Three Paramount CEOs to be laid off following Ellison merger

David Ellison plans an overhaul of Paramount Worldwide that includes cutting the company’s television networks, adding billions of dollars to streaming and an overhaul of top management, according to people familiar with the matter.

Ellison, who will take over as CEO of Paramount when it merges with his Skydance Media next year, is exploring merging all of Paramount’s television networks, including CBS and MTV, into a single unit. These operations are primarily managed by the company’s two co-CEOs, Chris McCarthy and George Cheeks. While Cheeks is expected to stay, McCarthy’s future is less certain.

Brian Robbins, the company’s third co-chief executive and head of Paramount Pictures movie studios and Nickelodeon, is expected to leave after the deal closes, people familiar with the matter said. form.

Ellison, a movie fanatic who has co-financed most of Paramount’s blockbusters of the past decade, was initially interested in the company’s eponymous film studio. While Ellison and Robbins have collaborated on several productions, they are said to have acknowledged that Robbins is unlikely to stay. But no final decision has been made.

Ellison has discussed putting Skydance production chief Dana Goldberg in charge of film operations, at least for the time being. Spokespeople for Paramount and Skydance declined to comment.

Since agreeing to merge Skydance with Paramount in July, Ellison and his lieutenants have been meeting with prospective employees to get input on what’s working and what’s not. Ellison told Paramount employees that he hasn’t made any personnel decisions yet.

Ellison agreed to the deal because he knew Paramount needed to make major changes. Nearly all of the company’s profits still come from cable networks like Nickelodeon, MTV and Comedy Central, which defined an era in pop culture. But the networks have been hemorrhaging viewers and advertisers to technology companies such as Netflix Inc. and YouTube. The company’s eponymous film studio is not expected to be profitable in 2024, according to analyst estimates.

“The business needs to transform,” Ellison told Bloomberg shortly after the deal was announced.

When Donald Trump won the presidential election, Ellison and the Skydance team began preparing to take over Paramount sooner than they even imagined. They now believe a deal could be completed as early as late March or early April.

The Federal Communications Commission, which approves the broadcast license transfer, still must support the deal. Opponents of the deal will submit a petition on December 16, the committee said. All parties will provide final responses on January 13.

Two areas that Ellison needs to focus on immediately are television networks and streaming. Ellison is considering cutting hundreds of millions of dollars in costs by consolidating the company’s television networks into a single group, consolidating cross-departmental teams such as programming and marketing. There will be fewer original programming produced for cable networks and staffing will be reduced.

Ellison will combine two groups, one currently reporting to McCarthy and the other to Cheeks. While McCarthy is a favorite of former CEO Bob Bakish, Cheeks has a good relationship with Jeff Shell, who will serve as Ellison’s second-in-command at Paramount. Number one. Cheeks and Schell work together at NBCUniversal.

Ellison said in an investor presentation earlier this year that he planned to streamline the company’s operations, but did not disclose specific details.

Paramount will also explore strategic partnerships involving cable networks, which could lead to the divestiture of some of those businesses. While Ellison may not formally explore selling any of these networks as he did under previous regimes, he is open to selling nearly every network in his portfolio except CBS.

Ellison plans to pare the company’s real estate holdings and consider selling facilities such as the CBS Broadcast Center, the production facility for “60 Minutes” and “Last Week Tonight with John Oliver.” CBS also owns the Ed Sullivan Theater, home of The Late Show with Stephen Colbert.

“We’re not selling Paramount, we’re not selling CBS, but we want to maximize value,” Ellison previously told Bloomberg.

The deal has led to negotiations between Ellison, Paramount and the NFL. As part of the terms of the contract, the league can opt out of its broadcast agreement with CBS. While the NFL does not plan to do so, it has discussed converting some of its stake in its joint venture with Skydance into an equity stake in Paramount with Ellison. It also discussed selling part or all of the NFL Network to Paramount.

The cuts in TV programming will help pay for larger investments in streaming. Paramount’s customer base has grown to 72 million and it has been profitable for two consecutive quarters. However, its viewership ranks near the bottom among mass-market services and remains much smaller than rivals such as Netflix, The Walt Disney Co. and Amazon.com Inc.

Cindy Holland, who serves as a consultant to Skydance, is advising on streaming strategy and is considered by many at Paramount as a possible candidate to take over the business.

Ellison was particularly concerned about the poor user experience in the app and talked about improving the recommendation algorithm to make it easier for viewers to find shows to watch. Ellison, the son of Oracle co-founder Larry Ellison, grew up around tech luminaries such as Apple co-founder Steve Jobs. Ellison often talks about Paramount’s blending of technology and art, as well as more day-to-day changes such as improving Paramount’s use of enterprise software.

Ellison will also more closely integrate free streaming service Pluto into Paramount. Free services like Pluto can serve as a gateway for viewers to use Paramount more frequently, while also benefiting from marketing of Paramount shows. Pluto was once the leader of a new breed of free, ad-supported services, but has since lost out to Fox Corp.’s Tubi and Roku channels.

Paramount is one of three services, along with Peacock and Max, considered too small to survive on their own. Current Paramount leaders have discussed strategic partnerships with Peacock and Max to leverage their shared resources. The company has also been talking to Amazon and foreign streaming services.

While Paramount will continue to pursue these deals, Ellison sees less urgency in doing so. He believes that the company has a solid foundation for development.

Paramount is much smaller than most of its rivals, even beleaguered rivals like Warner Bros. Discovery. However, it will have a healthier balance sheet after this transaction. And, unlike most other companies, it will have access to the Ellison family’s bank accounts. David is responsible for the day-to-day management of Paramount, while his father, one of the world’s richest men, provided much of the financing for the deal.

–With help from Kelsey Griffith.

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