David Ellison's Paramount plan: Lights … Camera … Spend!

by Brooks Barnes, The New York Times

David Ellison’s spending spree in Hollywood is starting to make Netflix’s industry-rocking largess look Lilliputian.

It has been 37 days since David Ellison (42) took over Paramount Global as part of an $8 billion merger that combined his company, Skydance Media, with a beaten-up collection of old-media assets — MTV, the Paramount movie studio, CBS — and two streaming services.

In that short amount of time, he has certainly made two things clear: He is moving fast, and he has access to a seemingly endless supply of his father's cash.

Consider this: David Ellison outbid Netflix for a seven-year, $7.7 billion deal to claim exclusive streaming and broadcast rights in the United States for the Ultimate Fighting Championship.

He poached the Stranger Things creators from Netflix with the promise of theatrical releases for future film projects.

He shored up the rights to South Park for the next five years with a deal worth at least $1.25 billion that includes 50 new episodes of the provocative series.

He's planning a Street Fighter movie with Legendary Entertainment; a Call of Duty movie with Activision; many movies with Will Smith; and, in a deal that puts Timothée Chalamet into the salary stratosphere with a $25 million payday, an action heist movie that will reunite the actor with James Mangold, the director of the Bob Dylan movie A Complete Unknown.

Paramount will expand its slate to as many as 20 films a year, up from eight. David Ellison is also in final talks to buy The Free Press, an online media start-up that was founded as a rebuke to traditional news organisations, for a price that is expected to exceed $100 million.

And now he’s preparing a mostly cash bid for Warner Bros. Discovery, which owns HBO, CNN and the Warner Bros. movie and television studio, according to several people with knowledge of the plans.

The company is worth $41 billion and has $35 billion in debt, remnants of the 2022 merger that brought it to life. 

Should a deal come to fruition — and the challenges are colossal — it would be a transaction on a par with Disney’s $71.3 billion purchase of 21st Century Fox assets in 2019, a merger that reshaped the global entertainment business.

David Ellison primarily wants Warner Bros. Discovery for its studio, which is loaded with healthy intellectual property (unlike Paramount), and for its HBO Max streaming service, which expects to have 150 million subscribers worldwide by next year. Paramount’s flagship streaming service has about 78 million. HBO also brings considerable prestige.

Regardless of what transpires with Warner Bros., David Ellison's shopping spree already represents the biggest scene change in Hollywood since 2013, when Netflix began showering writers, actors, producers and directors with money in an attempt to dominate streaming.

A little more than a month ago, Hollywood’s creative community was in full meltdown mode. The box office is dying! Studios aren’t spending! Because of tax incentives available elsewhere, Los Angeles has become a ghost town!

And now! Those worries (and others) certainly haven't gone away, but there is a noticeable shift in mood: Finally, mercifully, someone wants to invest in us again.

"It's not just that David Ellison is spending," Lorenzo di Bonaventura, a respected producer and former studio executive, said in a phone interview.

"It's that he wants to do cool stuff. That sounds very basic, but underneath it all 'making cool stuff' is the Hollywood dream. And to have that in the head of a company — someone who is excited about movies, who believes in movies — is lacking in the Hollywood of today in a huge way."

He added, "It's an exciting moment, and it has come on fast."

Tony Tunnell, whose Safehouse Pictures produced the recent Paramount comedy Novocaine, was also upbeat, albeit a bit more cautiously.

"There has been so much news about a constricting business and cutbacks that it's been nice to have a sudden injection of energy and optimism, especially under the umbrella of a legacy studio," Tony Tunnell said.

Paramount Skydance and David Ellison declined to comment for this article.

When Netflix opened its cash spigots for deals with writer-producers like Shonda Rhimes and Ryan Murphy, vast swaths of Hollywood's creative community scrambled to partake. 

A similar scrum is forming around David Ellison and his team — notably Cindy Holland, who spent 18 years at Netflix and played a crucial role in turning it into a juggernaut. David Ellison hired her as his streaming content czarina.

Some familiar criticisms of Hollywood have started to swirl around David Ellison.

Senior executives at competing Hollywood companies use words like "reckless" in conversations about some of his early moves, in particular his potential bid for Warner Bros. 

Some people in Hollywood recoiled at the news of David Ellison's interest in Warner Bros., noting that additional consolidation would mean fewer jobs and one less stand-alone old-line studio — the sad end of an era. 

Warner Bros. in many ways epitomises the romance of Hollywood; the studio is the ancestral home of Bette Davis, Casablanca and Clint Eastwood.

As it is, David Ellison plans to tear through Paramount Global’s already decimated divisions to find more than $2 billion in "cost efficiencies and synergies".

Layoffs of around 2 000 people are expected, keeping employees on edge.

There is also snark about David Ellison's financing. A lot of the money comes from his father, Larry Ellison, a co-founder of Oracle and one of the richest men in the world, with an estimated net worth of $363 billion, according to Bloomberg.

(Larry Ellison's fortune increased more than $100 billion in a single day this week, prompted by Oracle’s earnings.) 

One senior executive at a competing studio on Thursday likened a Warner Bros. bid to a dad allowing his son to add new tires and rims to a fancy car he just bought him.

"The kid spends big to get in the picture," the chief executive of another entertainment company said with dry derision. 

The comment was a riff on The Kid Stays in the Picture, the memoir of Robert Evans, who ran Paramount in the 1960s and early ’70s.

Netflix was called reckless, which it didn’t like, and a disrupter, which it did. 

But the company’s bold strategy worked: The television shows and films it bought turned the company into an unrivalled force in the streaming business, compelling everyone else, including Disney, Warner Bros., Paramount, Amazon and Apple to invest billions to compete with it.

David Ellison appears to be following the same playbook.

"It's great seeing the energy David is bringing to Paramount," Gigi Pritzker, a producer of films like Nonnas, a recent hit on Netflix, wrote in a text message. "Thumbs up to having him invest in our business!".

ALSO READ: Paramount says looming retrenchments will be 'painful'; will no longer sell BET but pivot pay-TV channels to streaming

New Paramount Global owner David Ellison plans to cut content of its pay-TV channels and staff

by Lucas Shaw and Thomas Buckley, Bloomberg

David Ellison plans sweeping changes at Paramount Global, including cuts at the company's TV networks, billions of dollars more for streaming and an overhaul of top management, according to people familiar with his plans.

David Ellison who will take over as chief executive officer of Paramount when it merges withhis Skydance Media next year, is exploring combining all of Paramount's TV networks, including CBS and MTV, into one unit.

Those businesses are mostly run by two of the company's co-CEOs, Chris McCarthy and George Cheeks. While Cheeks is expected to stay, McCarthy's future is less certain.

The company’s third co-CEO, Brian Robbins, who leads the Paramount Pictures film studio and the Nickelodeon (DStv 305) kids channel, is expected to leave around the close of the deal, said the people, who asked to not be identified discussing plans that are still being formed.

A movie fanatic who has co-financed most of Paramount's biggest films of the last decade, David Ellison was initially interested in the company's namesake movie studio.

While David Ellison and Robbins have worked together on several titles, they are said to have both conceded it's unlikely Robbins will stick around. No final decision has been made, however.

David Ellison has discussed putting Dana Goldberg, the head of production at Skydance, in charge of the film business, at least for the time being. Spokespeople for Paramount and Skydance declined to comment.

Since agreeing to merge Skydance with Paramount in July, Ellison and his deputies have been meeting with their future employees, seeking opinions about what is working and what isn't. David Ellison told employees at Paramount that he hasn't made any decisions about personnel.

David Ellison agreed to the deal knowing Paramount would require a major overhaul.

The company still makes almost all its profit from pay-TV networks such as Nickelodeon, MTV (DStv 130) and Comedy Central (DStv 122) that defined an era in pop culture. 

But those networks have hemorrhaged viewers and advertisers to technology companies such as Netflix and YouTube. The company's namesake film studio isn't expected to show a profit for 2024, according to analystss estimates.

"The business needs to be transitioned," David Ellison told Bloomberg shortly after the deal was announced.

When Donald Trump won the presidential election, David Ellison and the team at Skydance began preparing to take over Paramount even sooner than they once thought. They now believe the deal could close as soon as the end of March or early April.

The Federal Communications Commission, which approves the transfer of broadcast licenses, still must bless the deal. Petitions from those opposing the transaction are due 16 December, according to the commission. Final responses from the parties are due 13January 2025.

Two areas requiring David Ellison's immediate attention are TV networks and streaming.

David Ellison is looking at potentially cutting hundreds of millions of dollars in costs by folding the company's TV networks into one group, consolidating teams across departments like programming and marketing. The amount of original programming produced for the cable networks will decline, as will the staffing.

David Ellison will combine two groups, one that currently reports into McCarthy and another into Cheeks. While McCarthy was a favored son of former CEO Bob Bakish, Cheeks has a good relationship with Jeff Shell, who will serve as Ellison's number 2 at Paramount. Cheeks and Shell worked together at NBCUniversal.

David Ellison stated plans to streamline the company's operations in an investor presentation earlier this year, without getting into specifics.

Paramount will also explore strategic partnerships involving pay-TV networks that could result in a divestiture of some of those businesses. 

While David Ellison may not formally explore the sale of any of these networks, as was done under the previous regime, he is open to selling almost any network in the portfolio other than CBS.

David Ellison plans to cut back on the company's real estate holdings and will look to sell facilities like the CBS Broadcast Center, a production facility used for 60 Minutes and Last Week Tonight with John Oliver. CBS also owns the Ed Sullivan Theater, the home of Stephen Colbert's late-night show.

"We're not going to sell Paramount, we're not going to sell CBS, but we're looking to maximize value," David Ellison previously told Bloomberg.

The transaction has already led to negotiations between David Ellison, Paramount and the NFL.

The league is able to opt out of its broadcasting agreement with CBS as part of a provision in its contract. While the NFL doesn't plan to do so, it has talked to Ellison about turning some of its stake in a joint venture with Skydance into an equity stake in Paramount.

It has also discussed selling some or all of the NFL Network to Paramount.

The cuts in TV will help pay for a greater investment in streaming.

Paramount+ has grown to 72 million customers and has made money two quarters in a row. Yet it ranks last in viewership among mass-market services and is still much smaller than competitors such as Netflix, The Walt Disney Company and Amazon. 

Cindy Holland, who's serving as an adviser to Skydance, is consulting on the streaming strategy and is seen by many at Paramount as the person likely to take over that business.

David Ellison is particularly concerned with the poor user experience in the app and has talked about making it easier for viewers to find shows to watch by improving the recommendation algorithm.

David Ellison, the son of Oracle Corp. co-founder Larry Ellison, grew up around technology luminaries such as Apple Inc. co-founder Steve Jobs. He speaks often about marrying technology and art at Paramount, and more quotidian changes like improving Paramount's use of enterprise software.

David Ellison will also more closely integrate Pluto, a free streaming service, into Paramount+.

A free service like Pluto can serve as an on-ramp for viewers to use Paramount+ more often while also benefiting from the marketing around Paramount+ programmes. 

Paramount+ is one of three services, alongside Peacock and Max, that are seen as too small to survive independently.

Paramount's current leaders have talked to both Peacock and Max about strategic partnerships to leverage their shared resources. The company has also spoken to Amazon and foreign streaming services.

While Paramount will continue to pursue those deals, Ellison sees less urgency to do so. He believes the company has a solid foundation upon which it can build.

Paramount is much smaller than most of its competitors, even those struggling like Warner Bros. Discovery.

But, after this transaction, it will have a healthier balance sheet. And, unlike most of these other companies, it will have access to the bank account of the Ellison family. While David oversees Paramount day-to-day, his father - one of the world's richest men - financed much of the transaction.

Skydance Media to buy Paramount Global.

by Thinus Ferreira

Skydance Media of David Ellison, the son of Oracle founder Larry Ellison, has clinched a deal to buy Paramount Global with David Ellison who will become chairman and CEO while the former NBCUniversal CEO Jeff Shell will become Paramount Global president.

Jeff Shell abruptly left NBCUniversal last year when his inappropriate relationship with a female staffer was revealed. 

The "New Paramount" and Skydance merger deal is subject to American regulatory approval which will take several months to complete, with the deal expected to close in the first half of 2025.

Paramount Global has divisions like CBS, Paramount Pictures, the streaming service Paramount+ and TV channels ranging from BET, MTV, Comedy Central and Nickelodeon. 

It includes regional offices around the world like Paramount Africa with offices in South Africa and Nigeria running regionalised versions of its linear TV channels that carries localised  African content.

In a statement, Shari Redstone says "In 1987, my father, Sumner Redstone, acquired Viacom and began assembling and growing the businesses today known as Paramount Global. He had a vision that 'content was king' and was always committed to delivering great content for all audiences around the world".

"That vision has remained at the core of Paramount's success and our accomplishments are a direct result of the incredibly talented, creative, and dedicated individuals who work at the company. Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king."

"Our hope is that the Skydance transaction will enable Paramount's continued success in this rapidly changing environment. As a longtime production partner to Paramount, Skydance knows Paramount well and has a clear strategic vision and the resources to take it to its next stage of growth. We believe in Paramount and we always will."

David Ellison in the statement says "This is a defining and transformative time for our industry and the storytellers, content creators and financial stakeholders who are invested in the Paramount legacy and the longevity of the entertainment economy."

"I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount. We are committed to energizing the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come."