Media analyst Evan Shapiro says Wall Street’s $111 billion valuation of newly formed Skydance is lazy math that ignores fading cable cash flow and a crushing debt load.
Paramount closed a $111 billion purchase of Warner Bros. Discovery last week and formed Skydance. Publicly traded shares cover about 10% of the equity, and the market has treated that deal price as the company’s full value.
Shapiro told Yahoo Finance that shortcut is wrong. His team puts Skydance’s net asset value at $29 billion, and he says the $111 billion figure simply recycles what billionaire Larry Ellison paid for Warner Bros. Discovery.
In an interview with Yahoo Finance Senior Reporter Brooke DiPalma, Shapiro did not soften the point.
"That's the price that Ellison paid for Warner Bros. Discovery. That's just lazy, and it's incorrect."
He published the $29 billion estimate in his Media War & Peace newsletter. The core dispute is simple: one number comes from a takeover price, the other from an asset-level read of what the combined company actually holds and earns.
Skydance now owns a sprawling media stack. That includes the Warner Bros. and Paramount movie studios, streaming services HBO Max and Paramount+, and TV networks such as CBS, CNN, HBO, TNT, TBS, Nickelodeon, and MTV.
Shapiro’s objection starts with how that empire still makes money. He described Skydance as a business whose primary cash flow is coming from fading linear cable, the old pay-TV bundle that has been losing ground for years as viewers move to streaming and on-demand options.
"a business whose primary cash flow is coming from fading businesses, linear cable."
Scale on paper does not fix that problem. Shapiro said the company cannot negotiate Warner Bros. and Paramount channels together. He also said the two studios must stay separate. Those limits undercut the usual merger pitch that bigger automatically means stronger pricing power and cleaner operations.
Investors chasing a $111 billion story are, in his view, pricing a turnaround that the cash-flow mix does not yet support.
The balance sheet makes the optimism harder to defend. Shapiro said Skydance started with $81 billion in debt after taking on $52 billion in new borrowing to help pay for Warner Bros. Discovery.
That is not abstract leverage. Interest, refinancing risk, and covenant pressure hit a company still tied to cable fees and expensive studio operations. A rich takeover headline does not service the notes.
Shapiro tied the risk to Ellison and Oracle. He said they are backstopping Skydance and are expected to provide additional financing if the company gets into trouble. He also said the Ellison-related debt and Skydance’s debt are now intertwined, and that the cost of borrowing is substantially higher than it was.
Yahoo Finance noted Bloomberg’s recent reporting that Oracle has nearly doubled its long-term debt to more than $160 billion over the past two years. Pair that Oracle figure with Shapiro’s Skydance debt number and the combined load tops $240 billion.
Shapiro put the comparison in blunt market terms.
"The Ellisons now owe more than the valuation of Disney, Fox, and Roku combined"
As of Monday’s close, Disney, Fox, and Roku together were valued at $236 billion. In Shapiro’s framing, the debt stacked around this deal now rivals the equity value of three major media and streaming names at once.
Shapiro argued the market’s $111 billion read is not rigorous analysis. It is an anchor to the purchase price, then a shrug.
"So there's no way that this company is worth $111 billion"
He said analysts on Wall Street are now articulating the “Ellison risk”, the chance that the backstop, the intertwined debt, and the higher borrowing costs become the story instead of synergy slides.
"Analysts on Wall Street are actually now articulating the Ellison risk."
Not everyone on Wall Street buys the markdown. Some analysts have argued that the film and television library alone could justify a high price. Shapiro’s $29 billion net asset value sits on the other side of that argument. Yahoo Finance presented the clash; it did not settle it.
What the reporting does establish is the shape of the bet. Skydance holds famous studios, big streamers, and major networks. It also holds fading cable cash flow, structural limits on joint channel deals, separate studio requirements, and tens of billions in new debt tied to a backstop from Ellison and Oracle.
Deal price and market value are not the same thing. One is what a buyer paid in a takeover. The other is what the business can support after the confetti settles.
When a media giant’s headline worth rests on borrowed money and legacy cable, shareholders should demand math, not momentum.