Movies

The $8-billion Skydance-Paramount Global deal is finally closing. Now what?

BBG News

Following the approval from the Federal Communications Commission, Skydance Media stands on the brink of finalizing its $8-billion union with Paramount Global. This impending merger could trigger widespread modifications for several well-known media entities.

CBS, MTV Networks, and Paramount Pictures are all preparing for significant changes as Larry Ellison and his son, David, assume control from Shari Redstone, who currently holds the majority stake in Paramount Global. This ownership transition has unfolded amidst a period of dramatic shifts within the media industry, driven by the rise of streaming services and more recently, a White House that isn’t hesitant to wield its power to silence critics.

Skydance and its financial partner, RedBird Capital Partners, have assured their investors that they aim to achieve $2 billion in cost reductions. This goal likely implies more budget restrictions and potential job cuts.

According to a seasoned CBS insider who isn’t allowed to speak publicly about it, this could very well be the greatest transformation the organization has experienced since it first began.

Once the deal is finalized on August 7, here’s what Wall Street and the media industry will keep a close eye on:

Once the transaction is completed on August 7, these are the aspects that Wall Street and the media sector will focus on:

After the deal seals on August 7, these are the points of interest for Wall Street and the media world:

On August 7 when the deal is finalized, these are the areas that Wall Street and the media industry will pay attention to:

In summary, after August 7 when the deal is closed, these are the key aspects that Wall Street and the media industry will monitor closely.

Will Skydance spend enough to supercharge streaming?

In the past year, Paramount+ gained approximately 10 million new subscribers, bringing their total number to 79 million. This growth was fueled by NFL broadcasts, popular CBS series like “NCIS,” and original shows such as “1923,” “Landman,” “Lioness,” and “Tulsa King.” The company anticipates achieving U.S. profitability for Paramount+ this year, making it one of the quickest subscription services to reach this milestone.

Due to its limited resources and smaller pool of content compared to giants like Netflix, competing effectively has been challenging. A possible strategy: forming partnerships with rival streaming platforms to expand its user base.

The research firm MoffettNathanson raised questions in their recent report about the long-term scalability of Parmamount+, specifically wondering if the new leadership will consider strategic alliances as a potential solution for the future.

Ellison and his team plan to introduce a tech-driven approach to Paramount, aiming to enhance its user interface and recommendation system, areas that insiders agree could use some improvement. Notably, Chris McCarthy, who spearheaded the strategy for original series at Paramount+, is expected to depart once the deal is finalized.

Can traditional TV be saved?

Analysts are hoping that Skydance will boost its spending on movie and television series franchises, as a means to rejuvenate properties that have been held back by Paramount’s financial obligations.

As Skydance gains a rich collection of films and television series, it will simultaneously encounter the gradual dissolution of traditional broadcast and cable TV, which is experiencing a decline in viewership. Notably, streaming platforms have become the dominant force in video consumption, a shift that occurs as Skydance assumes control over CBS and Paramount Global’s assortment of channels such as MTV, BET, and Comedy Central.

According to analyst Doug Creutz from TD Cowen, the new company might want to think about separating its conventional TV operations, much like how Warner Bros. Discovery and Comcast are dealing with their cable networks. However, whether this move will actually take place is still uncertain.

In a note penned down on Friday, Creutz stated that there’s a distinct chance to enhance Paramount’s growth trajectory by offloading certain assets. However, it seems unlikely that the Ellison family acquired Paramount with the intention of dismantling it piece by piece.

If the Federal Communications Commission (FCC) loosens the regulations on television station ownership, it could potentially prompt Skydance to demonstrate its dedication to broadcasting, possibly resulting in a wave of consolidation among TV stations.

How will ’60 Minutes’ reset?

CBS News’ “60 Minutes” garnered a boost in confidence with the appointment of Tanya Simon, a well-respected industry veteran, as the new executive producer. The decision was made by the program’s determined correspondents who highly regard her.

Simon’s upcoming appointment is anticipated to bring a sense of continuity after the exit of longtime showrunner Bill Owens, who was asked to leave due to negotiations for a $16-million settlement in relation to President Trump’s lawsuit alleging that the program manipulated an interview with former Vice President Kamala Harris to enhance her image among voters.

60 Minutes maintained its firm stance during White House reporting amidst ongoing talks. However, it’s uncertain if this tough approach will persist under the new ownership. Notably, Larry Ellison has a cordial rapport with the president, and the new owners have agreed to establish an ombudsman to monitor news content.

Ensuring accuracy is crucial for business reasons as well, since “60 Minutes” continues to be the most financially successful show on CBS.

Once Simon takes over, the new leadership is anticipated to tackle other aspects within the news sector requiring enhancement. The redesign of “CBS Evening News” has fallen short in viewership and may undergo modifications.

Over a more extended period, there have been discussions suggesting that Skydance might aim to purchase CNN from Warner Bros. Discovery and merge it with their existing broadcast news division. This concept, which has been contemplated multiple times in recent decades, could potentially be put into action.

Hollywood Inc.

The conclusion of the ‘Late Show’ series is a significant setback for a formerly cherished television genre that has seen its appeal and financial backing dwindle.

Will creative freedom be tested?

It was disappointing news for Stephen Colbert’s fans, as well as progressive Democrats in the legislature and other late-night comedians who frequently satirize President Trump, when CBS decided to end “The Late Show With Stephen Colbert.

The company stated that the decision was purely based on business considerations, since the demographic of younger viewers who have traditionally contributed significantly to the profitability of late-night TV shows for decades is no longer tuning in. However, the timing of this move might give the impression that the company is yielding to Trump, as he has consistently kept the host on his list of adversaries.

However, Colbert’s show will continue until May, as it has already been purchased by advertisers for the following season. Despite this, the host has persisted in satirically ridiculing Trump.

In the debut episode of “South Park,” the humor was even more intense. The animated show incorporated allusions to a “60 Minutes” agreement, depicted Donald Trump alongside the devil, and broadcasted an alternate version of a public service announcement ordered by Trump, featuring a nude president with talking private parts.

There is no question both shows will test the patience of the new owners.

As a passionate film enthusiast, I’d express it like this: Interfering with Stephen Colbert or suppressing the creators of “South Park,” who have just secured a staggering $1.5-billion deal to keep their show running on Paramount+ and transfer their entire library there, would ignite an uproar far greater than what we’ve witnessed so far. Any move to silence them sends a chilling message to artists and creatives, potentially discouraging many from collaborating with the company’s film and television projects in the future.

Can the movie business be revived?

Over the past few years, Paramount Pictures, known for series like “Transformers” and “Mission: Impossible,” has consistently placed either fifth or fourth in domestic box office earnings. This year, as the only significant studio based in Hollywood, it contributes approximately 7% of ticket sales in the U.S. and Canada, according to data from box office site The Numbers.

After the outbreak of the pandemic, the company has experienced significant success with films such as “Top Gun: Maverick” and “Sonic the Hedgehog 3”. It has also seen moderate success with titles like “Bob Marley: One Love”. However, despite being over a hundred years old, the studio has faced challenges due to insufficient investment in its intellectual property and movie franchises.

The most recent “Mission: Impossible” movie, starring Tom Cruise and claimed to be the last in the series, made $589 million worldwide but had production costs between $300 million and $400 million (not including advertising expenses). Paramount’s new Smurfs animation underperformed at the box office. Coming soon: a remake of “The Naked Gun.

It’s anticipated that Brian Robbins, who serves as the head of Nickelodeon at Paramount Global and leads the unit, might be departing from the studio. However, there hasn’t been an official confirmation about his intentions. David Ellison, a movie enthusiast, is believed to show keen interest in the studio’s operations. There are plans for him to assume control, with Dana Goldberg, Skydance’s chief creative officer, likely to oversee film production at Paramount. Notably, Skydance has collaborated with Paramount on movies previously, with productions like “Maverick” and the “Mission: Impossible” series under their belt.

Will the NFL take its ball elsewhere?

Changing hands of ownership allows the NFL to renegotiate its multi-year contract with CBS, granting them the rights to broadcast games on Sundays, as well as the AFC Championship Game and two Super Bowls. The NFL is a key element in television broadcasting, delivering the majority of the year’s most popular shows.

In the absence of the NFL, CBS might encounter significant difficulties in negotiating fees with pay-TV providers that air their channels. Moreover, the income derived from affiliates who purchase CBS’s content would likely experience a substantial decrease.

Despite the NFL’s reputation for seizing opportunities to be strict, Commissioner Roger Goodell indicates that he will thoughtfully weigh options prior to implementing any adjustments.

For several decades, CBS has been a longstanding partner of ours, and we also maintain a separate relationship with Skydance. For the next two years, we have the flexibility to choose our future partnerships. However, I don’t anticipate making a change during this period, but we will certainly consider it as an option.

The NFL might delay making any changes to its contracts with its media partners until 2029, when it can do so if it wishes. The recent media deal for the NBA worth $76 billion over 11 years has led the NFL to think that their own contract may be undervalued.

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2025-07-26 02:01

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