Yahoo Finance David Ellison Vows More Film Production After Paramount Merger
(Bloomberg) -- Independent producer David Ellison delivered a promise Monday to a Hollywood community rocked by strikes, layoffs and cutbacks: Film and TV giant Paramount Global will be increasing production once his Skydance Media takes over.
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“We definitely want to make more pictures,” Ellison, 41, said in an interview. “There’ll be an increase in television production. For the creative community it means more content and more storytelling.”
That will come as a relief to the film and TV industry, which has suffered thousands of job losses as studios like Paramount, Walt Disney Co. and Warner Bros. Discovery Inc. cut costs to adapt to changing consumer tastes. Movies and cable-TV subscriptions no longer deliver the sales they once did, and many of the newer streaming operations lose money.
While Paramount is also cutting costs, its new owners bought in to expand the company, not shrink it.
Ellison, who is poised to become Paramount’s chief executive officer, vows to increase the studio’s slate of films for theaters, saying he’ll build on Skydance’s history of collaboration on movie franchises such as Top Gun, Star Trek, Transformers and Mission: Impossible.
Those pictures have generated the majority of Skydance’s $8.7 billion in box-office sales since the company was founded in 2010.
He also plans to build on popular TV titles such as Yellowstone and Nickelodeon’s SpongeBob SquarePants.
Skydance agreed Sunday to merge with Paramount after months of on-again, off-again negotiations. If the deal is completed as planned, Paramount will be controlled by Skydance backers including Ellison; his father Larry Ellison, the billionaire co-founder of Oracle Corp.; and Gerry Cardinale’s Redbird Capital Partners.
“We are encouraged by the commitment that David Ellison and the Skydance Media team have shown to theatrical exhibition in the past,” Michael O’Leary, chief executive officer of the National Association of Theatre Owners, said by email.
The exhibitors group will review the details of the proposed merger, O’Leary said, with the core concern being “whether this transaction will result in more movies being made for the global theater-going audience or less.”
The sale of Paramount could have easily gone in another direction — and wiped away the company that gained acclaim for films such as The Godfather and Titanic. Before the Skydance deal was reached, Paramount had held talks to combine with rivals including Warner Bros. Sony Group Corp. also looked at the company.
Disney’s $71.3 billion takeover of 21st Century Fox in 2019, for example, dramatically cut the number of films released in cinemas. In 2018, before they combined, the two companies released a total of 25 films in theaters. This year, Disney will release 11, down from 17 last year, with some titles delayed by recent strikes.
In April, Adam Aron, chief executive officer of AMC Entertainment Holdings Inc., the world’s largest theater chain, said major studios are releasing about 64 films a year, compared with about 84 before the Covid-19 pandemic and the Fox-Disney deal.
Fewer pictures are hurting US and Canadian box-office sales, which are expected to fall to $8 billion in 2024 from $9 billion last year, according to Bloomberg Intelligence. They peaked at $11.9 billion in 2018. In the first quarter of 2024, television production fell 16% in Los Angeles from a year earlier, the group FilmLA said.
Other deals have led to similar results. The union of AT&T Inc.’s WarnerMedia and Discovery in 2022 set off two years of cost-cutting as the management moved to pay down debt. Amazon.com Inc., the owner of Prime Video and a relative new player in Hollywood, laid off hundreds of employees after acquiring Metro-Goldwyn-Mayer for $8.5 billion in 2022.
Paramount itself hasn’t been immune. Three executives currently acting as interim CEOs are looking to eliminate $500 million in costs, and Skydance has promised $2 billion-plus in annual savings.
In addition to more investments in film and TV production, Ellison said on a call with investors that he is seeking to evolve Paramount into a “tech hybrid.” That includes a greater role in video games as well as improving the technology and profitability of the Paramount+ streaming service.
“This deal will unify all of the key intellectual property held by both companies and position the company for future growth across our animation, sports content, interactive and technological enterprises,” Ellison said.
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