The long-running saga over the sale of Paramount has finally come to an end, but the real work may have just begun.
Paramount Global announced Monday an agreement to merge with Skydance Media, the production company behind films such as Top Gun: Maverick And Mission Impossible – Dead ReckoningUnder the deal, Skydance will buy National Amusements from Shari Redstone for $2.4 billion in cash, then merge the company with Paramount Global, giving Paramount $1.5 billion in cash and offering shareholders $4.5 billion in cash or stock.
Skydance’s David Ellison will take over as CEO and former NBCUniversal CEO Jeff Shell will take over as chairman. The two are already planning moves that will mean major changes at Paramount, including making it a subsidiary. Media and Technology CompanyHere’s a look at what they have in store.
Cut costs
Skydance has already identified $2 billion in cost cuts that Paramount needs to make, cuts it says can be made “quickly.” Most of those cuts will come from Paramount’s stakes in linear television (which consists of channels viewed via satellite or cable TV).
“Crude oil is going to continue to decline,” Shell said on a call with investors on Monday. “We don’t think it’s going to get worse, but we don’t think it’s going to get better either.”
The austerity may be painful, but it’s not surprising. The company’s previous three-person management team had already discussed the need to cut costs. Ellison and Shell haven’t specified exactly how they plan to make those cuts.
Merge sections
However, Ellison already had plans to begin integrating the companies. On that media call, he discussed adding Skydance content to Paramount’s library. That would include integrating Skydance’s animation business (which luck On Apple TV+ and coming soon fascinated (on Netflix) with Paramount’s Nickelodeon.
He also discussed merging CBS Sports with the sports documentary division of Skydance, which is behind HBO. strong hits A 10-part Netflix series and documentary focusing on Dallas Cowboys owner Jerry Jones.
Trimming cable units
Paramount Global owns an impressive number of media properties, including nearly 20 CBS stations and cable channels including BET, MTV, CMT, Comedy Central, TV Land, Logo TV, Smithsonian Channel, Pop TV, Nickelodeon and Showtime (along with many additional channels in international markets).
Some of these networks are doing well. But others have few original programming lines and are struggling in a rapidly evolving cable landscape. At that point, some of these networks could be sold or shut down, depending on the plans of the new management team. Schell has indicated that he is willing to sell some assets.
“There are assets here that we think are not strategic to where we are going, and if we can convince a buyer to pay a price that we think is compelling, we will certainly do that,” Shell said. “And we know that the current administration is also talking about a couple of transactions, if they get the right price, we will be supportive of them.”
Renewed focus on sport
While Netflix, Apple, Amazon and other streaming services have begun investing in live sports, Skydance acknowledged that the area is very important to the new Paramount. On the call, Schell hinted that the new owners will look to bolster CBS’s sports portfolio. Currently, that includes the NFL, the Masters golf tournament and part of March Madness.
He added that the new Paramount company “will likely be a buyer, not a seller” of sports rights, adding that “sports is the core of our business.”
Streaming packages
There are a growing number of streaming bundles these days, and Paramount+ is reportedly in talks with both Peacock and Apple TV+ about teaming up to offer their own bundle to consumers. Shell said the company will continue to pursue these partnerships, and Ellison discussed a complete overhaul of the technology behind Paramount+, revamping its recommendation engine, improving its ad tech, and consolidating its cloud providers.
“Our goal – David’s, mine, and the rest of the team’s – is to win. We want to make this company the leader in entertainment, and that applies to DTC.” [direct to consumer offerings like Paramount+] “As Shell said,” he said, “so we’re going to evaluate all options to be a DTC winner; and to be a DTC winner really means being in the next final package. We’ve had a bunch of messages from a number of people about partnerships that might involve partnering with another player or players, so we’re going to evaluate all of that.”
Source link
