According to industry reports, David Ellison is preparing to initiate substantial transformations at Paramount Global as he gears up to take the helm as CEO following the merger with Skydance Media next year. Key plans include substantial cuts at the company’s television networks, a significant investment in streaming, and a complete overhaul of top management.
Ellison’s vision involves consolidating Paramount’s television networks, including CBS and MTV, into one entity. Currently, these networks are overseen by co-CEOs Chris McCarthy and George Cheeks. While Cheeks is expected to remain with the company, McCarthy’s future is uncertain.
Brian Robbins, the third co-CEO overseeing Paramount Pictures and Nickelodeon, is anticipated to depart when the merger is finalized. Ellison and Robbins have collaborated on multiple projects, but it appears both have acknowledged that Robbins is unlikely to stay on post-merger, although no definitive decisions have been made as of yet.
There is speculation that Ellison may temporarily appoint Dana Goldberg, who currently leads production at Skydance, to oversee the film division. Representatives from both Paramount and Skydance have declined to comment on these developments.
Since the merger agreement in July, Ellison and his team have engaged with future Paramount staff to gather insights about the company’s operations. He has reassured employees that no firm decisions regarding personnel have been finalized.
It was clear to Ellison that a significant restructuring was necessary at Paramount. The company continues to generate most of its profits from traditional pay-TV networks like Nickelodeon and MTV. However, these channels have seen a sharp decline in viewership and advertising revenues, particularly due to competition from streaming giants such as Netflix and YouTube. Analysts predict that Paramount’s film division may not generate profits in 2024.
“The business needs to be transitioned,” Ellison stated shortly after announcing the merger.
As the logistics unfolded following Donald Trump’s election victory, Ellison’s team began accelerating preparations for the Paramount acquisition, expecting the deal’s completion by late March or early April. However, it is still subject to approval from the Federal Communications Commission, with opposition petitions due by December 16 and responses required by January 13, 2025.
Ellison’s immediate focus will be on the TV networks and streaming sectors. He aims to potentially reduce expenses by consolidating the company’s TV networks into one group and streamlining operations across programming and marketing departments. As a result, the volume of original programming produced will decrease, leading to staff reductions.
Ellison plans to merge the two areas reporting to McCarthy and Cheeks. While McCarthy was previously favoured by former CEO Bob Bakish, Cheeks maintains a strong relationship with Jeff Shell, who will serve as Ellison’s number two at Paramount.
In an investor presentation earlier this year, Ellison discussed his intention to streamline company operations without providing further details. Additionally, Paramount will explore strategic partnerships for its pay-TV networks, which could lead to divestitures of certain businesses. Although Ellison is not formally seeking to sell any networks except CBS, he remains open to considering the sale of nearly any network in the portfolio.
Real estate holdings will also face cuts as Ellison looks to sell properties such as the CBS Broadcast Center, which produces shows like “60 Minutes” and “Last Week Tonight with John Oliver,” and the iconic Ed Sullivan Theater, home to Stephen Colbert’s late-night program.
Ellison previously emphasized, “We’re not going to sell Paramount, we’re not going to sell CBS, but we’re looking to maximize value.”
Moreover, the merger has spurred discussions between Ellison, Paramount, and the NFL, which has a provision allowing it to exit its broadcasting agreement with CBS. Although the league has no immediate plans to enact this option, there have been conversations about possibly converting its joint venture stake with Skydance into equity in Paramount and discussing the potential sale of some or all of the NFL Network to Paramount.
The anticipated cuts in the television sector are designed to finance an increased investment in streaming initiatives, with Paramount+ already boasting 72 million subscribers.
