David Ellison’s goal for Paramount: Make it a ‘media and technology’ company

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As a seasoned movie industry analyst and long-time observer of Paramount Global’s evolution, I’ve seen my fair share of mergers and acquisitions within this dynamic and ever-changing landscape. The recent announcement of Paramount’s planned merger with Skydance Media, spearheaded by tech visionary David Ellison, has piqued my interest for several reasons.

In today’s rapidly changing entertainment industry, Paramount Global must adapt and transform into a “media and tech” business, as suggested by technology mogul and soon-to-be Paramount CEO David Ellison to investors and financial analysts on Monday. This follows the approval of a merger agreement between Paramount and Ellison’s Skydance Media the previous day.

As a movie buff putting it in my own words: “When I gaze at the current tech-driven landscape, I notice an increasing number of technology firms swiftly venturing into media businesses. To keep up and thrive, Paramount needs to enhance its technological capabilities, becoming not just a media company but also a formidable tech enterprise.”

As a cinephile, I’m excited about Paramount’s plan to enhance the recommendation engine and ad technology of their streaming service, Paramount+. For me, this means more personalized suggestions based on my viewing history and preferences, leading to increased engagement with the platform. This engagement not only benefits me as a viewer but also helps Paramount+ become more profitable. By refining the algorithm that powers these recommendations, we can expect less churn and more time spent discovering new and exciting content on the platform.

On Sundays, it was revealed that Paramount’s board of directors had endorsed a $8.4-billion proposal from Ellison’s Skydance Media and its investors to acquire National Amusements Inc., owned by the Redstone family in Massachusetts. This transaction granted Ellison control over Paramount and facilitated Skydance’s merger with the renowned media company.

Despite having a significant reliance on linear TV and a substantial debt burden, the business must adjust to advanced technologies to remain competitive and improve operations.

Ellison pointed out the collaboration between Skydance Animation and Oracle, a company his father helped establish. Contrary to the traditional perception of animation being an on-site business, Ellison mentioned that “Spellbound,” Skydance’s latest animated production, partially utilized cloud technology for its creation. This led to significant cost savings.

“He mentioned their goal to expand the business throughout all manufacturing processes. Furthermore, they plan to incorporate artificial intelligence technologies to boost innovation and enhance productivity.”

Ellison expressed that the blend of artistic creativity and technological innovation is truly vital to our company’s foundation and indispensable for our success in the future.

Investors in the market might still be hesitant. The share price of Paramount was approximately 5% lower, at $11.21, by 7:30 a.m. Pacific time.

Last summer, Ellison initiated discussions with Paramount’s non-executive chairwoman, Shari Redstone, regarding a potential deal for her father’s company. By June, it seemed that an agreement was imminent. however, Redstone unexpectedly changed her mind and ended the negotiations.

Over the past few weeks, my fellow investors and I, led by Ellison, have been working diligently to refine the terms of our proposed deal. This collaborative effort reached a significant milestone with the recent announcement on Sunday. However, it’s important to note that we still need regulatory approval before this deal can be finalized.

As a devoted cinema enthusiast, I’d put it this way: Last night, in an email to all employees, Paramount’s self-proclaimed trio of co-CEOs announced their intention to press on with a previously unveiled blueprint. The plan aims to streamline our teams, eliminate redundant roles, and decrease the overall workforce size.

“Until the transaction closes, it’s business as usual,” the note said.

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2024-07-18 21:52