some wingers are salivating at the coming prospect of the Ellisons owning Paramount and controlling CBS news.
From Puck:
As the Paramount-Skydance deal finally closes this week, many are wondering what else the young mogul has up his sleeve. Skydance-Paramount is still subscale, and David Ellison has access to unlimited capital. Is Warner Bros. in his sights?
| |
|
Throughout the tortured months leading up to the sealing of the Skydance-Paramount deal, Hollywood insiders rooted for an Ellison père-et-fils victory. They didn’t want Paramount to be dismantled by private equity sharks, and they certainly didn’t want to lose another legacy studio the way Fox all but disappeared after Disney acquired most of it in 2019. But if a number of major Hollywood players are right, the Ellison victory might lead to an ironic twist: The newly combined company, these people believe, will also take a run at acquiring Warner Bros. One even told me he definitely knows that this is Ellisons’ intention. “Paramount’s just not big enough to compete,” another Hollywood insider said.
Paramount, obviously, was already a melting ice cube, and that problem won’t be reversed by Skydance alone. In 2024, Ellison’s company posted adjusted EBITDA of $81 million. Larry Ellison, who underwrote the Paramount transaction, can also finance future deals. And a slimmed-down Warners—minus the Discovery part—would add a great big library, potentially great franchises, and a sizable jump in subscribers for the combined streaming service: HBO Max has around 122 million, and Paramount+ has about 78 million. Analysts have noted that these streaming services would be complementary, as Paramount+ appeals to broadcast-type audiences that are into CBS shows and Taylor Sheridan programming, while HBO Max tends to be more highbrow. There would obviously be overlapping subscribers, and a combined entity would significantly lag behind Netflix and YouTube, but still: Slap them together and you’ve got real scale. Of course, Skydance coughed up a mere $8 billion for Paramount—a trifle compared with the potentially $30 billion-plus that it would cost the Ellisons to buy skinny Warners. And while yes, the Ellisons have walked an arduous path to lock up the Paramount deal, and they have a lot of slashing to do to get to the promised $2 billion in savings, they’ll have months to take care of that before the Warners-Discovery split wraps up sometime next year. Analyst Rich Greenfield, a partner at LightShed, sounded a somewhat skeptical note about this scenario. After all, David Ellison has vowed to transform Paramount into a company that will lead the way on blending media and technology. “Do you want to buy more studio assets?” Greenfield asked. “It seems far too simplistic. I wonder whether the Ellisons are more interested in buying something like TikTok” as they try to figure out the future of entertainment. The Ellisons have, indeed, shown interest in TikTok since Oracle won the bid to become its secured cloud provider five years ago.
But one source who said he knew definitively that Skydance has long planned a move on Warners pointed to last week’s announcement that the motion picture group is cutting 10 percent of staff. “Warner Bros. is having a banner run of movies, and they’re announcing layoffs?” he said. “Reading between the lines, they’re preparing the company for sale. They need to scale up.” (Warners declined to comment.)
Anyway, the financing is a risk that Larry can afford to take, and, as one source noted, he only has one son, who presumably will inherit big bags of money someday. And Larry has been intertwined with his children’s Hollywood ventures from the start—even stepping in to help daughter Megan’s Annapurna Pictures when the film company, after a strong start, started to founder. Annapurna shifted toward gaming, but there has been trouble on that front, too. Nathan Gary, who had managed Annapurna Interactive through eight profitable years, led an exodus of all 25 of the division’s staff members late last summer. There has been some speculation that Skydance will buy Annapurna, which would require a lot of care in setting a price defensible to investors, as the number would have to be disclosed. Managing a public company will be a new experience for David, though not for the combined company’s president-to-be, Jeff Shell. Skydance declined to comment, but an insider dismissed the idea of an Annapurna sale to Paramount.
continues in the next post....
| | | |
