Netflix lost the Warner auction but gains a seller: Paramount Skydance carries more than $80 billion of debt

The auction Netflix lost closed at $9.70

David Ellison's takeover of Warner Bros. Discovery closed on Tuesday↗, ending an auction Netflix had already signed for, and the combined company, Skydance, began trading on the New York Stock Exchange as SKYD ¹². The shares opened near $9.70, about half of Paramount Skydance's 52-week high, and the company behind them carries more than $80 billion of debt ¹. Netflix had signed first for Warner's film and television studios and streaming business; Paramount won in February partly by covering the breakup fee Warner owed Netflix ².

Underneath sits $47 billion of new equity priced at $12 a share, $24 billion of it from the sovereign funds of Saudi Arabia, Qatar and Abu Dhabi, leaving nearly half the company foreign-owned ¹. Wall Street has flagged the debt load, and Skydance has promised $6 billion of cuts over three years, from technology, procurement, marketing and real estate ¹.

The cuts point at overhead, not scripts

The settlement pushes the other way. To end 12 states' antitrust suit↗ on September 21, 2026, Skydance agreed to lift US production spending by at least $300 million a year, release 30 films theatrically in its first two years and 32 in the three after, on pain of $30 million per missed film and a forced sale of Miramax ³. It has also committed to a 45-day theatrical window before any streaming ⁴. Closing on October 6 dodged a ticking fee worth an estimated $650 million a quarter ³.

The vault stays open, for a price

Ellison says HBO stays HBO and the company believes in licensing its content to other platforms, which in practice means Netflix, whose more than 325 million subscribers still outnumber a combined HBO Max and Paramount+ at a little over 200 million ⁴. Paramount and Netflix say their licensing relationship continues even after ending the Skydance Animation output deal in September↗; two films finish on the service, then that slate goes theatrical too ⁵. A rival carrying $80 billion of debt is, whatever else it becomes, a seller.

Netflix's counter is production math

Netflix paid $587 million in cash for Ben Affleck's InterPositive in March, disclosed in its own 10-Q, and roughly 300 of its titles used generative AI this year, with sequences Ted Sarandos credits as twice as fast at half the cost ⁶. It guides to $51.0 to $51.4 billion of 2026 revenue↗ ⁷. Whose money this moves is already visible: SKYD marked the new balance sheet at $9.70, while NFLX sits 41.6% below where it traded a year ago on engagement worries ¹⁸. The next reading lands on October 20, when Q3 reports after the close ⁸.