Skydance Targets Annual Savings of at Least $6 Billion After Completing Acquisition
Key Facts
Skydance is targeting annual run-rate savings of at least $6 billion within 3 years, according to its statement announcing the completion of the Warner Bros. Discovery acquisition, which places the savings in an operational phase following the deal's completion. The company announced that it completed the acquisition on October 6, 2026, with the combined entity taking the name Skydance, bringing Paramount and Warner Bros. Discovery assets under the new name. As for combining streaming products, the company said in the statement that this would happen "in a single service over time," as a subsequent step in its plan. Before the acquisition was completed, Paramount had attributed the costs of delaying the closing to ticking fees and additional financing costs associated with the extended waiting period. The delay therefore carried, according to its statement at the time, costs arising from fees accruing over time, alongside additional financing costs borne by the company.
The acquisition was completed after the court approved the states' settlement on September 30, 2026, according to Paramount Skydance's filing with the U.S. Securities and Exchange Commission regarding the agreement. Approval of the settlement ended the states' lawsuit and modified the order blocking the closing to allow the company to proceed with completing the acquisition, which the injunction had previously prevented. In separate litigation, the federal court for the Northern District of California denied Faust and the other plaintiffs' request for a temporary restraining order on the same date. The court said in its ruling: "The Court therefore denies Plaintiffs' motion for a temporary restraining order," in a decision dated September 30, 2026. Justice Elena Kagan then denied an application for an injunction in Faust v. Paramount Skydance on October 5, 2026, according to the U.S. Supreme Court docket.
At the federal level, the U.S. Justice Department concluded, upon closing its merger investigation, that the deal was unlikely to harm competition or American consumers. The department said in its statement closing the investigation that "the proposed transaction is unlikely to harm competition or American consumers," setting out its assessment of the impact of combining the companies. In the states' earlier challenge to the acquisition, New York's attorney general had warned that reduced competition could give Paramount the ability to impose terms on movie theaters. Her warning also covered television distributors, which she said the company could dictate terms to amid reduced competition. The attorney general linked this objection to the prospect of higher movie ticket and cable package prices, the impact the states feared would be passed on to consumers.
The court-approved settlement imposes obligations on how the combined entity negotiates distribution of its channels, according to the SEC filing. The company must negotiate separately the terms of distribution agreements for Paramount's basic cable channel portfolio and Warner Bros. Discovery's channel portfolio. The obligation requires separate negotiations over the terms of agreements for the 2 portfolios, even after the companies' assets have been brought together under the Skydance name and the acquisition completed. The settlement also requires the company to retain Pluto TV, or provide an equivalent replacement service, as part of its streaming commitments. The filing stipulates that the service must remain "free and ad-supported," whether Pluto TV itself continues or is replaced by the stipulated equivalent service.
In the market, SKYD shares closed at $6.91 on October 16, 2026, according to EL7 data, following higher closes in preceding days that month. The stock had closed at $9.27 on October 13, before recording a close of $7.06 on October 14, according to the same data. The first closing date coincided with the start of trading in stock warrants distributed by the company, according to Skydance's statement on the separate trading of shares and warrants. The company said those warrants totaled about 471 million, detailing the securities that began trading after the acquisition. Skydance identified the New York Stock Exchange as the market for the warrants and said trading began on October 13, 2026.
Following the deal's closing, upcoming obligations include establishing a news independence board, according to the settlement disclosed by Paramount Skydance in its SEC filing. The combined entity must establish the board within 180 days of the acquisition's closing, the deadline set by the settlement for fulfilling this commitment. The period begins with the deal's completion on October 6, 2026, as part of the obligations that move into implementation after closing. The news independence board must consist of 5 members, according to the wording in the disclosure of the court settlement that allowed the acquisition to be completed. The settlement also requires board members to be established journalists, specifying the qualifications of those to be selected when the board is established within the prescribed period.