Paramount Skydance Corp. is promising to cut $6 billion in costs within three years as it seeks lenders for its Warner Bros. Discovery Inc. acquisition. The company is marketing a massive $52 billion package of loans and bonds this week, with the investment thesis relying on achieving these savings to boost expected EBITDA to $18.7 billion annually, up from $12.7 billion.

The savings, from combining enterprise software and cutting real estate, would help lower leverage to about 4.4 times, targeting investment-grade credit metrics. However, execution risk is significant as the business faces changing consumer habits and a commitment to release 30 movies a year.

Credit Sights analysts Hunter Martin and Brian Mc Kenna called the synergy target “very aggressive,” remaining “highly skeptical” about hitting leverage targets of 3.75 times in 2028 and 3 times in 2029. CEO David Ellison pledged family support to maintain leverage, viewed as “key downside support.”

Paramount’s 2024 merger with Skydance Media, which achieved over $3 billion in annual efficiencies, provides a proof point. Moody’s, S&P, and Fitch expect leverage around 7 times post-acquisition. Spokespeople for Paramount, Bank of America, and Apollo declined to comment.