Skydance lays out $6bn savings plan, sets D2C bundle launch for early 2027

David Ellison’s newly formed Skydance has outlined how it intends to achieve at least US$6bn in cost savings over three years, as it brings together Paramount+ and HBO Max, two huge cable portfolios, two studio groups and other overlapping corporate functions.

David Ellison

The combined businesses have an annual expense base of over US$50bn, with Skydance identifying opportunities to eliminate duplicate spending across corporate functions, marketing and technology.

In a shareholder letter accompanying its third-quarter earnings report, the company said it expects to generate at least US$2.2bn in annual savings from costs associated with corporate overhead, real estate and facilities, against a projected 2026 spend of around US$8bn in those areas.

Skydance said its US$6bn in savings would come from a mix of “non-labour and labour” costs. It is unclear exactly how many people across the global business could lose their jobs as a result of the merger, although Skydance has claimed that most of the savings will not come from reducing headcount.

While that may be the case, Hollywood is still bracing for significant job cuts, especially given that around 2,000 positions were eliminated after Skydance acquired Paramount Global in mid 2025. During Monday’s earnings call, Ellison said Skydance would be “drawing on our playbook from Paramount” as it looked to save the US$6bn.

US$1bn is expected to come from marketing, where annual spending is forecast at about US$5bn. Technology is another major target, with Skydance forecasting annual spending of around US$4bn in 2026 but identifying at least US$1.4bn in potential savings through the integration of its technology infrastructure, streaming platforms and broadcast systems.

The remaining US$1.4bn is expected to come from purchasing and supplier costs, where the combined company anticipates annual spending of around US$9bn. Skydance said it intends to consolidate purchasing decisions and use its increased buying power to negotiate more favourable terms with third-party suppliers.

Skydance also pointed to the potential for efficiencies in content, but indicated that the company planned to remain at a “base” of US$30bn annually, which co-CEO Ynon Kreiz described on the earnings call as the highest in the industry.

Ellison also suggested AI could have a significant impact on the cost and speed of content production, although it is not part of the company’s financial planning at this stage.

“While none of this is forecast in our model, we’ve been developing AI tools that strongly indicate content will be easier to produce, projects across the organisation will speed up and how we work will transform,” he said.

Elsewhere, Skydance revealed it would begin selling a bundled streaming package for Paramount+ and HBO Max in early 2027. The bundling is a precursor to merging the two platforms, but it did not give a firm timeline for that.

The company also said it would stop reporting subscriber numbers, beginning next quarter, “in line with other leading D2C players in the industry.”

As it stands, Paramount+ and HBO/HBO Max have a combined 203 million subscribers, said Skydance. In the third quarter, Paramount+ grew to 82.2 million, up from 81.6 million the quarter before, with HBO/HBO Max having around 120.8 million.