Skydance Media chief David Ellison said an $8 billion investment by the company and its backers will enable Paramount Global to “double down on its core competency” and embrace technology.
Ellison, future Paramount President Jeff Shell and a handful of other stakeholders detailed their plans for the legacy media company during a call with investors this morning. Late Sunday, the takeover was confirmed by the companies, which had been in talks since late-2023. The deal marks a milestone for the Redstone family, which is exiting the media business after nearly four decades as a defining presence in the sector.
During the nearly hour-long call, Ellison and others laid out the vision for “New Paramount,” saying its credit would return to investment-grade status by 2026. They outlined some $2 billion in run-rate cost savings, the latest indication that more layoffs are likely in the offing. The three execs currently in the Office of the CEO at Paramount last month outlined a plan for $500 million cost savings independent of the Skydance transaction.
“We need to transition New Paramount to a world-class media and technology enterprise,” Ellison said. “The first thing we need to do is to double-down on the core competency of storytelling across mediums.”
After the formal announcement indicated the deal would close in the first half of 2025, execs said on the investor call that the close would likely be in the third quarter of next year. Because broadcast network CBS and local stations are part of the package, regulators will likely take a particularly close look.
Rather than shuttering Paramount+ as some investors and analysts have recommended, Ellison and his team plan to improve its technology and operate it in a similar form to what currently exists.
“We intend to be the technological leader in this space,” Shell said of streaming, “which is really the next frontier.”
Asked during a Q&A period with analysts about the notion of sticking with Paramount+, which has accumulated 71 million subscribers but continues to lose money, Ellison said it’s about meeting entertainment consumers where they are. “If you look at where the audience is heading towards,” he said, “streaming is an incredibly important part of the business and very much the future of the business. The way we intend to look at it is from a profitability standpoint and getting to profitability in streaming as efficiently as we can while also continuing to scale the company. To do that, you need to do two things: one, creatively execute at the highest level and, secondly, one of the things that I think has been potentially slightly underappreciated when you really get into the tech stack of some of these companies is how effective their algorithmic rec engines are in terms of creating time spent on platform.”
Along with RedBird Capital, the backers of the takeover include the Ellison family. David Ellison’s father, Larry Ellison, was not cited by name on the call but the billionaire Oracle founder seemed to be hovering over many of the tech comments.