What’s Next for Paramount? Skydance’s Bold Gamble to Revive a Hollywood Giant
David Ellison’s ambition to acquire Paramount Global began last winter, echoing the intense M&A battles of the past. Nearly three decades after Sumner Redstone and Barry Diller’s high-stakes struggle for Hollywood’s iconic studio, Ellison’s Skydance Media, along with Gerry Cardinale’s RedBird Capital, is poised to reshape Paramount, CBS, and more. After months of negotiations and numerous headlines forecasting this development, Paramount Global and Skydance Media officially announced their merger on Monday. The agreement enables Skydance to acquire National Amusements, which holds a controlling stake in Paramount.
A pressing question now on everyone’s mind is: What will become of Paramount?
The new leadership, featuring Ellison as chairman-CEO and former NBCUniversal CEO Jeff Shell as president, has started addressing this question. In discussions with analysts and reporters following the sale agreement on July 7, Ellison, 41, drew parallels between the media industry’s current phase and tech sector transformations seen at companies like Microsoft and Oracle. “We view this time period as being pretty similar to some of the transitions that some of the traditional tech companies went through, where they disrupted their own businesses [only to later] have all-time highs” he said. “And that’s very much how we’re looking at this particular moment in traditional media. It’s going to be that confluence of art, first and foremost, working hand in hand with technology, that is going to enable Paramount to transition to its brightest days ahead”.
Ellison’s success hinges on revitalizing Paramount’s fortunes where others have faltered. Since founding Skydance Media, he has expanded into TV, video games, and animation, but now he faces the monumental task of managing legacy media challenges. With the media industry contending with audience fragmentation and fluctuating ad revenues, many have failed to outperform traditional media. Candle Media, for example, has struggled with debt despite acquiring high-profile assets like Reese Witherspoon’s Hello Sunshine.
Ellison’s plan involves merging Skydance’s innovative content with Paramount’s existing operations. Although specifics remain under wraps, the initial steps include cost reductions, revamping Paramount+, and potential asset sales. The deal will undergo extensive regulatory review, with a 45-day period for other offers. “It ain’t over till it’s over,” notes Mario Gabelli, a major Paramount shareholder, though he is optimistic about Ellison’s approach.
Ellison emphasizes enhancing Paramount’s digital capabilities amidst a growing tech-media convergence. “There are a lot of technology companies that are rapidly expanding into media companies, and we believe it is essential for Paramount to be able to expand its technological prowess,” he said. Skydance’s strategy includes integrating its animation expertise with Nickelodeon and leveraging sports documentaries for CBS Sports. Shell anticipates significant cost reductions, particularly in linear TV operations. “We’re going to probably manage it a bit more aggressively for cash flow, meaning making some harder decisions on time periods … which you have to do when you have a declining business” Shell stated.
As Skydance prepares for this ambitious journey, the entertainment industry’s treacherous terrain remains a challenge.
SOURCE Variety
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David Ellison’s ambition to acquire Paramount Global began last winter, echoing the intense M&A battles of the past. Nearly three decades after Sumner Redstone and Barry Diller’s high-stakes struggle for Hollywood’s iconic studio, Ellison’s Skydance Media, along with Gerry Cardinale’s RedBird Capital, is poised to reshape Paramount, CBS, and more. After months of negotiations and numerous headlines forecasting this development, Paramount Global and Skydance Media officially announced their merger on Monday. The agreement enables Skydance to acquire National Amusements, which holds a controlling stake in Paramount.
A pressing question now on everyone’s mind is: What will become of Paramount?
The new leadership, featuring Ellison as chairman-CEO and former NBCUniversal CEO Jeff Shell as president, has started addressing this question. In discussions with analysts and reporters following the sale agreement on July 7, Ellison, 41, drew parallels between the media industry’s current phase and tech sector transformations seen at companies like Microsoft and Oracle. “We view this time period as being pretty similar to some of the transitions that some of the traditional tech companies went through, where they disrupted their own businesses [only to later] have all-time highs” he said. “And that’s very much how we’re looking at this particular moment in traditional media. It’s going to be that confluence of art, first and foremost, working hand in hand with technology, that is going to enable Paramount to transition to its brightest days ahead”.
Ellison’s success hinges on revitalizing Paramount’s fortunes where others have faltered. Since founding Skydance Media, he has expanded into TV, video games, and animation, but now he faces the monumental task of managing legacy media challenges. With the media industry contending with audience fragmentation and fluctuating ad revenues, many have failed to outperform traditional media. Candle Media, for example, has struggled with debt despite acquiring high-profile assets like Reese Witherspoon’s Hello Sunshine.
Ellison’s plan involves merging Skydance’s innovative content with Paramount’s existing operations. Although specifics remain under wraps, the initial steps include cost reductions, revamping Paramount+, and potential asset sales. The deal will undergo extensive regulatory review, with a 45-day period for other offers. “It ain’t over till it’s over,” notes Mario Gabelli, a major Paramount shareholder, though he is optimistic about Ellison’s approach.
Ellison emphasizes enhancing Paramount’s digital capabilities amidst a growing tech-media convergence. “There are a lot of technology companies that are rapidly expanding into media companies, and we believe it is essential for Paramount to be able to expand its technological prowess,” he said. Skydance’s strategy includes integrating its animation expertise with Nickelodeon and leveraging sports documentaries for CBS Sports. Shell anticipates significant cost reductions, particularly in linear TV operations. “We’re going to probably manage it a bit more aggressively for cash flow, meaning making some harder decisions on time periods … which you have to do when you have a declining business” Shell stated.
As Skydance prepares for this ambitious journey, the entertainment industry’s treacherous terrain remains a challenge.
SOURCE Variety
Share:
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