Sports Is Key to Skydance Becoming ‘Leading Content Engine’ 

Sports will remain core to Skydance Corp.’s new existence, company leaders insisted on Tuesday. 

As the merger of the parent companies of CBS Sports and TNT Sports officially closed, Skydance co-CEOs David Ellison and Ynon Kreiz spent part of Day 1 of the new corporate identity meeting with employees and press in Los Angeles. The executives laid out an ambitious vision that includes making Skydance “a leading content engine in the world.”

“The investment thesis is about increasing output and establishing the company as a linear content engine. When you do that, you can then drive growth in the digital business,” Kreiz said. “You can continue to optimize your linear channels around the world, which is a large business.”

In the U.S., that linear viewership is led by live sports, and the NFL in particular. As Ellison and Kreiz were making their remarks late Tuesday, CBS Sports said that a late afternoon NFL game last Sunday between the Chiefs and Raiders averaged 28.4 million viewers, making it the new leader as the most-watched NFL game so far this season. 

The latest Skydance message is also consistent with those Ellison made prior to the merger while running CBS Sports parent company Paramount. In prior earnings calls, he said that Paramount in its current and future iterations would remain a “buyer of sports rights.”

In the new structure, Skydance has a powerful combined portfolio of rights that includes the NFL, MLB, NHL, March Madness, the Masters, NASCAR, UFC, UEFA, and several major college sports conferences. 

The investment community remains intrigued with Skydance’s potential in a quickly morphing media business, but is still concerned about the company’s heavily leveraged balance sheet that includes the roughly $80 billion in debt, as well as significant exposure to expected declines in linear television.

“Ultimately, shareholder value and the stock’s multiple will depend on whether management can grow streaming profits faster than the decline in the legacy TV business,” UBS analysts said in a research note to investors.

Along those lines, Skydance plans to merge the currently separate Paramount+ and HBO Max streaming services into a single offering. 

UBS, however, acknowledged that the combined holdings within Skydance will make it more capable of handling an expected escalation in NFL rights fees. The league has opt-outs in its domestic media agreements that, for most of the rights holders, expire after the 2029 season. 

“Live sports represents ~10% of [Skydance’s] linear viewership, and the combination provides a complementary set of rights,” UBS wrote. “Greater scale will also help absorb the impact of an NFL renewal.”

Further Boost for Berson

David Berson, who was CBS Sports CEO prior to the merger, was formally appointed to lead the combined sports operations. Berson’s title will be chair of the Skydance Global Sports Group, and he will report to George Cheeks, now the co-chair and chief content officer of Skydance TV.

“David is a world-class executive and leader,” Cheeks wrote in a company memo. “His programming expertise, business acumen, and stewardship of CBS Sports are highly respected by partners, peers, and his team. Sports will be an important part of Skydance, providing value to all our internal and external stakeholders.”

Cheeks in the memo also further confirmed the departure of Berson’s counterpart at TNT Sports, Luis Silberwasser, and wrote, “Luis has led the TNT Sports team with distinction and genuine care, and we are grateful for his partnership.”