The pair have identified $2 billion in cost efficiencies and synergies as they look to manage the company's declining linear business
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Paramount Global’s new CEO David Ellison and president Jeff Shell laid out their vision on Monday to turn the company from a struggling media conglomerate into a technological leader in the entertainment space.
On a conference call with investors, the pair said they would “rebuild” the Paramount+ platform’s to increase time spent, offer subscribers improved recommendations and reduce churn and utilize artificial intelligence to turbocharge content creation capabilities that improve overall productivity and lower cost. They also plan to leverage Skydance and Paramount’s combined portfolio of animation and sports content and license some of their content to maximize its value.
The executives have identified $2 billion in cost efficiencies and synergies as they look to manage Paramount’s declining linear business. Paramount is expected to reach $3.4 billion in EBITDA and produce $2.8 billion of revenue in 2025, $4.1 billion in EBITDA, $2.5 billion of revenue and return to investment grade status with all credit rating agencies in 2026 and deleverage from approximately 4.3 times to 2.4 times by 2027.
“The key thesis behind this transaction is our desire to inject Skydance as a pure play content company, to double down on Paramount’s prowess as one of the world class storytelling enterprises and also ensure the company is positioned to be able to expand into a tech hybrid to be able to transition to meet the demands and needs of the evolving marketplace,” Ellison said.
“Our goal, David and my goal and the rest of the team, is to win. We want to make this company the leader in entertainment, and that goes for DTC too,” Shell added. “So we’re going to be evaluating all options to be a winner in DTC, and to be a winner in DTC really means being in the ultimate bundle that’s coming. We’ve got a bunch of inbound from a number of people about partnerships that could involve a partnership with another player or players, and so we will evaluate all that.”
Ellison and Shell’s remarks come after Skydance Media reached an $8 billion cash and stock deal to merge with Paramount and acquire Shari Redstone’s National Amusements, which controlled about 77% of Paramount’s Class A voting stock.
The deal, which backed by RedBird Capital Partners and the Ellison family, includes $2.4 billion for NAI, $4.5 billion for non-NAI shareholders in Paramount and an additional $1.5 billion in new capital to help pay down debt and recapitalize the company’s balance sheet.
Under the terms of the agreement, new Paramount will have an enterprise value of $28 billion. Skydance is being valued at $4.75 billion, with its equity holders receiving 317 million newly issued Class B shares valued at $15 per share. Paramount’s Class A shareholders will receive $23 per share.
Skydance’s consortium of investors will own 100% of new Paramount’s Class A shares and 69% of outstanding Class B shares, or approximately 70% of the pro forma shares outstanding. Meanwhile, Paramount’s non-NAI Class B shareholders will receive a 48% premium to the price of the stock as of July 1, while Class A shares will receive a 28% premium.
The deal also includes a 45-day go shop provision that will allow the Paramount board of directors’ independent special committee to actively solicit and evaluate alternative acquisition proposals. In the event of a superior proposal, Skydance would receive a $400 million breakup fee.
The transaction is expected to close in the third quarter of 2025, subject to regulatory approval and other customary closing conditions.
More to come…
The post David Ellison and Jeff Shell Outline Plan for New Paramount: Tech, Animation and Rebuilding Paramount+ appeared first on TheWrap.
