David Ellison Quickly Imprints His Vision on Paramount
David Ellison's Vision for Paramount Skydance
David Ellison has big plans for the newly merged Paramount Skydance. As CEO and chairman, he has already made significant moves to secure talent and content as part of his strategy to invest in "high-quality storytelling and cutting-edge technology." However, experts suggest that it may take years for Paramount to ramp up its production capabilities, and these new investments could affect the company’s stock performance in the short term.
Ellison is quickly making good on his promises. Just over a month into his role at the helm of the merged entity, he has signed creative and C-suite talent, greenlit new franchises, and struck a billion-dollar deal to bring a major sport to the company's streaming service. In an open letter published in early August, Ellison outlined his vision, stating that Paramount would focus on "high-quality storytelling and cutting-edge technology" to define the next era of entertainment.
One potential step in this direction could be the acquisition of Warner Bros. Discovery. Reports indicate that Paramount Skydance is working with an investment bank to make an offer for the company. While such a deal would be costly, it would significantly expand Ellison’s media empire.
A Rebuilding Phase
Experts say that Paramount is in a necessary rebuilding phase, which will require time and substantial investment. Jessica Ehrlich, an analyst at Bank of America, noted that the company had been underfunded for years under previous leadership. She emphasized that there will likely be a prolonged period of deep investment in content.
The merger between Paramount and Skydance was finalized in early August after a year-long delay due to an inquiry by the Federal Communications Commission into alleged news distortion at Paramount's subsidiary, CBS. The merger was approved shortly after Paramount agreed to pay $16 million to settle a lawsuit filed by Donald Trump over the editing of a "60 Minutes" interview. It also occurred around the same time as CBS announced the cancellation of "The Late Show with Stephen Colbert," which executives described as a purely financial decision.
Strategic Moves and New Deals
Ellison wasted no time in making his mark. Within weeks of the merger, he announced a seven-year, $7.7 billion deal to make Paramount the exclusive U.S. home for TKO Group’s UFC starting in 2026. This agreement means that UFC events will be available directly to Paramount+ subscribers and, in some cases, on CBS. Notably, this deal is nearly as expensive as the $8 billion merger itself.
Sports rights are becoming increasingly scarce, with many major leagues already securing broadcast and streaming deals. Apple is set to host Formula 1, and Major League Baseball will wait until after the 2028 season to reorganize its media packages. This makes it unlikely that many top-tier sports assets will be available for Paramount to acquire in the near future.
Expanding Content Portfolio
UFC is considered a unique asset, offering year-round events that keep fans engaged and less likely to cancel subscriptions compared to other sports. With 43 live events annually, totaling 350 hours of live programming, the UFC deal is a significant move for Paramount.
Paramount+ is not the only division benefiting from new content. Ellison secured the rights to develop, produce, and distribute a live-action feature film based on Activision's Call of Duty video game franchise. Call of Duty has been the best-selling video game series in the U.S. for 16 consecutive years, with over 500 million copies sold globally.
Video Game Adaptations
In recent years, studios have increasingly focused on video game adaptations, and Paramount has been successful in this area. The company turned Sega's Sonic the Hedgehog into a billion-dollar movie franchise and is also distributing a new Street Fighter adaptation as part of a three-year distribution deal with Legendary. Legendary has experience with video game franchises, having co-produced Warner Bros.' "A Minecraft Movie" and "Pokémon: Detective Pikachu."
New Creative Talent
Paramount has also brought in the Duffer brothers, known for creating Netflix's hit "Stranger Things," through an exclusive four-year agreement for feature films, television, and streaming projects. Their producing partner, Hilary Leavitt, will also work on projects for Paramount Pictures, Paramount Television, and Paramount's direct-to-consumer business.
Additionally, Paramount hired Dane Glasgow, who previously worked at Meta, Google, eBay, and Microsoft, as its chief product officer. This appointment highlights the company’s commitment to technological development alongside its entertainment content push.
Long-Term Strategy and Challenges
While the long-term vision for Paramount is clear, analysts note that it will take several years for the company to ramp up its production. The number of releases from the studio is expected to double, but there may not be immediate financial benefits. These investments are likely to weigh on the stock in the short term.
If Paramount proceeds with its bid for Warner Bros. Discovery, the company's slate could grow even larger. This acquisition would add major franchises like DC superheroes, Sonic the Hedgehog, Harry Potter, and Game of Thrones, along with sports rights such as the National Hockey League, Major League Baseball, and NASCAR.
Analysts are waiting for Paramount’s November earnings report, where Ellison is expected to provide more details on the new company’s strategy, including cost-cutting measures aimed at reducing $2 billion from the conglomerate amid advertising losses and industry challenges.
Future Outlook
As the company prepares for upcoming layoffs and office policies, it remains focused on its long-term goals. Ehrlich noted that Ellison’s approach is clearly long-term, contrasting with previous management teams that had a very short-term focus. The path ahead for Paramount Skydance is ambitious, and the success of these strategies will determine the company’s future in the evolving entertainment landscape.
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