It’s official: Skydance Media’s $8 billion deal to buy parent company CBS Paramount Global is complete, and the first order of business for new chairman/CEO David Ellison is a major restructuring.
In an open letter about his plans for Paramount, Skydance Corporation (the new name for the combined companies), Allison announced that the business would be divided into three separate divisions: studios, direct-to-consumer, and television media. Ellison explained that the restructuring is intended to improve efficiency as the new company prepares to migrate its entire enterprise to a single technology platform for the first time.
“This will enable us to reduce our technology costs while improving efficiency and productivity and empowering company leaders to make faster and better decisions,” Allison said. “These investments, combined with other initiatives aimed at reducing labor, real estate, procurement, and workflow costs, give us even greater confidence in our ability to not only achieve but significantly exceed our previously announced target of $2 billion in real savings.”
Ellison, son of Oracle co-founder and executive chairman Larry Ellison, also emphasized that he sees Paramount, Skydance Corporation, as a “technologically advanced company” that will take more cues from Silicon Valley. Ellison listed AI-powered translations, virtual sound stages, and proprietary advertising technology stacks as some of the things he would like to see more widely adopted. And starting next year, the company plans to move Paramount Plus and Pluto TV to a “unified technology stack” to improve performance and reduce operating costs.
“This integration will improve the user experience across all of our services — it will enhance our recommendation engine, accelerate delivery speed and quality, and enable us to position Pluto TV as the ‘top of the funnel’ for driving new customers to Paramount Plus,” Allison said.
As Variety notes, the closing of the new deal paved the way for Larry Ellison, Skydance, and RedBird Capital to buy out all of Paramount chair Shari Redstone’s shares in National Amusements Inc. (NAI), which was the controlling shareholder of Paramount Global. Redstone will not join the board of directors of the new Paramount, and NAI shareholders reportedly received $1.75 billion in cash as a result of the deal.
The launch of the new company came just weeks after the Federal Communications Commission approved the merger, which depended on Skydance and Paramount capitulating to pressure from the Trump administration to eliminate diversity, equity, and inclusion (DEI) programs in corporate America. FCC Chairman Brendan Carr said at the time that Skydance had “made a written commitment to ensure that the new company’s programming will reflect a diversity of viewpoints across the political and ideological spectrum.” Skydance also agreed to “take steps to root out the bias that has undermined trust in the national media,” so an ombudsman position will now be created to report complaints of “bias or other issues” to the president of CBS News.
It was clear that the FCC would not approve the Paramount/Skydance merger Skydance merger until Paramount agreed to pay $16 million to settle Donald Trump’s lawsuit against the company for allegations that CBS News edited a 60 Minutes interview with Kamala Harris in a way that would mislead voters in the 2024 election. According to one legal expert, Trump’s lawsuit was “so baseless that it could be considered frivolous,” but if Paramount had stood its ground, it could have jeopardized Skydance’s chances of closing the deal. There is also a widespread belief that Paramount’s payment to Trump contributed to the “financial” justification for CBS’s decision to cancel The Late Show with Stephen Colbert last month. But now that the dust has settled, we can all take a step back and see clearly what these deals were for: to pay off certain shareholders.
