Paramount Skydance to up content spend by $1.5bn in 2026

Paramount Skydance is priming itself for “significant expansion” of its TV studio operations, with plans to increase annual spending on content next year by $1.5bn (£1.14bn).

Chief exec David Ellison revealed the move after confirming Q3 results that saw revenue hitting $6.7bn, below Wall Street expectations of $7bn, with ad revenue down 12% and an overall net loss of $257m.

However, he expects a “healthy acceleration” for streaming that will push revenues to $30bn in 2026, with operating income before depreciation and amortisation (OIBDA) predicted to hit $3.5bn.

Savings (more below) are also expected to hit $3bn rather than $2bn, with the results helping to push the share price up more than 6% in after-hours trading to $16.25.

Studio expansion

Ellison said the company, which was created 97 days ago when Ellison’s Skydance acquired Paramount, is preparing for a “significant expansion of our total television studio output over the coming years”, with titles to be distributed both on its own platforms and licensed to third-parties.

Few details were given as to how the expansion would play out, although the company recently reinstated Paramount TV Studios, which operates alongside CBS Studios. 

It has also recently signed up Stranger Things creators the Duffer brothers and struck deals with stars such as Jessica Biel, as well as inking a five-year pact with South Park creators Trey Parker and Matt Stone.

Ellison also pointed to the seven-year exclusive deal for UFC rights, with sports content receiving regular mentions in his letter to shareholders.

“Incremental programming investments” will also be made in 2026 “in excess of $1.5bn”, he added, fuelling Paramount+ originals, third-party licensing and films, as well as the costly UFC rights deal.

Ellison said direct-to-consumer – namely Paramount+ – was his “top priority”, with shows such as Tulsa King, Mayor of Kingstown and Landman noted as audience drivers. Little mention was given to the creator of all three shows, Taylor Sheridan, who is leaving the studio for NBCUniversal in three years.

But Ellison said the company’s studio would “continue to drive original content” to fuel Paramount+, while third-party licensing for both originals and catalogue would be expanded and the library refreshed “more regularly”.

He added: “This approach is designed to deepen viewer engagement and strengthen retention. At the same time, we are investing in a more balanced, year-round programming strategy for our streaming slate.

“This includes establishing an originals launch calendar with tentpole releases spread across the year—moving away from the historical concentration around the sports season and year-end surge, which has previously led to uneven engagement.”

Job cuts, subs costs & international plans

Price rises to support the spending will come in the US in Q1, while the focus will continue to shift from subs count to profitability as the key metric of success.

The Paramount Skydance chief exec also noted recent job cuts, which he said were part of a strategy to “flatten our structure and enhance agility”. A quarter of the 1,000 departing staff were at senior vice president level and above, he added.

Around 600 staff in the US have also taken up the company’s voluntary severance package introduced as part of plans for employees to return to the office full time, five days a week.

Ellison also said that investment “in select international markets without a clear path to sufficient scale” would be reduced, but no specific territories were mentioned.

He did, however, point to increased investment in local content in “key regions”, citing Latin America, Canada, and parts of EMEA, “where we see significant growth potential.”

That does not apply to its Lat Am broadcast operations, however, with the company already completing a deal to sell Telefe in Argentina. It is also offloading Chilevision in Chile, a deal expected to wrap in Q1 2026, with the combined sales reducing the global headcount by a further 1,600.

There was no word on operations in other countries, with neither 5 in the UK nor Network 10 in Australia mentioned in the earnings call or letter to investors.

Global integration

The broader moves will, however, see around $3bn cut from the budget when coupled with unspecified “additional structural efficiences still to come”. 

More than $1.4bn of these savings will have been made by the end of 2025, with the remainder hitting next year, with a one-time cost to the company of around $1.2bn over the next two years.

The chief exec also pointed to the “greater alignment” between Paramount Skydance’s global and regional teams, which Ellison said would lead to “faster decision-making, more agile execution, and a cohesive content and distribution strategy across all markets.”

Ellison also said the company would be “reinforcing the foundation of our linear television business,” describing CBS as “a key driver of revenue growth and profitability.”

Ellison admitted there were “persistent structural headwinds” for linear, but added that the network continued to “perform well”. Major US rivals such as Warner Bros Discovery and NBC Universal are overhauling their operations by splitting their linear and streaming assets.