Will Paramount Skydance Merger Lead the Way for Struggling Media? : NPR

The Paramount logo is displayed at Columbia Square along Sunset Boulevard in Hollywood, California on March 9, 2023.

Patrick T. Fallon/AFP via Getty Images


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Patrick T. Fallon/AFP via Getty Images

There is probably no time when the media is as cheerful and optimistic as after a major deal is announced.

In the case of the $8.4 billion deal that would bring new owners to Paramount Global, many hopes and dreams are pinning on new CEO David Ellison and how he might reshape a media company that includes everything from Paramount Studios and the CBS broadcast network to cable channels like MTV and BET and the streaming service Paramount+.

Film fans dream that if the new company moves forward, it can preserve Paramount as an independent brand and combine Ellison's Skydance Media with a respected film studio that's been around for more than 112 years and is based in downtown Los Angeles (they also hope this means the company won't be sold off largely in pieces or gobbled up by another major company, like Sony).

Media insiders are wondering whether Ellison — backed by $6 billion from his family, including his father and Oracle co-founder Larry Ellison — can harness new technologies and Silicon Valley sensibilities to make the company more successful.

And astute observers of America’s power are hoping that nepo baby-turned-mogul David Ellison will serve his family and the company better than previous owner (and fellow nepo baby) Shari Redstone, who inherited Paramount’s parent company, National Amusements, after the death of her father, Sumner Redstone, in 2020 and subsequently watched the company lose billions of dollars in value amid a changing media landscape, uncertain leadership and fraught sale negotiations.

Yes, this may sound like a bunch of media-nerd nonsense—navel-gazing from an industry notorious for its self-obsession and myopic focus. But a successful rescue of Paramount could also point the way to a bright future for an increasingly uncertain media industry, where profits, product, and audiences are harder to come by. And failure could mean that the company that's home to NCIS, Star TrekMTV and Yellowstone could disappear into media history.

To succeed, Ellison and his backers will have to answer a lot of pressing questions. Here are the ones that come to mind the most:

Can new owners really get a company based on media companies currently in a serious downturn back on track?

One of Paramount Global’s biggest challenges is that it’s a media company with multiple businesses all struggling at once. Cable channels hobbled by cord-cutting. A streaming service that’s not expected to turn a profit until sometime next year. A broadcast network with an older audience. A regional theater chain struggling with declining moviegoing. And, as the global financial services company Moody's noted In a recent statement, Paramount is merging with a smaller media company that does not own or control much intellectual property itself: Skydance Media.

Ellison and Jeff Shell, the former NBCUniversal CEO who would become president of the new company if the deal closes, offered some of their thoughts in a call with Wall Street analysts Monday morning, saying Paramount+ would likely succeed as part of an “ultimate bundle” of streaming services, with plans to completely rebuild the platform’s technology. As for their more traditional businesses, such as cable channels, they talked about managing the decline while slashing costs by $2 billion.

But I think mid-market streaming services are struggling because they’re struggling to offer enough content to convince customers that they should be prioritized above or alongside big players like Netflix and Disney+. Will redesigning the platform and sticking it in a bundle alongside bigger players really help differentiate their business?

How will the company be run until the deal closes… in 2025?

The purchase is not expected to close until sometime next year. Until then, Paramount Global will likely continue to be run by the group of three co-CEOs that currently run the company. That means a plan could still be implemented that would involve the CEOs announced last monthwhich saved $500 million in costs while exploring the sale of some assets. Black culture-focused cable channel BET has long been the subject of speculation that it could be sold to a mogul like Tyler Perry or Weather Channel owner Byron Allen, for example.

Producer David Ellison attends the Royal Film Performance and UK premiere of

Producer David Ellison attends the Royal Film Performance and UK premiere of “Top Gun: Maverick” at Leicester Square on May 19, 2022 in London, England.

Eamonn M. McCormack/Getty Images for Paramount Pictures


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Eamonn M. McCormack/Getty Images for Paramount Pictures

Last month, online archives for MTV News, CMT News and Comedy Centralfilled with decades of pop and country music journalism, were pulled by the company without warning or explanation. Will more surprise cuts emerge in the coming months that reduce or eliminate content?

In a strange way, it might make sense for Paramount to make painful cuts now, before the new owners are officially in charge. That way, Ellison, Shell and their teams can take over without the need for layoffs or major cutbacks.

If Ellison and Co. take over, it will mark the beginning of yet another Hollywood studio dominated by Silicon Valley money, including Amazon’s acquisition of MGM and the rise of major players like Apple TV+ and Netflix. Which raises another big question: Will Paramount Global harness the resources and innovation of the tech world to reinvent a major studio for the modern media moment, or have the forces holding it back gone too far?

Will anything else happen that could undo the deal?

Federal regulators must weigh in. And there is a 45-day period in which Paramount's board of directors could make another offer (although they would have to pay the Skydance group $400 million.) Shareholders outside the Redstone family who feel aggrieved could also file a lawsuit.

But in the rosy glow of a just-announced deal, all of these challenges seem like rapidly fading images in the rearview mirror. A new think tank has emerged to prove that a medium-sized media company can survive in the modern age, as the daughter of one corporate titan hands over the reins of her complicated business to the son of another.

Whether all of this will lead to a solution that can save Paramount while simultaneously solving the problems of modern media on a larger scale is perhaps the biggest question of all.

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