Paramount closed its deal to acquire Warner Bros. Discovery on October 6. This gave the heir to a technology empire, David Ellison, control over a vast media empire that controls many of Hollywood’s most valuable projects. The New York Times reports, according to UNN.
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The deal immediately puts the combined company, now called Skydance, at the forefront of the streaming giants’ competitors, such as Netflix and YouTube, directly behind giants like Disney and Amazon.
"Today is a historic day not only for Skydance, but for our entire industry," Ellison said in a statement on Tuesday.
"We are incredibly excited to get to work," he added.
The new company is a hard-won prize, the publication notes. Ellison "snatched" Warner Bros. Discovery from rival bidder Netflix after a months-long tug-of-war that prompted him to make nine offers for the company. It was created despite objections from a coalition of state attorneys general, who sued to block the deal on antitrust grounds.
The lawsuit was ultimately settled after the attorneys general secured a series of concessions, including the creation of an editorial independence board to protect CNN’s integrity and Ellison’s pledge to spend an additional $1.5 billion on films over the next five years.
Hundreds of Hollywood insiders said the deal would sharply strengthen corporate power, leading to job losses and further stagnation in Hollywood. Skydance argued that the merger was a necessary counterweight to major technology companies.
David Ellison now controls:
- film studios: Paramount Pictures, Warner Bros., Skydance;
- streaming services: Paramount+, HBO Max, Pluto TV;
- news organizations: CBS News, CNN, TVN24 (one of Poland’s most popular news channels);
- cable networks: Comedy Central, Nickelodeon, TNT, TBS, HBO, MTV, Food Network;
- major franchises: DC Universe (including characters such as Batman, Superman, and Wonder Woman), the Wizarding World of Harry Potter (The Wizarding World of Harry Potter), “Star Trek” (“Star Trek”), “Mission: Impossible” (“Mission: Impossible”).
Now he just has to run it all, the publication notes.
The new company is making its debut in an industry undergoing profound changes. Cable television, one of media’s biggest "cash cows," is still profitable but is experiencing a terminal decline. Streaming has yet to replace those profits. Trust in the news business is low. And technology companies such as Amazon and Apple are entering the market for films, television shows, and sports rights, driving up content costs, the publication writes.
These challenges, it notes, will pose a serious test for 43-year-old Ellison, who until last year had never run a publicly traded media company. He and his team must convince Wall Street that the new company can handle these challenges while simultaneously paying down $82 billion in debt, an astonishing sum for a traditional media company. He must also unite tens of thousands of Warner Bros. and Paramount employees; both companies have experienced near-annual layoffs in recent years.
The situation, as noted, is further complicated by Ellison’s relationship with U.S. President Donald Trump, which has raised concerns among some CNN employees. This spring, Ellison hosted a dinner "honoring Trump’s White House" ahead of the annual White House Correspondents’ Association dinner, and later joined Trump at an Ultimate Fighting Championship bout at the White House (Paramount owns the media rights to the UFC).
Ellison allayed some of these concerns by keeping Mark Thompson, CNN’s chairman, in his position. In a memo to employees on Monday, Thompson said he had spoken with Ellison and was convinced that Skydance’s leadership would support "the independent news CNN has always stood for."
One of Ellison’s biggest challenges will be winning over Hollywood’s creative class in an era of declining box-office receipts, artificial intelligence, and algorithmic personalization. He has promised to invest in content, pledging to release at least 30 theatrical films annually. Within two years, that number will rise to 32 films. He has also promised to substantially overhaul the company’s technological capabilities.
But he must do all this while cutting $6 billion in costs this year over the next three years—a goal he will likely achieve, in part, by eliminating thousands of jobs, the publication writes.
Some of these cuts will likely result from combining parts of the company that have overlapping functions. CNN and CBS News are possible targets, as are some Paramount and Warner Bros. administrators. This process is already well underway: David Zaslav, the chief executive of Warner Bros. Discovery, has decided to step down from the deal, as has Cindy Holland, Paramount’s chief executive for streaming, the publication notes.