Skydance’s top execs are thanking employees after a solid inaugural earnings report.
CEO David Ellison and co-CEO Ynon Kreiz sent an email to staffers after the Paramount side of Skydance reached its revenue goal and topped its profit projections in the third quarter — the first since the Paramount-Warner Bros. Discovery mega-deal last month.
“The progress we’ve made is a direct result of your contributions,” Ellison and Kreiz said in a post-earnings memo, which was obtained by Business Insider.
In the memo, Ellison and Kreiz reiterated their three goals:
Establishing Skydance as the premier global content engine and the home of the world’s leading storytellersAccelerating our integrated direct-to-consumer platformOptimizing our highly profitable linear TV portfolio, anchored by CBS.
The Skydance CEOs expressed confidence that their new-look company has the size and library to compete with tech-savvy giants like Netflix and Google’s YouTube.
Skydance controls a slew of enviable, iconic assets, including the Warner Bros. studio, Paramount Pictures, HBO, CBS, CNN, Paramount+, HBO Max, Pluto TV, TNT, HGTV, and Comedy Central.
“We will lead in a crowded market by using our scale, assets and global reach to drive transformation and growth,” Ellison and Kreiz wrote.
However, investors aren’t sold on Skydance’s business so far.
Despite posting a solid report, shares slid 2% in after-hours trading after initially jumping over 4%. The stock has whipsawed in recent weeks, soaring over 8.5% on Monday after falling more than 11% from pre-merger levels.
Skydance’s success hinges on its ability to pay down its debt load of roughly $79 billion, a concern for some investors and analysts.
“The newly merged Skydance comes with massive debt that remains at the center of concern over the company’s ability to profitably grow,” Forrester media analyst Mike Proulx said in commentary ahead of Skydance’s earnings report.
Ellison’s company has said it plans to save $6 billion by buying WBD, and that the majority of those cost savings won’t come from layoffs. Still, employees are antsy about cuts and bracing for stiff internal competition as Paramount and WBD’s teams come together.
In late October, Skydance told employees to return to the office five days a week, or take a buyout offer, Business Insider has reported.
Read Ellison and Kreiz’s full memo below:
Team,It’s been a very busy five weeks since we closed the transaction and launched our newly combined company, Skydance. In many ways it feels like we just got started, and in others, it’s hard to believe how much we’ve accomplished together in such a short time.This afternoon, we reported our third quarter results for legacy Paramount and shared an overview of the business, including our strategy and plans for the combined company. We wanted to follow up with all of you because the progress we’ve made is a direct result of your contributions. We’ve moved quickly to put our leadership teams in place across our three segments (Skydance Studios, Direct-to-Consumer and TV), established our organizational structure and are well on our way with integration. These are still early days, but the more we dig into the business, the more excited we are about the opportunity ahead.As we shared on day one, our strategy is built around three goals: establishing Skydance as the premier global content engine and the home of the world’s leading storytellers, accelerating our integrated direct-to-consumer platform and optimizing our highly profitable linear TV portfolio, anchored by CBS.To get there, we will win in storytelling by leveraging our creative capabilities, talent relationships, production prowess and expansive library of iconic IP. We will build the most technologically capable media company, with a unified technology platform spanning streaming, live and linear that improves the user experience and drives efficiencies. We will lead in a crowded market by using our scale, assets and global reach to drive transformation and growth. And we will earn trust every day by communicating directly and transparently, backing up our words with action and following through on our commitments to the people we serve and work alongside. Underpinning all of it is our pledge to achieve at least $6 billion in annual savings and efficiencies as we bring the two companies together, and we’re already seeing real results.We know there is still a lot of work ahead to position this company for long-term success. And the reason we’re so optimistic about getting there is you. Everything we’ve done so far, and everything we hope to build, starts with our people. Whether you’re telling stories, building products, reporting the news, serving our partners, supporting our productions or helping keep this great company running every day, you’ve embraced the pace and the change of the past several weeks with extraordinary determination and enthusiasm. We’re incredibly grateful.We encourage you to review our shareholder letter for more details on the quarter. A replay of today’s earnings call will be available shortly on our investor Relations site.Thank you for your effort, your commitment and your belief in what we’re building.Keep up the great work!David and Ynon
