David Ellison, who will lead the New Paramount, said his goal is to expand the company into a media and technology hybrid that will be able to meet the needs of the evolving marketplace.
Ellison’s Skydance Media, along with Redbird Capital, formally announced their $8 billion plan to acquire legacy media company Paramount Global on Monday.
An earlier, similar deal was pronounced dead by Shari Redstone, the daughter of Sumner Redstone, the media mogul who assembled Paramount. The Redstone family’s National Amusements, is selling its controlling stake in the company.
Ellison is calling the combination of Skydance and Paramount “New Paramount.” He said that was more than a catchphrase.
“We think its going to be a new day for this company,” Ellison said during a conference call with analysts Monday morning. “The deal will strengthen the balance sheet, enhance free cash flow and align voting and economic interests.”
The deal will also unify intellectual property held by both companies — including the Top Gun and Mission Impossible franchises — and add to Paramount Skydance’s interactive and gaming business; its sports production business, which works with the NFL (also a major partner of Paramount’s CBS Sports); and its animation studio, which had a deal with Netflix.
Financially, the new company expects to be able to reduce costs by $2 billion annually once the deal closes, which the company said is expected to occur in the third quarter of 2025. (First there will be a 45 day Go Shop period during which Paramount will entertain other bids.)
Skydance also produces video games based on The Walt Disney Co.’s Star Wars and Marvel franchises. Skydance’s interactive prowess should enhance Paramount franchises.
Participating in the call was Jeff Shell, the former NBCUniversal CEO, who will be CEO of the New Paramount.
“It’s been a long time since a creative executive ran one of the big Hollywood companies,” Shell said of Ellison, son of Larry Ellison, the billionaire founder of technology company Oracle.
“If you went into a lab and designed the perfect executive for the next generation Hollywood company, you would literally spit out David Ellison, because he can not only go to a table read, but he can go into the next room and code,” Shell said. “This business is heading towards a technology-media hybrid and David’s perfect.”
Also on the call were the three members of Paramount Global’s office of the CEO: Chris McCarthy, George Cheeks and Brian Robbins. The three executives are expected to continue to run the company and implement their already announced $500 million cos-reduction plan, a possible international streaming joint venture and potential asset sales.
Ellison said that the key principles he planned to follow were: “Quality is the the best plan, creatively”; “Aim high and never stop working till you get there”; to be where entertainment is heading, rather than where it’s been; and “the only way to accomplish this incredibly ambition goals is to bet on people.”
Paramount’s business has been hurt as its cable channels have lost subscribers and revenue due to cord cutting and CBS has lost viewers and advertising as streaming has taken hold.
“Obviously a big chunk of the company is in the linear world and we know that linear is challenged and declining,” Shell said.
But he said Paramount still likes those businesses and plans to run them in a different way.
“We’ve spent a lot of the last few months really building a bottom-up plan and our goal is to manage the businesses, particularly the linear businesses, for cash-flow generation,” Shell said. “You have to make tough decisions, so we’ve identified what we want to do and we plan to do this fairly rapidly.”
He called CBS an unmatched asset with amazing reach. “We will continue to fuel that reach and we’re really happy about not just CBS, but the whole ecosystem of stations and affiliates . . . because it will drive our content for decades in front of us.”
He said the new Paramount will take a “fresh approach” to cable brands like MTV, Comedy Central and Nickelodeon that will involve a cross-platform strategy.
More production for movies and television will be done in the cloud, with artificial intelligence tools that will enhance creativity, improve efficiency and lower costs.
In terms of streaming, Skydance expects to be able to upgrade Paramount Plus' technology platform with better algorithmic recommendations that will produce more viewing hours and less churn, as well increased monetization via advertising.
He said Paramount will look at what content it should licence to other platforms and what it should keep for itself, using windowing to maximize the value of content.
Paramount has received inbound interest from parties wanting to have Paramount Plus as a partner, and those will be considered. But the goal is for Paramount Plus to be part of an “ultimate bundle” that will eventually emerge, making streaming look more like cable, Shell said.
“We want to make this company the leader in entertainment, and that goes for DTC," he said.
