Warner Bros‘ Motion Picture Chiefs Michael De Luca and Pamela Abdy‘s last day will be next Tuesday, which is essentially day one of Skydance, the new Paramount Warner Bros merger.

The move ends months of speculation as to whether the duo would make the jump to the new merger given the down box office year they had with $448.4M domestic for the Jan. 1-Oct.1 period, off from their milestone $4.3B last year, not to mention this weekend’s Tom Cruise $125M-$160M+ bomb, Digger, which will be lucky to even open to $10M domestic.

There were some insiders who were skeptical about De Luca and Abdy. For the duo, from what we’ve been told, they were blindsided and upset to learn about their fates from last night’s reports without ever receiving a phone call from Skydance co-CEO David Ellison. Their was an expectation about them that they’d at least walk into the newly combined studio, much like they did the new Amazon MGM Studios. The notion was that De Luca and Abdy would continue to oversee edits, filmmaker relations, marketing and distribution of the prized 39 dated films that they’re delivering to the new merger which will count 70 films between this weekend and into 2029. A dinner, we hear, between the duo and Ellison months ago provided optimism.

Ellison finally caught up with De Luca and Abdy today to deliver the news that they read in the press. A decision was made by the cost-controlling co-CEO in his quest to pay down debt to keep his current Paramount Pictures Co-Chairs Dana Goldberg and Josh Greenstein in charge over not just the Melrose lot, but all Warner Bros theatrical brands. That structure doesn’t jibe with the current terms of De Luca and Abdy’s WBD contract which runs through 2030, which has the duo reporting to the CEO, with marketing and distribution reporting to them.

So what now?

Ellison will need to pay out De Luca and Abdy’s contract.

But wait, what about all the places De Luca and Abdy are suppose to go?

For now, sources say they’ll take a beat, rest and re-calibrate. The two have no competing offers from other studios. Their intent, from what we’ve heard, is to remain partnered together, presiding over a full-bodied theatrical driven motion picture studio.

Rumors have swirled about their eyeing production jobs at Netflix and Sony. The two are social with other studio bosses in town, i.e. Tom Rothman at Sony and Ted Sarandos at Netflix. No talks for jobs were ever sought, rather vernacular chats about what it would be like to work in an anomaly situation of a combined studio.

Word out there has been that Netflix Film Chairman Dan Lin is on ice, and that De Luca and Abdy are coming in. Those rumors are currently not true we understand with Lin staying in place. While Netflix is dipping their toes in theatrical with longer windows, i.e. La Bola Negra, Kpop Demon Hunters 2 and Greta Gerwig’s Narnia and more, the streamer is still nascent in the theatrical business which is Abdy and De Luca’s area of expertise.

In regards to a transition to Sony for the duo, Rothman is still riding out 17 months on his current contract, and it wouldn’t be a shocker if the 71 year-old studio boss re-ups. He already has a team in place with Sony Pictures President Sanford Panitch.

There was buzz out there that Abdy met with Apple SVP Eddie Cue, and Apple TV chiefs Jamie Erlicht and Zack Van Amburg for jobs, however, we hear that’s not true, in addition to frosh burgeoning global streamer Mubi courting the duo.

What wouldn’t be a shocker is if De Luca and Abdy, who delivered 11 Oscar wins this year to Warner Bros, and a blockbuster 2025, start their own studio.

“Do you know how much tech money is out there right now? Mike and Pam would have no problem raising capital and starting their own venture given their track record,” said one source with knowledge of their situation.

Earlier this year there was a rumor that the duo were teaming with former Paramount Pictures CEO Brian Robbins to start a new studio. However, due to the duo’s contract, they were barred from raising funds to start their own venture should WBD merge. Robbins wound up with backing from Greycroft, Sony Pictures, MarcyPen Capital Partners, ValueAct Capital, and CAA to launch his family label Big Shot Pictures.

In the meantime, many in town are flabbergasted at how the filmmaker-friendly De Luca and Abdy’s exits were first reported in the press. Even before De Luca and Abdy, and this weekend’s box office upset, Digger, the Warner Bros has historically been known for audacious, box office-risky swings, i.e. Stanley Kubrick’s A Clockwork Orange and the director’s year-long shot Eyes Wide Shut, The Wachowski Siblings’ Jupiter Ascending and Speed Racer, Tony Gilroy’s Michael Clayton, The Assassination of Jesse James by the Coward Robert Ford, heck, even the Humphrey Bogart and Lauren Bacall movie, The Big Sleep.

There are ups and downs in the film business. Last year Warner Bros was at a high, and this year, not so much. However, Paramount is absorbing a potential $1 billion year-end tentpole in Legendary/Warner Bros’ Dune: Part Three, and a blockbuster 2027 shepherded by De Luca and Abdy that includes Legendary’s A Minecraft Movie Squared, Bradley Cooper’s directed and starring Ocean’s Prequel which also headlines Margot Robbie, The Lord of the Rings: The Hunt for Gollum, and Legendary’s Godzilla x Kong: Supernova.

The key to success for any studio boss in these days is to be backed by an entertainment conglom CEO through the good times, and the bad given the cyclical nature of the business.

The question remains that if De Luca and Abdy stayed, whether the cost efficiency Ellison would have abided by that.