Skydance Shares Slide as AI Bet Meets $87B Debt Burden
WHO:
Cartoon Brew - Skydance, led by CEO David Ellison, told shareholders that growing its business and paying down debt are its top priorities.
Cartoon Brew - Ellison said, “artificial intelligence is a tool for artists and will never be a replacement for them.”
Cartoon Brew - Skydance confirmed layoffs in its games division; at least 25 workers reportedly lost their jobs.
Cartoon Brew - James Gunn and Peter Safran were removed as DC Studios chiefs; Variety reported that disappointing returns on expensive projects contributed to their ouster.
TheWrap - Bank of America analyst Jessica Reif Ehrlich and Bernstein analyst Laurent Yoon rated Skydance shares underperform, with price targets of $9 and $6, respectively. TD Cowen analyst Doug Creutz rated the stock hold with an $8 target.
TheWrap - MoffettNathanson analyst Robert Fishman maintained a neutral rating and a $7 price target. Guggenheim analyst Michael Morris maintained a neutral rating without a price target.
WHAT:
TheWrap - Skydance shares were down 28.4% over six months and 40% year to date.
TheWrap - Skydance said it would review its portfolio and be “opportunistic” about monetizing non-core assets; executives said asset sales or additional equity were not required to meet leverage targets.
Cartoon Brew - Following its $111 billion acquisition of Warner Bros. Discovery, Skydance has $87 billion in debt and plans to achieve at least $6 billion in annual savings within three years.
Cartoon Brew - Planned annual savings: $2.2 billion from corporate operations, $1.4 billion from technology, $1 billion from marketing, and $1.4 billion from outside contractors and suppliers. The company has not specified how much will come from AI or labor savings.
Cartoon Brew - Skydance is using or plans to use AI for administrative work, coding, and film production. Ellison said AI could transform filmmaking more than CGI and digital compositing did in the 1990s.
TheWrap - Skydance shares fell more than 8% during Tuesday trading after its third-quarter earnings came in below expectations. Warner Bros. Discovery’s full financials were not included.
TheWrap - Skydance has nearly $80 billion in net debt and roughly $87 billion in gross debt. Executives said they do not need asset sales or additional equity to meet leverage targets, but may opportunistically monetize non-core assets.
TheWrap - Skydance expects $1.5 billion to $2 billion in costs in 2027 and $4 billion over its transformation. It targets leverage of 3x by 2029 and $10 billion in annual free cash flow by 2030.
WHEN:
TheWrap - Skydance plans to launch a Paramount+-HBO Max bundle in early 2027 and combine the services’ backends within the first year after closing.
TheWrap - The company expects free cash flow in 2027 to be at or above breakeven.
WHY:
TheWrap - Guggenheim analyst Michael Morris said Skydance needs to demonstrate that its content slate can support demand for core franchises, show the financial impact of combining HBO Max and Paramount+, and explain how it will manage its declining but cash-generative linear business.
TheWrap - MoffettNathanson analyst Robert Fishman said savings could fail to translate into higher EBITDA and cash flow, potentially forcing Skydance to limit future content-spending growth.
TheWrap - Skydance’s cost reductions are intended to generate merger savings and reduce debt; analysts cited integration, leverage, and execution risks.
HOW:
Cartoon Brew - The company plans to cut costs by combining departments and systems, eliminating overlapping jobs, reducing office space and promotional spending, using AI tools, and consolidating vendors.
TheWrap - Analysts said combining streaming platforms and technology could reduce direct-to-consumer operating expenses, while warning that pricing, subscriber overlap, and content performance could affect results.
(UPDATED November 11, 2026 18:03 UTC)
Skydance shares have tumbled as it tackles heavy debt from its Warner Bros. Discovery acquisition. The company plans major savings through cost cuts, streamlined systems, and artificial intelligence. Executives prioritize growth and debt reduction, while analysts warn that execution risks remain.
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(UPDATED November 11, 2026 13:06 UTC)
Skydance plans billions in savings after acquiring Warner Bros. Discovery, carrying $87 billion in debt. CEO David Ellison says AI will assist artists as the company cuts costs. Shares fell after disappointing earnings, with analysts warning about debt and integration risks.