ViacomCBS

Paramount Skydance is the reconstituted form of one of American media's oldest asset stacks — Paramount Pictures (1912), CBS (1927) and the Viacom cable portfolio — now controlled by the Ellison family through a non-voting public float. It is simultaneously a declining legacy business and an aggressive consolidator. Roughly half of revenue still comes from linear TV Media, which is shrinking mid-single digits annually but throwing off 30%-plus segment margins under severe cost discipline. Growth is concentrated in Direct-to-Consumer, where Paramount+ reached 81.6 million paid subscribers in Q2 FY2026 on the back of an exclusive seven-year UFC rights deal. The defining strategic fact is the pending $31-per-share, roughly $111 billion enterprise-value acquisition of Warner Bros. Discovery — signed February 2026, cleared in 65-plus jurisdictions, and now blocked pending a March 2027 US antitrust trial. Everything about the equity story is subordinate to that binary outcome.

FY2023 figure is Paramount Global's employee population as of 31 Dec 2023 (approximately 22,300, comprising full-time, part-time and temporary employees), disclosed in the FY2025 Form 10-K/A pay-ratio methodology. FY2025 figure is from Form 10-K FY2025, Item 1 (Human Capital Management). Note that the FY2023 and FY2025 populations are not defined identically. Separately, the Q4'25 shareholder letter states that the Telefe and Chilevisión divestitures together streamlined operations by roughly 1,600 people.

Shares outstanding

Source: Form 10-Q for Q2 FY2026, cover page: Market capitalization. Approximately $9.8 billion as of 5 August 2026 per Macrotrends; approximately $12.9 billion as of a Barchart note earlier in 2026; $11.96 billion at a $10.69 share price on 12 May 2026 per WallStreetZen. The Class B closed at $13.40 on 31 December 2025 (Form 10-K/A, used for equity-award valuation). The 52-week range as reported in May 2026 was $8.62–$20.86. The wide dispersion across sources reflects genuine, extreme price volatility through the Warner Bros. Discovery contest and the subsequent antitrust litigation, not a data error; market cap should be re-marked at the time of use.

The company's own characterization

The FY2025 Form 10-K opens with a deliberately brand-led description: Paramount is a global media and entertainment company whose portfolio includes Paramount Pictures, Paramount Television, CBS, CBS News, CBS Sports, Nickelodeon, MTV, BET, Comedy Central, Showtime, Paramount+, Pluto TV and Skydance Media's animation, interactive/games and sports divisions. The Q2 FY2026 Form 10-Q updates the roster to add Paramount Sports Entertainment and Paramount Games Studio and to re-label the Skydance units as Skydance Animation, Film and Television. In its own filings the company describes itself as "fundamentally a content company," a framing it uses specifically to justify the weight it places on trademark, copyright and other intellectual-property protection.

Independent characterization

Paramount Skydance is best understood not as a single business but as three businesses with divergent economics, bolted onto a holding-company balance sheet that is currently being used as an acquisition vehicle.

First, a cash-generative melting ice cube. TV Media — the CBS Television Network, 29 owned-and-operated stations, the domestic cable portfolio, and international free-to-air networks — produced roughly half of group revenue in FY2025. Its revenue declined 9% year-on-year in Q2 FY2026 while its adjusted EBITDA margin expanded from 26.4% to 34.0%. Management is explicitly running this segment for cash extraction, cutting average production cost per episode by nearly 10% for the 2025-26 broadcast season while, on its own account, increasing its share of the top-20 series. This is the classic late-cycle linear playbook and it is being executed well.

Second, a scaling subscription platform. Direct-to-Consumer combines Paramount+ (subscription, two tiers), Pluto TV (free ad-supported streaming, or FAST) and, until its Q2 FY2026 absorption into Paramount+, BET+. Paramount+ revenue grew 16% year-on-year in Q2 FY2026, with management attributing roughly one-third of growth to subscriber additions and two-thirds to ARPU expansion. DTC adjusted EBITDA reached $366 million in Q2 FY2026, a 14.8% margin, up 44% year-on-year. Critically, part of that margin gain is a non-recurring accounting benefit: the pushdown revaluation reduced the carrying value of content assets, mechanically lowering amortization expense. Analysts should discount reported DTC margin improvement accordingly.

Third, a studio in acknowledged rebuild. The Studios segment (film plus television production plus games) swung from a $31 million adjusted EBITDA loss in Q2 FY2025 to a $36 million profit in Q2 FY2026. Management has been unusually candid that it inherited an underperforming slate, doubling theatrical output from eight releases in 2025 to 15 in 2026 and targeting 15-plus annually thereafter — but with CEO David Ellison stating on the Q4 FY2025 call that the two-year tentpole development cycle means franchise economics do not materially improve until 2027 and beyond.

Revenue model

The company disaggregates revenue into four contractual streams. Using the FY2024 mix as the last clean full-year proxy (aggregator data derived from the Paramount Global 10-K):

The FY2025 disaggregation is complicated by the Predecessor/Successor split.

The economic implication is that roughly 80% of revenue is recurring or contractual (affiliate fees, retransmission consent, reverse compensation, streaming subscriptions) and roughly 35% is cyclically exposed advertising. Advertising is also structurally biased: political spending in even-numbered years and marquee sports events (Super Bowl rotation, NCAA Division I Men's Basketball Tournament) create material year-to-year swings that management repeatedly flags as comparability headwinds.

Value chain position and customers

Paramount Skydance is vertically integrated from IP creation through to owned distribution, but it is not fully self-sufficient at either end. Upstream it competes for creative talent through first-look and overall deals and acquires third-party content, including a strategy — new under the current leadership — of commissioning Paramount+ originals from external studios (A24, MGM Television, SISTER). Downstream it distributes through owned platforms (Paramount+, Pluto TV, CBS, cable networks, O&O stations) and licenses aggressively to direct competitors: recent named counterparties include Netflix, Amazon, Apple, Tubi and Tencent.

Customer types are therefore fourfold: (i) consumers paying subscription fees; (ii) advertisers and media agencies; (iii) distributors — MVPDs, virtual MVPDs, affiliated broadcast stations and international platform partners paying carriage, retransmission and reverse compensation; and (iv) other studios and streamers licensing content. End-markets served are US broadcast and pay television, global SVOD and FAST streaming, theatrical exhibition, home entertainment, consumer products and licensing, live events, publishing and, newly, interactive games.

The stated strategy — "three North Star priorities"

David Ellison articulated the strategic frame in the Q4 FY2025 shareholder letter and repeated it verbatim in Q2 FY2026:

1. Investing in growth businesses anchored by creative engines and exceptional storytelling.

2. Scaling the direct-to-consumer business globally.

3. Driving efficiency enterprise-wide with a focus on long-term free cash flow generation.

A fourth, unstated but operationally explicit theme runs through both letters: becoming, in Ellison's phrase, the most technologically capable media company.

The transformation programme

Four workstreams are named in the Q4 FY2025 letter: (i) making technology a core competency; (ii) enhancing corporate-wide efficiency and scalability; (iii) unifying the organization under cohesive leadership; (iv) optimizing the workforce.

Announced strategic initiatives, last 24 months

Medium-term financial targets

Capital allocation priorities, as stated in the Q4 FY2025 letter, in order: (1) invest organically for long-term profitable growth; (2) consider M&A where it accelerates the North Star and financial goals; (3) manage the balance sheet to regain and maintain investment-grade credit metrics; (4) return excess cash to shareholders beyond the current dividend once investment grade is reached. The dividend continues at $0.05 per share quarterly (ex-date 15 September 2026 for the most recent declaration).

TV Media segment

Broadcast operations

CBS Television Network: The domestic broadcast network, operating through CBS Entertainment (primetime comedy and drama, reality, specials, kids' programming, daytime drama, game shows, late night), CBS News and CBS Sports. Content is distributed to owned and affiliated stations and reaches consumers via CBS.com, CBSNews.com, CBSSports.com and associated apps, via Paramount+ and Pluto TV, and via MVPDs and streaming services. Revenue model: national advertising plus reverse compensation from affiliates. FY2025-26 performance claims from the Q4 FY2025 letter: eight of the top ten broadcast series including Tracker (#1 series), Sheriff Country (#1 new show) and 60 Minutes (#1 news programme); the Q2 FY2026 letter narrows this to seven of the top ten for the most recent completed season.

CBS Sports rights portfolio: Regular-season and playoff NFL games including wild-card and AFC divisional and championship games and the Super Bowl on rotation; NCAA Division I Men's Basketball Tournament and regular-season college basketball; college football including the Big Ten Conference and the Army-Navy Game; PGA TOUR, the PGA Championship and the Masters; selected UEFA Champions League matches; selected UFC events; and, per the Q2 FY2026 letter, a new long-term WNBA partnership. Documented FY2025-26 records: CBS's most-watched NFL season on record; the most-watched NFL regular-season game ever (Chiefs–Cowboys, Thanksgiving, averaging more than 57 million viewers); the 4:25pm ET national window as the #1 programme in all of television for a third consecutive year at more than 25.8 million average viewers; the AFC Championship Game at nearly 49 million viewers; the most-watched Masters in over a decade; and the most-watched UEFA Champions League Final ever on US English-language television.

CBS Stations: 29 owned broadcast television stations operating under FCC licences, located in the five largest and 15 of the top 20 US television markets, with duopolies in 10 major markets including New York, Los Angeles and Dallas. (Note: the FY2025 Form 10-K states 29 owned stations in Item 1; President Jeff Shell referred to 28 on the Q4 FY2025 call — a minor internal discrepancy, with the filing taken as authoritative.)

International free-to-air networks: Network 10 (Australia; brands 10, 10 Drama, 10 Comedy) and Channel 5 (UK public service broadcaster; brands 5, 5 Action, 5 Select, 5Star, 5USA, Milkshake). Telefe (Argentina) sold 23 October 2025; Chilevisión (Chile) sold 12 January 2026.

Cable networks — Paramount Media Networks

BET Media Group. Premium entertainment, music, news, digital and public-affairs content for Black audiences, including the BET Awards events and experiences business and VH1. The Q2 FY2026 letter records the BET Awards drawing their highest ratings and largest audience in years.

CBS Sports Network. A 24-hour cable channel carrying Division I college football, basketball, hockey and lacrosse, domestic and international soccer, studio shows, features and documentaries, plus ancillary coverage for major CBS Sports events.

Digital properties. CBS News 24/7 (with local versions from certain owned stations), CBS Sports HQ, CBS Sports Golazo Network.

CBS Media Ventures (CMV). Produces and distributes first-run syndicated programming — talk, court, game shows and newsmagazines — licensed market-by-market to television stations. Also sells national advertising and integrated marketing for its own distributed programming and acts as national advertising sales agent for other major syndicators. Note: CMV remains in TV Media under the new structure, while CBS Studios and Paramount Television Studios moved to Studios.

Direct-to-Consumer segment

Paramount+. Global on-demand and live subscription streaming service combining sports, news and entertainment. Two US tiers:

Sports on Paramount+ include livestreamed CBS Sports programming, UEFA Champions League, Italy's Serie A, the National Women's Soccer League, and UFC and Zuffa Boxing events. Also carries CBS News 24/7, CBS Sports HQ and CBS Sports Golazo Network.

Paramount+ subscriber and revenue trajectory

Source: Q2 FY2026 shareholder letter. Note that the 30 Sep 2025 revenue column covers only the 7 Aug–30 Sep Successor stub, not a full quarter. From Q4 FY2025 the subscriber metric reflects paying subscribers only, excluding free trials, with prior periods restated on that basis.

Named Paramount+ content drivers (FY2025-26): Dutton Ranch (the biggest original series debut in Paramount+ history — 12.9 million viewers in week one, 13.4 million average views per episode across the season); Landman season two (reaching over 25 million subscriber households); The Madison; Marshals; The Agency; Star Trek: Strange New Worlds; Lioness; MobLand; Tulsa King and its spinoff Frisco King; Avatar Aang: The Last Airbender; School Spirits; Discretion (A24, with Nicole Kidman and Elle Fanning); 9/12 (with Jeremy Strong); Fear Not (with Anne Hathaway, produced with MGM Television); Clueless (with Alicia Silverstone); Ascent (with Viola Davis). Management states 40 new or returning DTC series greenlit since August 2025, including more than ten produced externally.

UFC on Paramount+. The seven-year TKO agreement makes Paramount+ the exclusive US and Latin American home for all numbered events and Fight Nights, plus Fight Nights and selected bouts in Australia — 13 marquee numbered events and 30 Fight Nights annually. Documented performance: UFC 324 (January 2026) reached approximately 7 million households and drove the platform's highest global view hours ever in its launch week; UFC Freedom 250, streamed live from the White House South Lawn in June 2026, drew a record 17 million viewers across the US and Latin America; UFC 329 in July 2026 delivered the highest peak concurrent streams in platform history for an exclusive live event, trailing only Super Bowl LVIII. Since the start of 2026, 20 million subscriber households have watched more than 200 million hours of UFC programming — viewership more than 23 times the average pay-per-view event of the prior two years. Technical build-out for launch included approximately 1,400 VOD assets, three-language feeds, availability in 20 markets, live rewind, instant highlight clip creation and sharing, and AI-generated recaps.

Pluto TV. Global FAST service offering curated live linear channels and on-demand content across movies, series, classic television, sports, news and opinion, drama, reality, competition reality, true crime, game shows, comedy, daytime, home and food, lifestyle, anime, animals and nature, music, kids and local news. Revenue model: advertising only. Management characterizes Pluto as engagement-positive but monetization-challenged: DTC revenue from non-Paramount+ sources, primarily Pluto, declined 16% year-on-year in Q4 FY2025 while monthly active users and engagement rose. Remediation includes expanded registration and first-party identity, a larger on-demand catalogue (the full The X-Files library was added in January 2026 and became a top-performing on-demand title), and migration onto the unified technology stack.

BET+. A US subscription streaming service focused on Black audiences (films, television, stand-up comedy, award shows, specials, exclusive originals), historically offered in ad-free and ad-supported tiers. Fully integrated into Paramount+ during Q2 FY2026, moving more than 1,000 hours of BET originals, films and specials onto the larger platform. Migrated subscribers' engagement rose meaningfully versus BET+'s year-to-date average, driven by new seasons of Tyler Perry's Divorced Sistas, Zatima and All The Queen's Men.

Platform and product initiatives. A unified technology stack for Paramount+ and Pluto TV, with first implementation targeted mid-2026 and the first phase underway as of Q2 FY2026. An in-house streaming player validated through more than 800 controlled experiments, delivering materially improved video quality, near-elimination of high rebuffering in low-bandwidth conditions, and Smart TV app startup times 66% faster. Clips, a short-form video experience. Precision+, an AI-powered advertising product combining first- and third-party data for real-time delivery optimization. A separately patented AI system for automatic detection of broken, duplicated, mismatched or non-compliant ads.

Studios segment

Distribution architecture. Domestically Paramount markets and distributes its own theatrical and home-entertainment releases. Internationally it distributes through its own affiliates, through United International Pictures (a joint venture with Universal Studios) in certain territories, or through third-party distributors. Home entertainment on DVD and Blu-ray is distributed worldwide by licensees. Films are co-financed and co-distributed with third parties in exchange for economic participation and partial copyright interest.

Theatrical slate. Eight releases in 2025; 15 in 2026; on track for 15-plus in 2027. Named 2026 titles: Scream (seventh installment), Billie Eilish – HIT ME HARD AND SOFT: THE TOUR (LIVE IN 3D) directed by James Cameron and Eilish, Scary Movie (under the Miramax first-look deal), an untitled Jackass film with Johnny Knoxville, PAW Patrol: The Dino Movie, Ebenezer: A Christmas Carol with Johnny Depp, Street Fighter (with Legendary), an untitled John Tuggle project with David Corenswet and Isabel May, Children of Blood and Bone directed by Gina Prince-Bythewood, and Mr. Irrelevant — the NFL's first theatrical release. 2027 and beyond: a new Paranormal Activity film (James Wan / Jason Blum / Oren Peli), the third A Quiet Place installment, Sonic the Hedgehog 4 with SEGA, a Call of Duty adaptation with Activision (Taylor Sheridan and Peter Berg attached), Teyana Taylor's directorial debut Get Lite, a Seth Rogen Mutant Mayhem sequel (2027) and a live-action/CG hybrid Turtles film (2028).

Talent deals signed under new ownership: Jon M. Chu (three-year first-look film and TV), Issa Rae (multi-year first-look film and TV), Dan Trachtenberg (three-year first-look directing and producing), Ashley Lyle and Bart Nickerson (overall deal at Paramount Television Studios), the Duffer Brothers (four-year exclusive pact), Matt Stone and Trey Parker, Liz Tigelaar, James Mangold.

Franchise monetization. Teenage Mutant Ninja Turtles has generated over $10 billion in global retail sales since Paramount acquired the property in 2009; a Mattel toy partnership was announced, described by management as the largest consumer-products partnership in the company's history at over five times any prior deal.

Cross-portfolio initiative

"Paramount One." An enterprise-wide marketing and activation platform launched in early 2026 that mobilizes all linear channels, DTC platforms and owned properties behind priority campaigns and tentpole events. Its first major deployment was the UFC launch, with promotional inventory across CBS's record Thanksgiving Day NFL game and New Year's Eve primetime coverage.

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