Skydance CEO David Ellison announced the company's strategy following the $110 billion acquisition of Warner Bros. Discovery. The newly formed entity, operating under the Skydance name, faces a total debt load of approximately $79 billion. Management aims to reduce the leverage ratio to three times earnings, while current estimates from CNBC host David Faber place the debt at nearly seven times earnings.
The company plans to achieve $6 billion in operational synergies within three years, covering areas such as technology, marketing, property, and labor. Co-CEO Ynon Kreiz stated that the firm targets $10 billion in free cash flow by 2030 and anticipates pro forma EBITDA of $12 billion for the upcoming year. Ellison previously noted a leverage ratio of 4.3 times in an SEC filing based on $18 billion in EBITDA.
Management projects annual revenue growth in the mid-single digits over the next three years. The company currently reports over 200 million streaming subscribers and a 12% share of total television watch time. Despite these figures, the firm faces challenges including annual interest costs estimated at $6 billion, an $800 million dividend obligation, and the ongoing decline of the cable television sector.
