This article first appeared on GuruFocus.
Paramount Skydance Corp. (NASDAQ:PSKY) is entering its most transformative phase yet under new chief executive David Ellison and investors noticed. The stock climbed as much as 5% in premarket trading after the company announced a deeper overhaul aimed at saving at least $3 billion. That figure marks a $1 billion increase from its earlier target, backed by a plan to cut 1,600 additional jobs and divest its TV units in Argentina and Chile. Ellison, who merged his Skydance Media with Paramount in August through an $8 billion deal, is reshaping the legacy studio into a leaner, faster, content-focused player. The restructuring, expected to cost up to $1.3 billion through 2027, follows voluntary exits by roughly 600 employees ahead of a full return-to-office mandate in January.
Financially, the third quarter showed mixed results. Revenue came in at $6.7 billion, just under the $6.87 billion Wall Street forecast, while adjusted operating income before interest, taxes, depreciation, and amortization reached $952 million. The company expects about $30 billion in revenue next year, slightly ahead of analyst estimates. Paramount+ added 1.4 million new subscribers, bringing the total to 79.1 million, and will raise U.S. prices early next year. Ellison said the streaming arm is shifting toward a more balanced, year-round programming strategy designed to deepen engagement. Much of the upcoming savings will be funneled back into growth including $1.5 billion in new 2026 spending across Paramount+, UFC projects, third-party licensing, and a bolstered film slate that aims for at least 15 releases annually.
Ellison’s early moves are signaling a clear creative and strategic reset. He has inked partnerships with the team behind Netflix’s Stranger Things, struck a major production deal with the Ultimate Fighting Championship, and appointed Free Press founder Bari Weiss as CBS News’ editor-in-chief. Meanwhile, the company’s ongoing pursuit of Warner Bros. Discovery remains a live storyline, though multiple offers have been turned down for being too low. Ellison declined to comment on deal speculation but hinted at a pragmatic path forward: We really look at this as buy versus build, and we absolutely have the ability to build to get to where we want to go. Investors seem to be betting he might just do both.