
u/Minute-Spinach-5563 3h ago
Changed the world with what? Engineering the surveillance state with government contracts?
2
6
u/Funktapus 5h ago
All is takes is everyone canceling their Skydance owned streaming subscriptions. Takes like 2 minutes
-17
-6
u/redmongrel 6h ago
They would delist every movie you’ve ever seen from streaming in the process.
2
u/brogflender 6h ago
A forcing mechanism that would usher in a return to physical goods while simultaneously creating a huge urgent need to give a shit about our rich media cultural history?
oh no
22
u/No_Practice_9597 6h ago
Netflix buying all for half price will be a big plot twist
1
1
u/Renaissance_Ham 4h ago
Netflix's market value has collapsed by almost half over the past year. It's not doing well, either.
5
36
7
u/mvallas1073 6h ago
Spoiler alert: The Ellisons are waiting for a US Government bailout to protect them from going bankrupt. This ways always the plain….
13
u/WPGSquirrel 7h ago
Doesn't matter. This was purchased to control culture and news, not turn a profit.
7
u/ddiggler2469 5h ago
the ellisons don't care about the money - only the power and influence they gain by owning all these media companies
6
u/SpaceyCoffee 3h ago
Doesn’t matter. Ellison captured yet another major platform to add it to the right wing propaganda network.
Profit was never the point. Political control was.
19
u/SMWW66 6h ago
I know this isn’t the point, but David Zaslav cashing out his stock for over $600m pre-tax while being one of the most incompetent CEOs in Hollywood history is just galling. Fuck him
4
u/TeutonJon78 5h ago
He's not incompetent at all. He was brought in to Discovery and kept through WBD specifically because he'd a financial wizard guy who knows how to get debt down. And he's great at that.
For consumers, they want a company that puts out and good and interesting movies and TV shows. He's terrible at that. But that's not what he was hired for.
The real issue is big companies are just financial shell games that happen to extract money from people rather than customer focused companies.
2
u/SMWW66 27m ago
He went away from HBO, one of the most recognizable brands in media, to call his new streaming app Max. Any sophomore at an undergrad business school could tell you that fucking with your brand equity is a terrible decision in a competitive business landscape.
It would be like buying a social media company with global recognition - to the point where sending a message on it was called its own unique verb - and changing the name to a single letter because you’re a narcissistic, Nazi nincompoop. What type of drug-addled idiot would do that??
2
u/OverPotato2322 6h ago edited 6h ago
And soon, Ellison will also get the golden parachute (but at least Zaslav managed to balance the books, is Ellison a fiscal Person? Probably not. Bros a failed actor and producer who had to rely on cofinancing films for other studios rather than creatively helping develop them, I bet he doesn't even know what fiscal responsibility is)
1
19
u/farkwadian 7h ago
That's the plan.
They finance it to the hilt for the deal based on exaggerated values.
Then they take the unrealized losses really only paying a financing fee which very well could be a self contained loop where they finance themselves through a proxy but idk how they're actually set up. Then you get year by year depreciation on your franchise rights which are only dipping because they aren't being currently marketed in order to maximize tax benefits on a year over year basis while the financing is continuing all while still holding on to the franchise licenses which is a commodity that has very low maintenance cost (just the legal and book-keeping ends and very little warehouse space needed) and explodes in value by 10x whatever marketing budget in a decade when they reboot the franchise to keep the trademarks active.
Hollywood accounting is like the final boss of book cooking.
22
u/foldingcouch 7h ago
I don't know enough about tax law to know if this guy is a genius or if this is the tax analysis equivalent of the guy under the bridge near my work that's always shouting at the moon about his stolen sperm.
3
5
1
u/Funktapus 5h ago
Definitely some hand waving in there. For starters, non physical things like media rights don’t have depreciation, they have amortization. And the amortization doesn’t depend on revenue or profitability they just spread the cost out over some number of years.
3
5
4
u/frisbeethecat 1h ago
Let the Ellisons crash and burn through their fortune until they are like vampires withered by the sun.
1
5
u/srhdt 1h ago
Both companies were losing money before the merger. This new company is losing money that much faster. The combined domestic box office of Paramount and WB in 2026 is under $1b. To put that in perspective, Sony, Universal, and Disney are each well above $1b.
2
u/Teh_Heavybody 59m ago
Had Sony not had Brand New Day I firmly believe they too would be under 1b a year.
1
u/what_cube 3m ago
Im really dumb with companies and business and stuff. Why do they even buy it in the first place
3
3
u/PretendingImNotAnApe 6h ago
Cancel peacock, Hulu, and HBO just about covers the gas price increase. I still have Netflix and Amazon plus a couple free bees.
1
3
u/pd1zzle 6h ago
did anyone actually read the article? this seems to say that there was an automated selloff triggered by the revaluation (issueing warrants to current shareholders).
I don't really understand what this means, but it seems more like the current state of things is the result of algorithmic trading more than any actual sentiment about the company. Anyone understand better than me?
2
u/Overly_Underwhelmed 6h ago
ya, most of it was robots, but it hasn't recovered so maybe people are in agreement. have to see what happens over the next week to know. but it still looks to be more debt than capital.
3
3
u/ComfortableSearch704 4h ago
Already dropped paramount +. We’re getting rid of HBO (not renewing) at the end of the year. Hope others follow suit. Let’s drop the value of the merger.
3
4
u/4dxn 5h ago edited 5h ago
I think people are confusing an acquisition with a merger. Skydance paid off WBD's shareholders in cash with debt.
If Skydance's market cap was more than WBD and Paramount prior to the deal, former WBD shareholders would be pissed.
This Todd Spangler "journalist" probably should've talked to someone with financial knowledge.
Now if the value of the combined assets is less than before the deal, the intent of the article would be correct. But you have to ignore liabilities to make that determination.
2
u/DONOTSAYTHENWORD 1h ago
The value of the combined assets is absolutely less than before.
1
u/Iustis 33m ago
Yeah, the bet value because they took on a bunch of debt to pay off the old shareholders. But that doesn't really say anything
1
u/DONOTSAYTHENWORD 28m ago
Skydance stock was trading at $60 ten years ago. It was at $17.29 a share one year ago. Today it trades at $6.91, and falling.
Does that "really say anything?"
2
u/Pooch1431 6h ago
We must capitalism them to death by shorting them and their financiers until they go belly up.
1
2
2
u/SorrelJuice 43m ago
Can we stop merging things, I don’t want a yumfoods Netflix paramount skydance Rolex corporation can we just stop
1
1
u/Overly_Underwhelmed 6h ago
read the article, the deal is an ugly mess. I expect some banks will be sued over their participation.
we should all do aarrr part to bring them down to the briny deep.
1
u/mheadroom 6h ago
It’s almost certainly worth less than what CBS and Viacom were worth. The idea that it’s now a fraction of what all three standalone companies were is breathtaking.
1
u/fezfrascati 6h ago
Glad my WBD stock didn't automatically merge into SKYD. Of course, I bought WBD when it was low too, so anything could happen.
1
1
1
u/EVEiscerator 2h ago
We're the skydance brothers" "And the skydance sisters" just doesn't have the same flow.
1
624
u/mrwrrrmwrmrmrmrw 7h ago
Maybe announcing they plan to use a ton of generative AI in their content going forward wasn't a smart move. Maybe it's just that stupid name Skydance.