Now that Paramount has found a buyer, what’s next?

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The long–running saga of Paramount’s sale is finally at an end, but the real work might just be beginning.

On Monday, Paramount Global announced an agreement to merge with Skydance Media, the production company behind such films as Top Gun: Maverick and Mission: Impossible—Dead Reckoning. The deal will see Skydance buy National Amusements from Shari Redstone for $2.4 billion in cash, then merge the company with Paramount Global, giving Paramount $1.5 billion in cash and offering $4.5 billion in cash or stock to shareholders.

Skydance’s David Ellison will be CEO and former NBCUniversal CEO Jeff Shell will become president. And the two are already planning moves that will mean big changes to Paramount, including making it a “media and technology” company. Here’s a look at what they have in store.

Cost cutting

Skydance has already identified $2 billion in cost cuts to be made at Paramount, which it says can be made “quickly.” The majority of those will come from Paramount’s linear television holdings (made up of channels that are watched via satellite or cable television).

“Linear is going to keep declining,” said Shell in a call with investors on Monday. “We don’t think it’s going to worsen, but we don’t think it’s going to get better either.”

That belt-tightening might be painful, but it’s not unexpected. The company’s former three-person management team had already discussed the need to reduce costs. Ellison and Shell did not specifically identify how they planned to make those cuts.

Merging divisions

Ellison already has plans to begin combining the companies, though. On that media call, he discussed adding Skydance content to Paramount’s library. That will include combining Skydance’s animation business (which has released Luck on Apple TV+ and the upcoming Spellbound on Netflix) with Paramount’s Nickelodeon.

He also discussed blending CBS Sports with Skydance’s sports documentary division, which is behind HBO’s Hard Knocks series and an upcoming 10-part documentary on Netflix focused on Dallas Cowboys owner Jerry Jones.

Trimming cable units

Paramount Global owns a staggering number of media properties, including close to 20 CBS stations and cable channels that include BET, MTV, CMT, Comedy Central, TV Land, Logo TV, Smithsonian Channel, Pop TV, Nickelodeon, and Showtime (along with several additional channels in international markets).

Some of those are doing well. Others, though, have a minimal number of original shows and have struggled in a quickly evolving cable landscape. To that point, some of these networks could be sold off or shut down, depending on the plans of the new management team. Shell did indicate he was willing to sell some assets.

“There are assets here which we think are not strategic to where we’re going, that if we were to get a buyer to pay a price that we thought was compelling, we would absolutely do that,” Shell said. “And we know current management is also talking about a couple of transactions that, if they get the right price, we’ll be supportive of.”

A renewed focus on sports

As Netflix, Apple, Amazon, and other streaming services begin investing in live sports, Skydance acknowledged that area as a critical one for the new Paramount. On the call, Shell hinted that the new owners would look to boost CBS’s portfolio of sports. Right now, that includes the NFL, the Masters golf tournament, and part of the March Madness tournament.

The new Paramount, he said, “will likely be a buyer rather than a seller” of sports rights, adding “sports is the foundation of our business.”

Streaming bundles

There are a growing number of streaming bundles these days, and Paramount+ has reportedly been in talks with both Peacock and Apple TV+ about teaming up to offer consumers a bundle of their own. Shell said the company would continue to pursue those partnerships and Ellison discussed an overhaul of the technology behind Paramount+, revamping its recommendation engine, improving advertising tech, and unifying cloud providers.

“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 [direct to consumer offerings like Paramount+] too,” Shell said. “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.”


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