Skydance Stumbles, Rivals Win
Tim Devane@tdevane
+1.7%
since Oct 8
The idea
I think the Skydance combination of Paramount and Warner Bros. ends up like the AOL Time Warner merger: too much debt, a messy streaming integration, and creators and viewers drifting elsewhere. I can't bet against it directly, so this take owns the likely beneficiaries instead, split between streaming rivals and studios positioned to catch the talent and franchises that leave. I'm holding some cash back to add if Skydance headlines hit these stocks, and I'm thinking in years, not weeks, since the AOL unwind took a while to play out.
What it owns
- When a combined HBO Max and Paramount+ struggles with integration and subscriber losses, the largest rival streaming services gain viewers and creators looking for a stable home. · NetflixIt is the largest streaming rival positioned to gain subscribers and talent if the combined HBO Max and Paramount+ struggles with integration and cuts spending., AlphabetYouTube gains viewing hours and creators when traditional studios reduce output, and search and cloud revenue make this a diversified play on streaming disruption., AmazonPrime Video and MGM Studios position it to acquire talent and content that Skydance and its rivals stop making, though retail and cloud drive most earnings.45%
- Directors, showrunners and projects leaving a cash-constrained Warner Bros. and Paramount need funding and infrastructure, which well-capitalized studios can provide. · Walt DisneyIt operates the largest rival studio and streaming services, making it the most likely destination for directors and franchises leaving a budget-constrained Warner Bros. and Paramount., ComcastIt owns Universal Studios and Peacock, giving filmmakers an alternative when Warner Bros. and Paramount tighten spending, and the cable decline is already reflected in the valuation., Sony GroupSony Pictures sells to all streamers rather than competing directly, so it benefits when other studios cut production and buyers need content from independent sources., Lionsgate StudiosIt can absorb mid-size projects and talent cut by a combined Warner Bros. and Paramount, and its smaller scale means it swings harder when winning those deals.43%
- Cash12%