What this case covers
Thirty-two practitioner slides organized in four blocks: (1) situation setup — cover,
executive summary, transaction factsheet, timeline; (2) deal mechanics & financing —
structure, sources & uses, cap stack, and the $46.95B PIPE detail; (3) pro-forma financials
& valuation — the combined pro-forma income statement (FY2025) and balance sheet (3/31/2026)
rebuilt from the filed 8-K Exhibit 99.2, ASC 805 purchase price allocation, sum-of-the-parts
segment build, and cost synergy build; (4) portfolio deep-dive plus governance & regulatory
posture including the 12-state antitrust complaint and the straight-to-trial gamble.
Every quantitative claim is tied to a filed document.
Purchase price, sources and uses, PIPE syndication, PPA intangibles, combined-entity
balance sheet, and the pro forma cash position are all anchored to Paramount Skydance
Form 8-K Exhibit 99.2 (Unaudited Pro Forma Condensed Combined Financial Statements)
filed February 2, 2026. Peer multiples and precedent transactions cite the filed 10-Ks of
each named company.
The July 31 update — straight-to-trial gamble
Landing-page commentary only. This reflects post-finalization Wall Street Journal reporting and is not currently incorporated into the deck PDF.
Per the Wall Street Journal (July 31, 2026), David Ellison and chief legal officer
Makan Delrahim have elected to bypass the preliminary-injunction fight and go
straight to trial on the merits. Paramount is pushing for
November 4, 2026; the state AGs' coalition is pushing for April 5, 2027. Judge
Martínez-Olguín rules on schedule in the coming days. Paramount has added
trial attorney Beth Wilkinson — who successfully defended Microsoft's $75 billion
Activision Blizzard acquisition against the same lead counsel now representing the state
AGs. California Governor Gavin Newsom has expressed concerns to Bonta's office about the
Hollywood-employment impact of blocking the deal, per the WSJ. Paramount is also
considering incentives to persuade individual states to drop out of the coalition. Deal
has cleared regulatory review in 65 jurisdictions globally.
The August 4 update — Q2'26 print and raised full-year guide
Landing-page commentary only. The Q2’26 disclosures below post-date the deck’s finalization and are not currently incorporated into the 33-slide deck PDF; they are captured here as an Institute reader update on standalone-Paramount trajectory while the WBD merger is pending.
Paramount Skydance filed its Q2'26 shareholder letter on August 4, 2026, the first full standalone quarter one year after the Skydance-close (the letter frames itself as "one year in"). Highlights (all sourced to the shareholder letter):
- Q2'26 revenue $6.9B, +1% YoY against the predecessor-company Q2'25 comparable. DTC +9% to $2.5B, Studios +16% to $1.3B, TV Media -9% to $3.1B.
- Q2'26 Adjusted EBITDA $1.1B, 15.9% margin, +27% YoY. DTC Adj. EBITDA $366M (14.8% margin, +44%); Studios $36M (2.7% margin, up from -$31M loss); TV Media $1.06B (34.0% margin, up from 26.4% margin).
- Paramount+ 81.6M subs (+~2M in the quarter, +6% YoY); ARPU +~12% YoY. Q2 was "the best quarter for retention in Paramount+'s history" per management, powered by Dutton Ranch (record 13.4M average views per episode), UFC, and the FIFA World Cup in six LATAM countries.
- Full-year 2026 outlook raised. Adj. EBITDA guide moves to $3.8–$3.9B (12.8% midpoint margin) from the prior $3.8B; revenue guide reaffirmed at $30B (+4%); FCF conversion at least 10% before roughly $800M of transformation costs.
- Q3'26 guide. Revenue $6.95–$7.15B (+4% to +7% YoY), Adj. EBITDA $875–$975M (13.1% midpoint margin). Roughly $70M of stock-based comp and $200M of transformation costs anticipated in Q3.
- Capital structure at 6/30/26. $1.6B cash and cash equivalents, $15.2B gross debt, $1.8B drawn on the revolving credit facility after a $350M Q2 paydown. Recall the Q1 draw was $2.15B to fund the $2.8B WBD termination fee owed to Netflix on entering the merger agreement; that draw is to be repaid from private-placement proceeds tied to the WBD close. $86M of debt matures during the remainder of 2026.
- WBD merger prep continues in parallel. Management reaffirms confidence in closing, restated the public commitment to 30+ films/yr at a 45-day theatrical window post-close, and framed the transaction as "pro-competitive, pro-consumer, pro-creative community" against the tech-funded Netflix/Amazon/Apple field.
Two-line practitioner read against the deck: the standalone-Paramount trajectory is materially stronger in Q2 than the case's baseline PF-2025 print implied, which tightens rather than loosens the Ellison-side argument that Paramount can execute standalone if the merger is blocked. The raised full-year Adj. EBITDA guide of $3.8–$3.9B is on top of the $3.8B floor previously cited in the deck; the incremental $0–$100M is small in synergy terms but signals directional over-execution. The Q2'26 print does not change the deal terms, the $46.95B Ellison-Trust PIPE architecture, the 12-state suit, or the trial-schedule fight.
What the deck answers
- Deal terms & financing. $110B EV walks to $97.3B purchase consideration walks to $77.8B cash to WBD shareholders. $46.95B PIPE anchored by the Lawrence J. Ellison Revocable Trust with sovereign wealth syndication (PIF, QIA, L'Imad, LionTree) plus $54B of new senior secured debt and $12.8B WBD notes exchange.
- Combined portfolio. Paramount Pictures + Warner Bros. Pictures (two of five major studios), Paramount+ / HBO Max / Discovery+ combined streaming, ~30 cable networks, CBS + CNN news franchises, and the combined sports rights portfolio (NFL AFC + UFC + SEC + March Madness) minus WBD's NBA departure to Amazon/NBC.
- Regulatory posture. Federal antitrust cleared June 12, 2026. FCC license-transfer cleared. Twelve state AGs filed July 13, 2026 in N.D. Cal. TRO July 20, extended July 24. July 31 pivot to straight-to-trial. 65-jurisdiction global clearance record on Ellison's side.
- SOTP walk. Segment sum-of-the-parts read against the announced $110B enterprise value. Base case, downside (structural divestitures required), and upside (states settle behavioral) scenarios walked with peer-multiple bounds.
Download the deck
Cross-references in the Institute library
What’s published on this case. The Institute’s published artifact for this case is the 33-slide practitioner deck linked above — that is the only downloadable Institute document. Every quantitative claim inside the deck is tied to Paramount Skydance Form 8-K Exhibit 99.2 (Unaudited Pro Forma Condensed Combined Financial Statements, filed February 2, 2026) plus the underlying company 10-Ks referenced within. The “July 31 update” and “August 4 update” blocks on this landing page are web-only Institute commentary reflecting information disclosed after the deck was finalized (the Wall Street Journal straight-to-trial reporting of July 31, 2026 and the Paramount Skydance Q2’26 shareholder letter of August 4, 2026, respectively). Those two blocks are not currently rendered into the deck PDF. If a full deck refresh incorporating post-finalization disclosures is published later, this line will be updated to reflect it.
Disclosure. Independent editorial analysis by The Baratelli Institute. Not investment advice. Not legal or tax advice. Regulatory posture and financial disclosures on this landing page reflect information available as of August 5, 2026. The Baratelli Institute is not affiliated with, endorsed by, or connected to Paramount Skydance Corporation, Warner Bros. Discovery, or any party to the transaction. Marks are the property of their respective owners.