Paramount-Warner will be called Skydance, ticker SKYD; WBD trades 7 cents below its $31.02 payout

Paramount Skydance and Warner Bros. Discovery will become one company called Skydance, trading under the ticker SKYD, when their merger closes next week, Paramount Skydance CEO David Ellison said on Friday, CNBC reported. Ellison said the name lets Paramount and Warner Bros. stay distinct studios under one parent. "We never wanted a new corporate identity to diminish, alter or overshadow either one," he wrote in a social media post.

The companies said on Sept. 30 that they expect the deal to close on Oct. 6, subject to customary closing conditions. Ellison and outgoing Mattel CEO Ynon Kreiz will be co-CEOs. CNBC put the deal, agreed in February, at about $110 billion including debt. Deadline also reported the new name.

The number behind the number: the payout is not exactly $31

Warner Bros. Discovery shareholders get $31 in cash per share plus a daily "ticking fee." Under the closing release, the fee is $0.00277778 a share for each calendar day after Sept. 30, up to and including the closing date. If the deal closes on Oct. 6 as planned, that is six days and a total of $31.01666668 a share.

WBD traded at $30.945 shortly after Friday's open, down half a cent, according to Nasdaq. That leaves a gap of about 7.2 cents to the expected payout:

• Spread: $31.0167 minus $30.945 = about $0.072 a share, or 0.23%.
• Over the four calendar days to Oct. 6, that is equivalent to a simple annual return of roughly 21%.
• The ticking fee works out to about $1.01 a share a year, or about 3.3% of the $31 price, so each day of delay adds roughly a quarter of a cent.

A 21% annualized gap is far more than cash earns. Short-dated Treasury bills yield a little above 4%, per the Treasury's daily curve. Part of that is mechanics. Spreads on deals this close are a few cents, settlement of the cash can take some days after closing, and trading costs eat into anything that small. But the price also says the market is not treating the Tuesday date as certain. The ticking fee is designed to compensate holders for exactly that kind of slippage.

What changes for each set of shareholders

Warner Bros. Discovery holders are being cashed out. After closing they own no stake in Skydance unless they buy one. Investors who held through the bidding war are now down to the last few cents of the deal.

Paramount Skydance holders keep their shares in the combined company, which will trade as SKYD. PSKY was up 1.5% at $9.48 early Friday. They inherit a far larger business, plus the debt raised to pay for it. Paramount and Warner Bros. together are set to release 35 films next year, CNBC reported, citing Rentrak data.

For traders, the practical points are the ticker change and the date. Any slip past Oct. 6 shows up in the ticking fee, a little over a quarter-cent a day.

Earlier coverage: the deal clearing and Kreiz's appointment, and the debt raised to fund it.

Sources: CNBC; Warner Bros. Discovery and Paramount Skydance closing-date release; Deadline; Nasdaq quotes at 9:52 a.m. ET; U.S. Treasury daily par yield curve. Spread and ticking-fee figures are our calculations. This is market information, not investment advice.