Decoder · 3 min instead of 43 min · Oct 10, 2026
Skydance has no growth plan, only cost cuts and $80B of debt
Peter Kafka
Chief Correspondent, Business Insider
Nilay PatelHost · Editor-in-chief, The Verge
Helped start The Verge in 2011 and has hosted Decoder since 2020.
About this segment
Kafka says the only announced plan is shrinking: $6 billion in savings, mostly via layoffs. With $80 billion in debt and no growth story, Zaslav's exit looks like luck.
From “Another billionaire thinks he can fix Warner Bros.”, Oct 10, 2026. Watch the full episode
“There's no announced plan for new revenue. Right now, it's shrink. It's cut costs. It's when we mush these two companies together, we're going to save $6 billion over the next three years.”
Takeaways
- The announced plan is $6B in synergies, not new revenue
- Debt of $80B is far above the $43-50B that sank Zaslav
- Wall Street never believed Warner Bros. Discovery could grow
In this episode
Full episode5:07Skydance has no growth plan, only cost cuts and $80B of debt3:02
Transcript
Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.
- 5:19
Everyone else is dumb and I'm smarter than everyone else is very appealing. But that long list of failures, if you just look at it, they're all shaped like this idea. We're going to take iconic Warner Brothers content. We're going to marry it to new distribution. We're going to reduce the overhead and costs and decadence of Hollywood. Where does new revenue come from? There's no plan for new revenue.
- 5:41
There's no announced plan for new revenue. Right now, it's shrink. It's cut costs. It's when we mush these two companies together, we're going to save $6 billion over the next three years. We promise that most of that's not going to come from layoffs, but a lot of it's going to come from layoffs. These are companies that have been, had had many, many rounds of layoffs prior to this. And you could argue, well, there's probably not that much more to cut.
- 6:06
I think reasonably you could say, look, if you combine two big streaming operations, two big studio operations, there probably is stuff. You can probably sell off some real estate. You probably don't need all the executives you currently have. There's some savings there. But yeah, how you grow, no idea. And no one's really articulated that. Growth is required for a couple of reasons here. One, yes, there are going to be shareholders.
- 6:28
People will be looking at it. There's David Ellison's ego. Then there's debt. This deal is levered to the max, right? There's $80 billion. Yeah. Eight, zero. But more important than the number is the reason that David Ellison was able to buy Warner Brothers is that the last owner couldn't deal with the debt that he took on to buy the company. And that was a mere 43 or 50 billion dollars, depending on who was counting. This is David Zaslav, the former CEO of Warner Brothers Discovery, who spent his entire tenure running that company telling Wall Street that, yes, he was going to get the debt down. And that was his main focus.
- 6:52
And debt, debt, debt, reduce, reduce, reduce. I mean, he did reduce some debt, but he never convinced Wall Street that he had a plan to grow. Wall Street gave up on this company years ago, which is why when David Ellison decided he wanted to buy it, the stock was like seven bucks or something like that. Eventually bought it for many, many times that. And now David Zaslav is considered, well, he considers himself a genius for selling the company at such a high price.
- 7:19
You could also argue, as someone told me yesterday, it's just a unicorn sort of manifested itself and and allowed David Zaslav to exit the situation he put himself into. I don't know who the next unicorn will be for this company if David Ellison at some point decides, ugh, actually, this is a lot of debt and a lot of pain. I don't want to do this anymore. I want to come to that because I have a little bit of a conspiracy theory.