Paramount Pictures
What does the future hold now that Shari Redstone has signed a deal to sell her father's media empire to Skydance and RedBird Capital?
Reports of a planned merger between Skydance (tech magnate David Ellison's production company behind franchises like Mission: Impossible) and Paramount Global had been circulating for months during the dramatic deal (formally announced a few weeks ago). The official announcement late Sunday revealed what Paramount's new owners have in store.
First, and perhaps most importantly, Skydance is injecting $1.5 billion into Paramount's balance sheet, a cash infusion to help the studio attract creators with “stability,” as the official statement put it, and to allow brands like Paramount Pictures and CBS to better compete for top talent and packages.
The new Paramount, the working name for the combined company, “will be a premier, creative-first destination for storytellers dedicated to the highest quality content, positioned to improve profitability, foster stability and independence for creators and enable further investment in growth areas,” the announcement said.
The effort will be overseen by Chairman and CEO Ellison and former NBCUniversal CEO Jeff Shell. The pair, who are described as having “extensive operational experience and proven expertise in driving creative,” will formally take over the reins once the deal closes, expected by the middle of next year. Shell will return to the helm of the media division after being fired as CEO of NBCUniversal following an investigation into sexual harassment allegations and “inappropriate conduct.”
In the meantime, Paramount's interim CEOs, George Cheeks, Brian Robbins and Chris McCarthy, have vowed to continue their campaign to cut costs and sell assets.
At the same time, Ellison suggested that his traditional family business, Oracle, the technology giant run by his father Larry Ellison, would be heavily involved in a priority “focus on technological advancements across multiple entertainment platforms, including animation, games, movies, sports, news and television.”While it's unclear what technology he is referring to or how it will be applied, Hollywood is certainly at a tipping point regarding artificial intelligence and how it will change the future of content.
That's nothing but good news for Paramount+, the media company's upstart streaming service that has about 72 million subscribers after 10 years in business, compared with hundreds of millions of viewers for rival services like Netflix and Disney+.
Skydance has promised to bring to the table a “modernized infrastructure that offers scalability and ingenuity” that will include Paramount's direct-to-consumer platform, ad-supported streaming service Pluto and linear networks like MTV.
Jerry Cardinale, who runs the investment firm Redbird and is an investor in the new Paramount alongside the Ellison family, was perhaps most outspoken about what traditional media companies need to accomplish in the current climate.
“As one of Hollywood's leading media brands and libraries, Paramount has the intellectual property foundation to ensure permanence through this evolution. But navigating this next phase will require a new generation of visionary leadership and experienced operational management,” Cardinale said.
Skydance Paramount “will be the bellwether for how these existing legacy media businesses need to be operated in the future,” he concluded.
