• by Wayne Friedman , 4 hours ago

Total advertising revenue for the combined company created by the just-completed Skydance Corp. deal -- Paramount Skydance and Warner Bros. Discovery -- is estimated to be flat to slightly up over the last two years, largely attributable to streaming platforms.

The combined company's advertising revenue is projected to hit $19.0 billion to $21.6 billion in 2027, up from the estimate of $18.5 billion to $20.7 billion in 2026. This growth is driven by average projections in media analysts including Bank of America, Morgan Stanley, and MoffettNathanson Research.

Linear TV advertising will see a 5% to 8% decline annually to $11.0 billion to $12.1 billion in 2027 from $12.0 billion to $13.2 billion this year. This is attributable to subscribers' cord-cutting, and the absence of NBA games on WBD networks. Midterm political advertising is projected to contribute an additional $300 million in revenue.

The newly formed Skydance Inc. now encompasses a portfolio of major streaming platforms, including Paramount+, HBO Max, Pluto TV and discovery+.

Streaming platforms including Paramount+, HBO Max, Pluto TV, and discovery+ will continue to rise between 20% and 35% per year, reaching a total of $8.0 billion to $9.5 billion in 2027 -- from $6.5 billion to $7.5 billion this year.

The company intends to produce 30 theatrical films a year for the next several years -- about half each for Paramount Pictures and Warner Bros. 

It also produces 180 TV shows currently that air on its networks and platforms or are sold to other networks and platforms.  

Looking specifically at direct-to-consumer streaming platforms, Skydance will have 40-plus new or returning shows on its streamers, including Paramount+, HBO Max and discovery+.

Analysts note that consolidating Paramount/WBD advertising sales could add between $400 million and $600 million in operating incomes from ad sales operations over the next two years.

Looking at cost synergies alone, media analyst of StoneX Financial Daniel Kurnos says: “We would point to a unified advertising sales operation as the clearest near-term upside, and note that it is only partly in our numbers... we model [an estimated] network advertising benefit building to roughly $210 million by 2030.”

The positive advertising news going forward is overall advertising market leverage.

“A company representing more than a quarter of national TV advertising will have greater leverage during the upfronts and potentially somewhat more pricing power with advertisers,” according to media analyst Madison & Wall. “It should also have more leverage when bidding for sports rights, negotiating distribution and retransmission agreements, and negotiating with talent and other content providers.”