Paramount Boosts Post-Merger Savings Target to $3 Billion

- Paramount Skydance Corp., reporting financial results for the first time since a new investor group took over the media company in August, raised its target for job cuts and cost-saving measures.

The company, which has been trying to buy rival Warner Bros. Discovery Inc., said in a letter to shareholders it plans an additional 1,600-person workforce reduction and a goal to achieve at least $3 billion in cost savings.

The shares rose as much as 5% in premarket trading on Tuesday.Bloomberg News Senior Editor and Entertainment Team Leader Chris Palmeri joins Bloomberg Businessweek Daily to discuss. He speaks with Carol Massar and Tim Stenovec.

Film producer David Ellison combined his Skydance Media with Paramount in August in an $8 billion merger and became the new company’s chief executive officer. Under Ellison, the company is eliminating jobs and racing to sign deals with production partners, like the Ultimate Fighting Championship.

For the third quarter, Paramount reported revenue of $6.7 billion, below analysts’ forecasts of $6.87 billion. Adjusted operating income before interest, taxes, depreciation and amortization totaled $952 million.

The parent of CBS and the Paramount film and TV studios forecasts $30 billion in revenue next year, slightly more than analysts’ estimates of $29.8 billion. The Paramount+ streaming service added 1.4 million subscribers for a total of 79.1 million, and plans to raise prices in the US early next year.

“We are committed to scaling our subscriber base and are pursuing a more balanced, year-round programming strategy to drive higher engagement,” Ellison said of the company’s streaming efforts during its earnings call Monday.

In the company’s most recent job cuts, about a fourth of Paramount’s senior vice presidents and above were affected. The company’s employees at the VP level and below in New York and Los Angeles were offered a voluntary severance package if they didn’t want to return to the office five days a week, a new requirement that takes effect in January. About 600 employees chose this option, according to the shareholder letter.

The new savings goal is $1 billion higher than Paramount’s previous target. The workforce reductions will come from the divestiture of TV businesses in Argentina and Chile, Paramount said.

The restructuring efforts will be completed by the end of 2027, with the company expecting costs of up to $1.3 billion.

“We have taken deliberate steps to flatten our structure and enhance agility,” the company said in the letter.

Management vowed to invest much of the savings in the business, saying it has earmarked $1.5 billion in additional 2026 spending for the Paramount+ streaming service, UFC, third-party licensing and a bolstered film slate. Ellison said on the call that the company plans to release at least 15 movies per year starting in 2026.

Paramount has undergone significant changes since Ellison took control. In addition to signing the agreement with the UFC, he has cut a production deal with the creative team behind the Netflix Inc. hit Stranger Things  and installed Bari Weiss, the controversial founder of the news startup the Free Press, as editor-in-chief of CBS News.

Against that backdrop, the company has been actively pursuing an acquisition of Warner Bros., but has had multiple bids rejected for being too low. Other companies, including Netflix and Comcast Corp., have also been interested in acquiring all or part of Warner Bros., which is in the process of dividing its streaming/studios business and its cable networks into two separate companies.

Ellison said on the call that he couldn’t comment on speculation around deal-making, but said there are “no must-haves for us.”

“We really look at this as buy versus build and we absolutely

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