Now on to the optics of today’s big Paramount close…

By the time this hits your inbox, David Ellison and his inner circle will have finished up the big closing dinner to celebrate Day One of New Paramount. At the Nobu in Midtown—because of course it was held there… the Ellisons are investors in a few outposts of the sushi chain, though not in this one—the new owner-operator of Paramount toasted incoming leaders of CBS, CBS News, the Paramount streaming services and movie studio, plus company president Jeff Shell, deal architect Gerry Cardinale, and a bunch of bankers and lawyers who worked for two arduous and often ridiculous years on an $8 billion transaction that, if all goes well, could serve as a blueprint for how to save a 100-year-old Hollywood studio in the age of Big Tech. Or something like that.

Honestly, as someone who’s chronicled this whole tortured process from the initial tire-kicking phase through Shari Redstone’s she’s in, she’s out, she’s back in waffling, through the third-world strongman graft disguised as U.S. regulatory review, I’d say that the first day of the Ellison Era went about as incident-free as possible. Especially since David took a bit of a risk. Rather than selecting a friendly venue or two for his first media interviews, Ellison & Co. engaged with a horde of salivating New York business journalists, all at once, most of them angry over the anti-media political concessions required to seal this deal. Ellison himself didn’t say all that much, but he endured the interrogation, mixed and mingled, and managed to appear at least semi-transparent while avoiding bad headlines that his team would be forced to clean up. (He’ll be on CNBC in the morning.)

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In “Severance,” Mark S. leads a team at Lumon Industries, whose employees have undergone a severance procedure that surgically divides their memories between their work and personal lives. This daring experiment in “work-life balance” is called into question as Mark finds himself at the center of an unraveling mystery that will force him to confront the true nature of his work … and of himself.

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Remember, Ellison and his advisors have been strategizing this Day One plan for more than a year, so everything that was said or done was carefully choreographed. Minutes after the deal officially closed this morning, Ellison published a lengthy mission statement filled with the usual corporate platitudes but also a blunt assessment of the business hurdles, an acknowledgement of the brutal cuts ahead, and at least some basic sympathy for the “challenging period” endured at the news division amid the Trump payoff and the gun-to-head “anti-woke” promises to the F.C.C.

Ellison then showed up first at CBS News headquarters—not a coincidence, he later made clear. Per sources, he popped into the morning news meeting, met briefly with top execs (he told them a Tom Cruise story, as one does), spent a little extra time with Tanya Simon, the new executive producer of 60 Minutes—again, not a coincidence—and said gracious hellos to correspondents Lesley Stahl, Anderson Cooper, and Bill Whitaker. (Stahl and Scott Pelley, of course, went very public with their dismay over the Trump payoff and threats to the integrity of CBS News.) Gayle King gave Ellison a CBS Mornings mug and—in front of multiple people—a supportive, “Let’s go.” Not surprisingly, Ellison seems to be taking extra care to repair the news division’s broken trust in its parent company. He avoided making specific promises, but in his manifesto, Ellison praised not only CBS News but 60 Minutes, in particular, and its “seasoned journalists” committed to “accuracy, integrity, and public trust.” Translation: Shari and her board threw you under the bus, not me. Will that work? I texted one 60 veteran, who was appreciative but somewhat unimpressed: “Let’s see what he does, not what he says.” Exactly.

As for the news leadership, Ellison and Shell are waiting to see if this deal with Bari Weiss and her Free Press actually happens. (“I’d say 60-40 yes,” said one source close to the process when I asked the betting odds of it closing; another source was more optimistic, but Ellison refused to discuss what he called a “rumor.”) Once the Bari question is resolved, they will engage more seriously with David Rhodes, the former CBS News chief whom the Skydance folks have been courting to return, with Weiss in an advisory role. If Rhodes passes, it’s unclear who they might target, though the new leaders are fans of current CBS News president Tom Cibrowski.

After a visit to CBS Sports, Ellison, Shell, Cardinale, TV chief George Cheeks, and C.O.O. Andy Gordon faced about 30 reporters for a Q&A free-for-all. I wasn’t there—the L.A. press moment is next week and presumably will focus more on the studio business—but I got a transcript of the key parts, and I’d say Ellison stayed very on-message, illuminating a few priorities but punting on most of the politically sensitive topics like Trump and Colbert and South Park. When combined with his “Letter From the CEO,” he at least articulated a bit more about how he thinks he can clean up the current Paramount mess, and what he kinda means when he says he wants a “tech-forward company that blends the creative heart of Hollywood with the innovative spirit of Silicon Valley.” That messaging has always sounded to me like corporate spin, designed mostly to trick Wall Street into envisioning—and, eventually, valuing—an old-fashioned media company like a tech player. “We’re not going to be afraid of technology; we’re going to embrace it,” Ellison said today. “Unless you can build a tech product that is truly competitive with what’s coming out of Silicon Valley, you can’t compete,” he added. Basically he wants to leverage the tech prowess of his father’s Oracle and a similar NorCal perspective to improve the Paramount streaming products and lower the cost of content production. Great. I think most legacy studios have that goal, but maybe Ellison can execute better. And the Paramount+ interface and recommendation algorithm currently sucks. But Ellison is still short on details beyond suggesting he would embrace A.I. and put Par+ and Pluto TV on the same tech platform—and that last part is smart but not really new. Paramount has been planning a unified tech stack since at least 2023, according to one source who has worked on it. That process was backburnered as the previous regime explored possibly selling Pluto TV and/or exiting Paramount+ via a joint venture. Side note: Was anyone else amused by Paramount’s final earnings letter last week from the three outgoing co-C.E.O.s we are not, once and for all, calling the Pep Boys? Cheeks, plus the exiting Chris McCarthy and Brian Robbins, claimed to have “transformed” Paramount into a “streaming-first company.” Really? These are the guys, after all, who presented a strategy in 2024 to explicitly offload much of the direct-to-consumer business to partners. Remember, at the shareholder meeting, McCarthy declared they were “exploring options with both S.V.O.D. players and the leading technology platforms with the goal of forming a joint venture or a long-term strategic partnership to maximize our momentum and take advantage of our combined strengths.” Not “marketing bundles,” he insisted, but rather “a deep and expansive relationship” with a global player like Amazon. Yet now, on the way out, and after Paramount+ grew its subscribers to 77 million and hit profitability almost despite the leadership’s efforts to half-ass the product, the company is “built to thrive in the streaming future.” Okay…

A MESSAGE FROM OUR SPONSOR

In “Severance,” Mark S. leads a team at Lumon Industries, whose employees have undergone a severance procedure that surgically divides their memories between their work and personal lives. This daring experiment in “work-life balance” is called into question as Mark finds himself at the center of an unraveling mystery that will force him to confront the true nature of his work … and of himself.

"Severance" is the most nominated series of the year, receiving 27 Emmy Nominations including Outstanding Drama Series.

Watch Now on Apple TV+

Anyway, I think we’re all still seeking more clarity on Ellison’s we’re-a-tech-company-now messaging, so I reached out to Erik Hodge at Raine, one of the investment bankers on the transaction. What, exactly, is Ellison talking about? “The fact that he is interested in virtual production, that he knows what A.I. can do for parts of the business as specific as localization, that he sees the value of a unified tech platform for the enterprise, and that he is paying attention to his internal ad tech as a means of increasing yield across linear and digital—the fact that he is even talking about those things on day one of ownership sets him apart from his peers,” Hodge told me. “It’s a fundamental change in how to look at a media company with a lens of technology.”

Meanwhile, Shell also shed some light on the plan for all those zombie cable networks eking by on Ridiculousness and Futurama reruns. Tellingly, Ellison’s letter does not mention the cable assets at all, which is curious considering they generate so much of Paramount’s profits. Many, myself included, thought the company might follow NBCUniversal or Warner Discovery in floating away those melting ice cubes. But Shell says likely no. “Our cable portfolio, frankly, is not that big a part of our company, certainly not as big as Versant is and was within NBC, and not dramatically like it is within Warner,” he said today. “So, things that might make sense for them as far as spin, I don’t think really make sense for us.”

Sales of individual networks seem more likely. Gordon, when pressed on the spinoff issue, specifically name-dropped Comedy Central and MTV as having potential value as “brands” for Paramount to partner on or sell to someone else. “There’s probably a place outside of the linear world where these brands exist and can be invested in and flourish,” he said. And just like NBCUniversal decided to keep Bravo in its TV divorce, Shell cited Nickelodeon as a cable brand that they want to put money into. Judging by the media coverage today, the politics of the sale aren’t going away just because the deal closed. When pressed on the supposed “side deal” that Trump claims will require CBS to run up to $20 million in P.S.A.s on his behalf, Ellison responded with “We are not going to politicize anything today.” That’s basically the press conference equivalent of the Naked Gun “Please disperse! Nothing to see here!” meme. The press won’t let this go away. Trump won’t let this go away. If Ellison continues to dodge the side deal questions, we’ll all need to start monitoring the network for middle-of-the-night pro-Israel or anti-Rosie O’Donnell commercials. Having said that, even if there isn’t a side deal, it’s easy to see why Ellison chose not to push back publicly against the president. Sure, the Paramount deal is done, but F.C.C. chair Brendan Carr is still “investigating” the supposed bias issues at the company. There remains very little upside in poking the administration—consider this week’s embarrassing, Veep-like spectacle of Apple C.E.O. Tim Cook bestowing a shiny gold trophy on Trump in the Oval Office—especially since all signs point to Ellison and his advisors wanting to buy more companies. “If you look at the board of directors, you have one of the most deal-savvy groups of professionals out there,” Hodge noted during our chat. “I think that’s noteworthy.” Yes, it is. The board includes Cardinale and Gordon and John Thornton, all from RedBird, who have built careers on big transactions, and there’s Silver Lake’s Justin Hamill, who, until this year, was the global chair of M&A at Latham & Watkins. Others too. The story of Paramount, a Skydance Corporation, as it’s being called, is just beginning, and it will likely be joined by other Skydance Corporations. Whether that turns out to be TikTok or Warner Bros. or a gaming studio or all three, the government will likely be involved in that process. So enduring periodic press grillings rather than antagonizing the president by calling him a liar is likely the lesser of two evils. And that’s if there’s no side deal. In the meantime, Paramount employees must wait a bit for the expected mass layoffs, which will likely happen by the end of the quarter and, I’m told, occur all at once, rather than the rolling massacre we’ve endured at Warner Discovery and Disney. The $2 billion in promised cuts will be deep, though the Paramount team is saying “efficiencies” will allow them to invest in some areas while cutting or decimating others. That’s the single most frequent question people around town ask me when it comes to Paramount: How can they cut so much while still claiming to invest so freely? It’s not clear, but the answer began playing out today.

See you Monday, Matt

Got a question, comment, complaint, or an awards season movie you want me to see early? Email me at Matt@puck.news or call/text me at 310-804-3198.

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