Paramount Skydance’s leadership says there are no plans to divest or spinoff cable assets after merging with Warner Bros. Discovery for $110 billion.
The deal will see the two companies control a vast portfolio of cable and free-to-air networks, including CBS, CNN, HBO, TNT, Food Network, HGTV, MTV, Comedy Central, Discovery Channel and much more.
“We believe in the assets that we’re buying and there’s no plans to divest or spin off a package of cable assets at this time,” Paramount chief strategy officer Andy Gordon told analysts on Monday. “We actually think, given the brands that Warner Brothers is bringing to Paramount, they have a lot of opportunities to think about all the different aspects of what they can do both on the linear side and the digital side.”
CEO David Ellison said that the combination would keep the two companies’ linear network portfolios healthier for “significantly longer than they would be on a standalone business.” He added that HBO would continue to have “the resources and independence to do what it does best” and praised the network’s CEO Casey Bloys and the rest of his team for doing an “absolutely remarkable job.”
“HBO is a crown jewel in this business having brought to life some of the most powerful stories told over generations,” Ellison said. “Our viewpoint is HBO should stay HBO. They built a phenomenal brand. They’re a leader in the space, and we just want them to continue doing more of it. But by bringing the platforms together, all of our content will be able to reach even a broader audience than we can do standalone.”
As for the streaming side of the business, Ellison and Co. confirmed that HBO Max and Paramount+ would be combined into one streaming platform boasting over 200 million subscribers.
The company is already on track to merge the backend infrastructure of Paramount+, Pluto TV and BET+ by the middle of 2026 and said they’d take a similar approach integrating the Warner Bros. streaming assets.
“We think the combined offering, and given the amount of content and what we can do from the tech side, really will put us in a position to be able to compete with the most scaled players in DTC,” Ellison said.
Meanwhile, Ellison has said that the combined company would commit to a minimum of 30 theatrical releases per year, with 15 from each studio.
Every film will receive a full theatrical release, with a minimum 45-day window globally before becoming available on paid video-on-demand (VOD), with the intention of 60-90 days or more for its most successful releases before being available on streaming. Paramount will continue to adhere to specific windowing regimes in geographies it operates in, including in France where Paramount maintains its windowing commitments.
Both studios will also continue to licensing their films and shows across their own and third-party platforms, while remaining active buyers of content from third-party studios and independent producers.
“We said from day one, when we acquired Paramount, that we weren’t going to be in the business of making movies directly for streaming. We really believe that movies should be seen in theaters, and we still believe that’s what that’s one of the most significant places that you can really create long term resonant intellectual property,” Ellison said. “Television is a completely different business in that regard. You can obviously pierce the zeitgeist and put huge hits up on the direct to consumer platform.”
The Paramount-WBD merger is expected to close by Sept. 30. If it takes longer than that, shareholders will get a 25 cent per share “ticking fee” — or approximately $650 million — each quarter until closing. If it doesn’t close at all due to regulatory matters, Paramount will pay WBD a $7 billion termination fee.
Ellison noted there are “no statutory impediments” to close the deal in the U.S. after the Hart-Scott-Rodino waiting period in the Department of Justice’s review expired on Feb. 19. Despite the expiration, the DOJ can still investigate or challenge a Paramount-WBD deal now that a formal deal has been reached.
He added that the company has started pre-notification discussions with the European Commission and has received clearances from Germany and Slovenia to proceed. An EC spokesperson told TheWrap on Friday that it had not been “formally notified” about the deal.
“We’ve been engaging with regulators around the world, and the combination does not come close to hitting any of the metrics that would be problematic,” Ellison said. “From that standpoint, we will work incredibly collaboratively with regulators to ensure that we get a quick path to closing and are confident in our ability to achieve that goal.”
Paramount-WBD expects to generate over $6 billion in cost savings, which executives said would primarily come from non-labor sources such as merging streaming tech stacks, IT systems and cloud providers, downsizing its real estate footprint and driving efficiencies in marketing and spending on agencies and tooling. Executives said that there would not be a pullback on production as a result of these cuts.
Executives added that they will close the merger with with $79 billion of net debt and have a “clear path” to reduce their leverage ratio from 4.3 times to three times EBITDA within three years of closing. Paramount expects that the combined company will have $69 billion in revenue and $18 billion in EBITDA for 2026, inclusive of its more than $6 billion in synergies.
By 2030, Paramount expects that the majority of its revenue and profits will be driven by the studio and streaming business with mid 20% margins and mid-single digit revenue growth. It also anticipates $10 billion in free cash flow, with approximately 50% free cash flow conversion by 2030.
“This is not about consolidation, it’s about reinventing the business,” Ellison said. “We want to expand our reach and enhance our ability to create the world’s most compelling stories and experiences. We’re incredibly excited about this transaction and it will accelerate that ambition.”
