Skydance boss David Ellison and scandal-plagued media executive Jeff Shell have hinted at massive cost-cutting measures at Paramount Global as the two companies merge.
Ellison, the son of tech mogul Larry Ellison, whose Hollywood production company produced “Top Gun: Maverick” and “Mission: Impossible: Dead Reckoning,” said Monday that he expects Paramount to make more than $2 billion in cuts, mostly in its linear media business.
This comes after the co-CEOs of CBS and Paramount Pictures, which owns cable networks Comedy Central, Nickelodeon and MTV, unveiled a $500 million cost-cutting plan last month.
Paramount Global. Getty Images, CinemaCon
Ellison said he aims to prioritize creativity and strengthen technology, including improving the search algorithm for his Paramount+ streaming service.
“Paramount needs to expand into technology hybrids to meet evolving market needs and demands,” Ellison said on a conference call with investors on Monday.
Paramount shares fell 3% following the news in trading on Monday.
“This is the new Paramount. It’s not just a tagline,” echoed Shell, the former CEO of NBCUniversal who was fired last year after admitting to an inappropriate relationship with former CNBC anchor Hadley Gamble, who was 16 years his junior.
Shortly after the scandal, Shell, 58, joined Redbird Capital Partners, the firm that backed Skydance in its purchase of Paramount. He will become president of Paramount when the deal closes in the third quarter of 2025. Ellison will become chairman and CEO.
Ellison did not provide details about how the company would run, but Paramount is expected to undergo another reshuffle and leave the future of its co-chief executives, George Cheeks, Brian Robbins and Chris McCarthy, uncertain.
Some media watchers expect Redbird IMI CEO Jeff Zucker and Skydance creative chief Dana Goldberg to both take on leadership roles.
The Washington Post earlier this year speculated about the return of both Mr. Shell and Mr. Zucker, the disgraced former CNN chief who was forced out of the cable news network in 2022 for failing to disclose an affair with another senior executive.
On a conference call on Monday, Shell called the 41-year-old Ellison “the consummate executive” and praised his media and technology skills.
“If you went into a lab and tried to groom an entertainment executive to be the future of the industry, you would literally spit out David Ellison,” Shell said of Ellison.
A company executive said Ellison’s creative and technological savvy means he can not only “read from a script,” but “also go into the next room and write code.”
“It’s been a long time since we’ve had creative executives running major companies,” he added.
A seemingly humble Mr. Ellison thanked Mr. Shell for the compliment, then casually mentioned that he had been mentored by his father’s close friend, Apple co-founder Steve Jobs.
Ellison said he wants to make Paramount+, the company’s all-in-one streaming service, profitable, and said a two-pronged approach of strengthening creative output and “fixing” search algorithms is “essential” to the company’s future.
“We want to rebuild our platform to sell directly to consumers,” he added.
The executive said the company is considering partnering or licensing content for Paramount+, which continues to lose money.
Shell also addressed the challenges of its cable-TV business, which continues to lose subscribers as consumers cut their cords. To stem the exodus from Paramount’s many networks, Shell said it had found $2 billion in cost synergies.
“We know what we want to do,” he said, adding that the CBS partnership with the NFL is a boon for the company, one it hopes to leverage in the same way it does with the network’s various franchises such as “NCIS,” “60 Minutes” and “Yellowstone.”
At the same time, the two companies have not ruled out a sale of the assets: Paramount is currently in exclusive talks to sell BET to CC Capital, led by BET CEO Scott Mills and Ching Chu, for $1.7 billion.
Skydance and Paramount merger. Getty Images
Skydance’s deal caps months of negotiations with media heiress Shari Redstone, whose late father, Sumner Redstone, founded Paramount Global, which was formed in 2019 from the merger of CBS and Viacom.
“In 1987, my father, Sumner Redstone, bought Viacom and began assembling and growing what is now known as Paramount Global. His vision was that ‘content is king.'”
She added: “We want to strengthen Paramount’s future while ensuring that content remains king, and we hope that our transaction with Skydance will position Paramount for continued success in this rapidly changing environment.”
Paramount’s special committee agreed to the merger on Sunday, days after Paramount controlling shareholder Shari Redstone’s National Amusements reached a tentative agreement with Skydance, a deal that had been called off weeks earlier.
In the latest deal, a consortium including Redbird and KKR will invest more than $8 billion in Paramount to acquire National Amusements, valuing the company at $2.4 billion, with $1.75 billion of that coming from stock.
The merger is subject to regulatory approval, including a 45-day “go-shop period” during which Paramount’s special committee can solicit other proposals.
Other interested bidders have emerged in recent weeks, including media mogul Barry Diller.
