The Information Briefing newsletter

Oct 4, 2026 The Briefing By Martin Peers Supported by Thanks for reading The Briefing, our nightly column where we break down the day’s news. If you like what you see, I encourage you to subscribe to our reporting here. Greetings! This is a big week for Larry [First name]. His family’s yearlong pursuit of Warner Bros. Discovery, owner of one of Hollywood’s most iconic film studios, comes to a conclusion on Tuesday when the [First name]-controlled Paramount Skydance is scheduled to complete the $110 billion purchase of WBD. It’s been barely a year since the Ellisons got control of Paramount itself. Once the latest deal is done, [First name] and his son David—who is running the show—will be among the most powerful people in film, television and streaming. Yes, techies really have taken over entertainment. The question now is whether the Ellisons can make money on this bet. That won’t be easy. The combined company—to be called Skydance, David [First name] announced on Friday—will carry debt amounting to $79 billion. That’s a hefty amount given that the company starts life with annual earnings before interest, taxes, depreciation and amortization of $12 billion. David [First name]’s pitch has been that he’ll find “synergies” (cost cuts in plain English) of $6 billion, bumping up projected Ebitda to $18 billion. Assuming he can find the cost savings he is promising, the debt should be a little more manageable. Then again, it doesn't help that interest rates have risen. Most of the debt—more than $50 billion in bonds and term loans—was raised last week at interest rates of between 6.3% and 9.125%. Ouch. Even debt investors seem dubious about Skydance’s prospects. Bloomberg reported that once the bonds began trading, they quickly fell in value, leaving investors with “more than $100 million in losses.” Meanwhile, Paramount’s stock has fallen 29% since it announced the acquisition at the end of February. Investor skepticism is reasonable. David [First name] will be looking to cut costs at companies that have already undergone plenty of the same. WBD, after all, was created from the 2022 merger of Warner Media and Discovery, and that company spent the past few years slashing costs to deal with its debt. Moreover, in the year since [First name]’s Skydance bought Paramount, he engaged in plenty of cost-cutting efforts there. An even bigger issue is that a significant portion of the combined company’s revenue and profits will come from cable channels, which are steadily declining as streaming replaces the cable TV system. Both Paramount and WBD are big owners of cable channels, and both have seen declines in that segment already. In securities filings preparing for the merger, WBD projected that revenue from its cable channels would drop 8% over the next four years, while profits would fall 30%. To be sure, WBD projects that growth in its streaming business will more than offset the declines in cable. But how reliable are those streaming projections? The streaming market has matured. Streaming services are increasingly reliant on price increases for revenue growth. That will make consumers pickier about which services they pay for. Still, Skydance is now one of a handful of major players. It will start life with more than 200 million streaming subscribers between its various services (which will be combined into one eventually). That number compares with Netflix’s 325 million (as of January) and is competitive with Disney. The Ellisons are taking on this costly new commitment even as Larry [First name]’s primary source of wealth—Oracle—is facing its own challenges. The software-and-cloud firm has borrowed heavily to become a major player in AI data centers, which has sent its stock on a roller-coaster ride. So far this year, Oracle shares are down 27%. [First name] has pledged more than a third of his 38% stake in Oracle as security for loans, ensuring that he is sensitive to the stock price. The Larry and David show should b