David Ellison Talks About Savings, Growth, Technology, and AI as Paramount Approaches WBD
David Ellison Projects Substantial Savings from Paramount Merger
David Ellison, CEO of Paramount, announced that anticipated savings from the Skydance-Paramount merger will exceed the initially projected $3 billion, with $2.5 billion expected by year-end. At the recent FII Priority Summit, he emphasized, “We’re in the process of basically converging Paramount+, BET+, and Pluto all into one unified tech stack. We’re going to finish that second quarter of this year.”
Ellison explained that a unified tech stack encompasses various technologies, from software and programming to data storage, allowing applications to function more efficiently. He noted that maintaining multiple systems is both redundant and costly.
As the company looks ahead to its proposed acquisition of Warner Bros. Discovery, Ellison is optimistic about operational efficiencies that could significantly enhance cash flow. He stated, “Yes, there are the efficiencies and the ability to operate the company more efficiently, which dramatically increases cash flow.” His comments were released through an SEC filing following the event.
Paramount anticipates at least $6 billion in cost savings from the Warner Bros. Discovery acquisition, which is expected to close in the third quarter. Despite industry concerns regarding potential job cuts, Ellison downplayed these fears, asserting that the combined company will not only operate more effectively but also expand.
Reflecting on recent achievements, Ellison mentioned, “Over the last six months since we’ve been at Paramount, we’ve taken the film slate from eight films when we bought the company to 16 movies that will be released this year exclusively in theaters.” He highlighted the growth of Paramount+ and the addition of significant content, including partnerships with UFC and UEFA.
The merger between Paramount and Warner Bros. Discovery will result in a combined revenue of $69 billion, with $18 billion in EBITDA and over $10 billion in cash flow, all while investing more than $30 billion in content. However, the joint entity will also face approximately $80 billion in debt, a concern shared by many within the industry.
During his appearance, Ellison addressed sensitive topics like layoffs and debt only in broad terms, focusing instead on the advantages of ownership. “We’re very proud that we were the largest shareholders in Skydance… and we will be the largest shareholders of the combined Paramount-Warner Bros. Discovery when that deal closes,” he remarked. He underscored the alignment of long-term incentives, allowing for forward-thinking decision-making that benefits the company’s future.
Ellison, whose father is Oracle co-founder Larry Ellison, emphasized the need for a seamless integration of content and technology in legacy media. He regards Paramount as well-positioned to lead in this area, particularly with the incorporation of AI, which he described as a “phenomenal tool for the creative community.”
He elaborated on how AI could enhance storytelling, saying, “One of the core principles of Pixar was always, ‘Be wrong as fast as possible.’” Ellison believes that advancements in artificial intelligence will enable creators to iterate more rapidly, ultimately resulting in more engaging narratives for audiences.
Meanwhile, Warner Bros. Discovery has scheduled a special meeting for shareholders on April 23 to vote on the merger.
