Bloomberg Television8 min
Skydance to release New Paramount+, HBO Max Bundle
Geetha Ranganathan, Carol, Gita, Tim
Interview
- Potential bundling of Paramount Plus and Max is anticipated to price the combined service at least 30 to 35 percent below the separate subscriptions.
- While $6 billion in synergies are widely considered achievable, there is significant concern that the EBITDA target of growing from $12 billion currently to $20 billion by 2030, alongside generating $10 million in free cash flow, may not be met.
- Financial deleveraging plans require reducing leverage from 6.5 times with over $80 billion in debt to three times by 2030.
- Network portfolio scale cannot be leveraged for five years due to separate deal negotiations mandated by a consent decree.
- Convincing investors that streaming profits can offset linear TV losses remains a critical test, given historical precedents suggesting this is unlikely to occur.
- Media merger history raises investor concerns about potential EBITDA deterioration similar to previous trends.
- Asset divestiture scenarios remain possible, with speculation that Netflix could potentially acquire Warner Brothers Discovery again.
- Leadership intends to focus on integrating the two brands, though recent performance at Warner Studios has been poor, with major films like Supergirl and The Digger costing approximately $300 million each with weak returns.
- A substantial loss in the studio business is expected to be recorded in the fourth quarter.
- Uncertainty persists regarding the viability of a commitment to release 30 theatrical movies given recent box office failures.