Wall St. Sours on the Ellison Deal: ‘This Should Not Be a Public Company’
Analysts warn that debt, shaky financing and a Middle East war could derail history’s largest test of legacy media
I’ve written about shrinking TV news salaries, the Paramount spin doctors who waged the shadow war for Warner Bros. Discovery and Wall Street insiders’ 2026 predictions for Hollywood. I also write The Media Mix newsletter.
The Ellisons may have persuaded the Warner Bros. Discovery board to agree to a $111 billion merger, but they have yet to convince Wall Street.
That’s now Paramount CEO David Ellison’s next challenge, and boosting the stock price is a math problem possibly too hard for even Sheldon and Leonard of WB’s Big Bang Theory.
If the deal closes, it will be the largest leveraged buyout ever — and arguably the highest-stakes bet on the future of legacy media ever made. If Ellison can pull off a success, he will show that the old studios, broadcast and cable can be retooled for the streaming era.
If he can’t, the wreckage will reshape the industry: thousands of jobs lost, brands dissolved and a cautionary tale that could chill consolidation for years.
At its core, the deal is a referendum on an essential Hollywood question: Is there a viable path forward for companies that are neither Netflix nor a pure tech platform?
The early verdict from the market is blunt. Paramount Skydance stock has lost almost 14 percent over the past week, trading close to its 52-week low of $9.48. It’s down 35 percent since Feb. 27, when the company’s ninth offer for Warners was finally accepted — a clear signal that investors aren’t treating this as a bold bet on the future of media, but as a highly leveraged risk.
“This should not be a public company,” one major media investor tells me. “It has too much debt. It’s too hard.”
Paramount Skydance will now carry more debt — $79 billion — than almost any media company has ever survived. The next two years will be a live experiment, conducted at enormous scale. That Ellison has yet to even schedule an investor roadshow suggests he knows the reception won’t be warm.
Now shareholders face a long and risky wait to make money on the merged companies, just like those who invested in WBD in spring 2022 when it debuted at $24.08 a share. By 2023 that stock had fallen to $10 a share and pretty much stayed there for the next two years — until the Ellisons came calling at $31 a share.
Below, I talk to Wall Street insiders and analysts about the rough uphill battle facing Paramount-Warners, including:
Skepticism around Ellison’s $6 billion “synergy” target — and why some say it’s not even close
The collision between a promised $30 billion in content spend and $79 billion in debt: “How do you not destroy relationships in Hollywood?”
The “dead money” warning from analysts — and what history says about deals like this
How a junk downgrade on existing Paramount Skydance debt could test the limits of today’s credit markets
Why the war in the Middle East may be putting billions in expected funding at risk
The chance of Ellison still ultimately walking away rather than closing the deal
 | A guest post by
|