Late Sunday night, after the consortium led by David Ellison’s Skydance sealed the deal to ultimately gain control of Paramount Global, Ellison spoke with Shari Redstone, who controlled the company through her family’s National Amusements and ultimately made the call to sell the family business.
Redstone “was incredibly gracious and kind,” Ellison recalls.
The Skydance mogul spoke to reporters Monday, joined by Jeff Shell, who will be president of the new Paramount, as well as Gerry Cardinale, the founder of RedBird Capital, which backed the deal.
“What’s very important for Shari and her family is the protection of her family’s legacy,” Cardinale says. “And the way to do that is you recapitalize this over 100 year old business, and you keep it as Paramount, you don’t take it private, break it up, kill it. And so that’s what, from day one, that has been the fundamental crux of this entire deal, a real philosophical coming together with David and his family, with Shari and her family.”
“Our goal here is to transition the business as Paramount,” Ellison continues. “And that was something that me and Shari discussed early on, and believe that by keeping the assets together and transitioning them through this moment in time, we’ll obviously be able to create significant shareholder value.”
During an investor presentation, Ellison emphasized the need to make Paramount a talent-friendly place to create, and that stabilizing its balance sheet and installing fresh leadership will help with that.
“We we live in an environment that is so competitive,” Ellison says. “Our belief is that you can’t be a ‘B+’ anymore. You have to be an ‘A’ … I think when you create that culture of fostering creativity and setting a high bar, Our hope is that the most talented people in the world will want to call Paramount home.”
“I would just add that creators, like everybody else, want to be at a place that’s stable, right?” Shell adds. “And so I think all the financial things that we’re doing with the company, injection of cash, de-levering and everything, while they don’t directly affect the creative process that David was just talking about, they make somebody much more comfortable that this is going to be a stable place, that this is going to be a winner going forward, and people like to be part of a winner.”
“If you look at David and my text stream and email stream over the past, you know, kind of couple months, it feels like just about everybody’s reached out to us,” Shell continues. “Some people are hungry for Paramount to be a place that’s creator friendly again.”
The executives also detailed their plans for both CBS and Paramount+, with Shell noting that they will institute changes at the broadcaster when they take control, even as he framed the network as a “crown jewel” asset.
“I think if there’s going to be a change for CBS, it’s going to be that we’re going to probably manage it a bit more aggressively for cash flow, meaning making some harder decisions on time periods and things like that going forward, which you have to when you have a declining business,” Shell says. “But there’s really no change in the overall vision for the asset, other than we believe in it, it’s going to be actively part of all of our plans going forward.”
As for Paramount+, cash flow will also be king.
“Our strategy is to focus on cash flow. I think we can be a little bit smarter about how we license content, and window content to generate more cash flow from the content that we’re putting on, as opposed to just putting everything blindly on Paramount+,” Shell says, adding that doing so “will get us to cash break even more rapidly.”
“But I don’t think it has to be turned around necessarily,” he continues. “We just think we want to take a bit of a fresh approach to it.”
And Ellison made it clear that his team will allow the existing trio of Paramount CEOs to continue their talks about asset sales, streaming partnerships, or other matters.
“We obviously have a tremendous amount of confidence in management, but also we have — within all of the appropriate regulatory bounds obviously — a seat at the table in those decisions,” Ellison says. “But given how dynamically the landscape is changing, we think it’s really important that the company not be paralyzed in any way, shape or form, and obviously, for those conversations to continue and to explore and we will obviously be a part of the decisions that are made within all the appropriate guidelines.”