Meet the new Hollywood giant. It’s nothing like the giants of old.
“With all the respect in the world to everybody that has existed at these companies prior, how we got here to a place where Paramount could be acquired and Warner Bros. could be acquired is the businesses didn’t disrupt themselves over a decade ago,” Skydance co-CEO David Ellison said during a media event to kick off the new company on Tuesday. “They allowed Netflix to disrupt their business. They allowed Amazon Prime Video to come and disrupt their business. They didn’t transform and they held on to the past for too long.”
The comment underscores why the $110 billion merger between Paramount and Warner Bros. Discovery — now under the umbrella of Skydance — inspires a unique mix of dread and excitement. While Ellison has a healthy respect for the legacy of the companies he’s acquired, he won’t be afraid to radically disrupt them.
Ellison, alongside new co-CEO Ynon Kreiz, mostly said all the right things, focusing on an aggressive plan to spend on movies and shows, discussing his love for original movies — Warner Bros.’ “Sinners” was his favorite film of 2025 — and revealing he spent the last several months quietly advocating for the federal film tax credit.
But while Ellison has grand plans for Skydance, questions remain about its ability to operate while burdened with the nearly $80 billion in debt it took on to complete the merger. The high cost of servicing that debt — particularly in an environment where interest rates are rising — means the company is operating with little room for error.
The merger’s Tuesday closing capped off a surreal year-long journey for Ellison, who was fresh off Skydance’s acquisition of Paramount last summer when he kicked off his bid for WBD. What followed was a topsy-turvy M&A saga complete with a fierce bidding war with Netflix, a hostile takeover attempt, bitter resistance from the creative community and lawmakers and a final attempt to kill the merger by a dozen state attorneys general, led by California’s Rob Bonta.
Which brought everyone to the Paramount lot as Ellison and Kreiz fielded questions from the media in an effort to “turn the page” and start fresh with Hollywood.
Here are the big takeaways from Day 1 of Skydance:
A full slate of movies and commitment to original films
The sizzle reel that played at the start of the press conference said more than Ellison did — it was full of franchises from the combined studios, with some Paramount highlights (like “Mission: Impossible” and “Top Gun” and various Taylor Sheridan Paramount+ shows) intermingled with Warner Bros.’ crown jewels (everything from “Friends” to “Harry Potter” to assorted DC properties). Matthew McConaughey provided appropriately dusty narration.
“We’ve always defined ourselves by the ability to overcome the impossible. These moments when we dare to aim higher and to break barriers,” the Oscar winner intoned, his Texas drawl stretching out like warm saltwater taffy.
The cumulative effect was impressive but somewhat numbing. One company owns all of this? At one point, touting the slate that is in the works, it bizarrely slapped logos onto footage of old movies – the bottom of the screen might have trumpeted “Days of Thunder 2” but the scenes playing were from Tony Scott’s 1990 original.
When Ellison was asked about the combined Skydance slate, however, he stressed the mega-studio’s commitment to both furthering established franchises and breaking new ground with original storytelling.
“We are absolutely going to invest in our franchises, in our intellectual property. We are going to make a completely diverse slate. And one of the things I’ve been a big believer in is original storytelling,” Ellison said. “Warners had incredible success with ‘Sinners.’ It was actually my favorite movie last year, and from that standpoint, you absolutely will see us tell original stories, continue our franchises, and produce across all genres.”
Two truly independent studios
One of the big questions among those watching the merger come together had to do with release dates, with a number of weekends this year and beyond occupied by both Warner Bros. and Paramount titles. What would they do now?
“The plan is to keep the studios independent creatively, so that each studio will have its own slate, its own relationship, its own opportunities, and then we will choreograph the release schedule to optimize by genre, by audience demographic to achieve the best for the company as a whole,” Kreiz explained at the press event. “It’s that coordination that will make the difference. The creative output by keeping the studio separate will stay robust and we believe we’ll be able to attract the best creators in the world to make the best content. Then it’s about the release, the marketing and all the things that we know how to do so well.”
You absolutely will see us tell original stories, continue our franchises, and produce across all genres. – David Ellison
Reading between the lines, it sounds like if the movies are complimentary (or distinct enough from one another), those release dates will hold. A lower budget horror movie (Paramount has a few in the works right now, including sequels to “Crawl” and “Longlegs”) could peacefully coexist with a four-quadrant family adventure or a film that skews older. But it probably wouldn’t put a “Dune” installment and the latest “Mission: Impossible” on the same weekend, since it would cannibalize the audience.
Interestingly, animation was not broached during the Q&A, despite Skydance now being in command of three separate animation studios, each run by different creative executives — Paramount Animation, run by former consumer products exec Jennifer Dodge; Skydance Animation, overseen by president Holly Edwards and former Pixar godhead John Lasseter; and Warner Bros. Pictures Animation, a newly formed unit that has DreamWorks Animation vet Bill Damaschke in charge. Nothing official has been announced, but Damaschke was spotted at the internal Skydance town hall, next to James Gunn and Bari Weiss. So we feel confident in marking Warner Bros. Pictures Animation as “safe.”
It’ll be interesting to see if Skydance’s output is as robust and exciting as its executives are touting. Or, to borrow an expression, the slate will be all sizzle, no steak.
The plan for dying cable assets? More TV shows
A couple of solid TV-related plans emerged from the press event. Ellison told reporters that Skydance intends to keep both the Paramount Pictures and Warner Bros. studio lots and that the company will “probably” use one lot for film and the other for TV and streaming.
The co-CEO also noted that the company has plans to merge the two major streaming services from these companies, Paramount+ and HBO Max. But it’ll have to overcome technical hurdles before moving forward with the plan.
“It’ll take a period of time to do that, so I think in the immediate, you will see them operated separately,” Ellison said, noting that there may be an increase in streaming bundling options in the short term. The company also plans on using AI to help combine these two streamers. “We will definitely look to bring the tech stacks together as quickly as possible. We actually just completed that at Paramount.”
But the actionable plans for Skydance’s many cable assets remain unclear. Paramount alone already had several major cable channels, including Comedy Central, MTV and VH1. Now with the acquisition of Warner Bros. Discovery, dozens more cable channels have been added to its portfolio, including CNN, HGTV, Food Network and TLC.
Some of those channels now under the same parent company, like Nickelodeon and Cartoon Network, used to be direct competitors. Even as cable subscriptions and viewership have continued to decline, for years these packages have served as consistent money makers for both Paramount and Warner Bros. Discovery.
Though Skydance will have more than 190 TV shows as part of this merger, neither Kreiz nor Ellison outlined a clear path to revitalize these dying assets that many companies have used as a deflating life raft while streaming still struggles to become consistently profitable.
Then there’s the matter of Skydance’s ownership of three major television studios — CBS Studios, Warner Bros. Television and Paramount Television Studios.
“When it comes to the TV studios, it’s about scale. We’re not looking to reduce output or production,” Kreiz said. “It’s about efficient operation, and we have plans on how to achieve that while still maintaining labels, creative labels, creative parts to ensure that creativity still continues to flow and we attract the best creators.”
Kreiz also said that the top priority is to establish Skydance as “a leading content engine in the world.”
“When you do that, you can then drive growth in your [direct-to-consumer] business. You can continue to optimize your linear channels around the world, which is a large business,” he said. “That symbiotic relationship is the underpinning of the model.”
“Complete editorial independence” for CNN and CBS News
David Ellison pledged that CNN and CBS News will remain “completely editorially independent” under Skydance, adding that the company is “thrilled” with CNN chairman and editor-in-chief Mark Thompson and CBS News editor-in-chief Bari Weiss.
Pressed on whether Paramount had become politicized and about his relationship with President Donald Trump, Ellison said the company wants to maintain relationships with leaders on both sides of the aisle but “does not want to politicize the company.”
Asked about reports of conversations with Trump about CNN, Ellison responded: “For absolute clarity, we have not talked to any political leader of any party about news,” other than to say the company wants to be “in the truth business” and “the trust business.”
He added: “We believe in complete editorial independence.”
But under Paramount, CBS News has seen both its reputation and ratings take a hit under Weiss. Ellison reaffirmed his confidence in Weiss while expressing his excitement for Thompson joining the leadership team as he retains his role over CNN.
Bringing production back to the U.S.
As part of its settlement with the attorneys general, Skydance has pledged to increase its production spending in the United States by $1.5 billion over the next five years. With a federal film tax incentive expected to be passed by Congress in December, Ellison said he plans on to get started on fulfilling that promise quickly.
“Paramount’s domestic production level is about 5%. Jobs are being shipped overseas and almost no filming happens here in California, which is the birthplace of the business. That’s something we want to change,” he said.
The executive said that while visiting the White House over the past year – including for the UFC event there that Paramount streamed – he spoke with President Trump about the need for a federal incentive to halt production flight from the U.S. He credited the late Sen. Lindsay Graham (R-S.C.) with facilitating the meetings.
“We were just in D.C. with senators on both sides of the aisle to try to get this rebate done by Dec. 11. That will bring a tremendous amount of spending back to the United States,” Ellison added. “We’ve also had conversations with both potential incoming governors [Xavier Becerra and Steve Hilton], as well as with Attorney General Bonta, about what could hopefully be done in California to make California more competitive with other states.”
In other words, should the federal tax credit be passed, don’t expect Skydance to immediately prioritize Los Angeles in its production plans. Last year, Paramount signed a 10-year lease with 1888 Studios, a new soundstage facility in New Jersey that will see the studio occupy more than 285,000 square feet of the facility. Unlike California, New Jersey includes above-the-line talent to go towards its state incentive program, something that multiple studio insiders told TheWrap gives the Garden State a major edge.
“Jersey’s at 43%. Georgia, I believe, is 38%. So even if you got the federal rebate, California would not be as competitive with some of the other states,” Ellison said.
While the battle between Bonta and Skydance raged this summer, entertainment lobbyists were in Sacramento scrambling to make changes to California’s production incentive program to accommodate a new statewide cap on business tax incentives, disrupting what union insiders had hoped would be a quiet 2026 ahead of a push next year to further increase the $700 million cap on the program or even remove it entirely with the inclusion of above-the-line spending. Should the federal tax credit pass, a nationwide competition for the dollars of Skydance and every other studio in America is expected to kick off, which may increase the urgency for those hoping to preserve L.A.’s film industry.
Countering massive debt by “investing for growth”
When asked about balancing $30-$40 billion in content spending with Skydance’s roughly $80 billion debt load, Kreiz said Skydance leadership has a multi-year business plan to drive long-term growth and increase cash flow to more than $10 billion by 2030. Ellison also touted the combined company’s nearly $70 billion in revenue.
By 2029, Skydance is targeting a leverage ratio of three times, which will be achieved through combination of content investment and more than $6 billion in merger cost savings in areas like merging streaming tech stacks, procurement and consolidating the company’s real estate footprint.
Those savings will also include an unspecified number of layoffs, though leadership has insisted the majority will come from “non-labor” sources. A Los Angeles County-commissioned study has estimated that nearly 4,500 local film and TV jobs could be impacted over the next three years.
“We’ve measured this incredibly carefully,” Ellison said. “We absolutely have the ability to manage the debt and de-lever while investing for growth.”
In addition to realizing synergies and generating free cash flow, credit rating firm Fitch believes reaching that leverage target could require asset sales or issuing new equity.
On Tuesday, it downgraded Paramount and Warner Bros. Discovery’s credit ratings, citing “materially higher leverage” and “significant execution and integration risks,” as well as uncertainty about Skydance’s ability to reach its stated synergies. It also warned the company faces “structural pressure on linear revenues, streaming competition and hit-driven content risk.”
“Fitch’s base case does not include equity-funded debt reduction or asset sales,” the firm wrote. “Such actions would be incremental to Fitch’s analysis and could support faster deleveraging.”
During the briefing, Ellison and Kreiz did not address whether they would look to sell any of the combined company’s assets.
Ellison acknowledged the skepticism and said that he had friends who opposed this merger. He insisted there was no ill will and that Hollywood would come to accept the company once it sees its investment in productions.
“The best I can say to our detractors is, give us time and we’ll prove it,” Ellison said.
The post Over 30 Movies, a $40 Billion Content Spend and So Much Debt: What We Learned From Skydance’s Kickoff Event appeared first on TheWrap.
