Skydance completes $110B Warner deal, now faces $80B debt and 7x leverage
Skydance completes $110B Warner Bros. Discovery merger, begins NYSE trading as SKYD Skydance closed its $110 billion purchase of Warner Bros. Discovery, creating a media giant with HBO Max, Paramount+, CBS, CNN and major franchises. The combined company starts trading on the NYSE under SKYD, giving investors a much larger, diversified entertainment business with nearly $70 billion in annual revenue.
This is the central event of the period and the main reason SKYD is in the news.
Skydance carries $80B debt with leverage above 7x, Fitch downgrades credit The deal required over $50 billion of borrowing, leaving about $80 billion in debt. S&P sees leverage initially at 7.6 times, and Fitch downgraded Paramount's credit rating, citing higher leverage and integration risks. This heavy debt load weighs on the stock because it raises interest costs and limits financial flexibility.
It is the main counterweight to the merger and a key reason investors are cautious.
Ellison family invests ~$17B, but SKYD shares fall ~7% on completion David Ellison and family put in about $17 billion as part of $47 billion in new equity, with investors paying $12 a share. Despite that backing, SKYD shares fell almost 7% to $8.89 as investors weighed the completed combination and its risks. The drop shows the market is not yet convinced the deal will pay off.
It shows the immediate market reaction and the scale of insider commitment.
Debt restructuring raises coupons; cost savings face settlement limits Skydance exchanged old Warner notes for new ones with much higher interest rates, like 4.125% notes swapped for 6.25% notes. Management targets $6 billion in cost savings, but a legal settlement requires at least 30 theatrical releases a year and $1.5 billion in extra U.S. production spending, which limits how deeply costs can be cut.
It explains the financial mechanics and constraints that will shape future profits.