Skydance's $80B Debt: Can Ellison's Content Empire Survive?

Skydance is under pressure to deliver 30 films annually by 2028, a benchmark set during its major acquisition. The company is navigating the challenge of acquiring or producing these films amidst significant financial obligations.

With $80 billion in net debt, Skydance aims to streamline costs while investing heavily in content. A key initiative is the planned bundling of HBO Max and Paramount+ streaming services by early 2027, priced competitively to gain subscribers.

Skydance possesses a substantial content library, estimated at 15,000 films and over 100,000 hours of TV series, serving more than 205 million global streaming subscribers. This extensive IP is seen as a crucial asset for future growth.

The company's financial stability hinges on the performance of its streaming services and its large portfolio of linear cable channels. However, the declining cable TV market presents a significant risk to steady cash flow and profits.

Layoffs are anticipated by the end of 2026 and extending into early 2027 as Skydance seeks to achieve cost savings, estimated to approach $3 billion from the Paramount Global acquisition alone.

Negotiations for a 'Barbie' sequel are ongoing, with key creatives seeking substantial compensation. This underscores the challenge of managing creative budgets while managing extensive debt.