After a long, complicated slog toward Thursday’s FCC approval, Paramount Global and Skydance Media will now face a number of tricky questions in becoming one company.
While the $8 billion-plus transaction will need a few more days to become official, several strategic dilemmas have already been percolating. Here are the biggest questions the new leadership will have to answer:
Staffers at Paramount already have been staggered by multiple rounds of layoffs, which saw 15% of U.S. employees trimmed in the final months of 2024 and another 3.5% let go earlier this year.
Those reductions, though, were in pursuit of a stated goal to achieve $500 million in cost savings. Execs at Skydance and its financial backer RedBird Capital say they have identified about $2 billion in savings once the two companies come together. That kind of slim-down is likely to affect a large swath of the 18,600 global employees Paramount had at the end of 2024.
When other bidders were jockeying with Skydance, some of them – notably Sony Pictures in partnership with private equity giant Apollo Global – were viewed as worse options in terms of job preservation. Surely, a Sony-Apollo takeover could have threatened the future of Paramount Pictures and its storied Melrose lot, and the duplication on the studio side would surely have left thousands without jobs. And yet Skydance might still end up as less of the savior it was seen as initially, depending on the extent of the cuts.
As it has lost tens of millions of households due to cord-cutting in recent years, Paramount’s linear cable business has become a growing concern for investors. Media industry peers like NBCUniversal, Warner Bros. Discovery and A+E Global Media are in various stages of separating or exploring strategic options for their linear holdings. Now that the Skydance deal is done, the cable portfolio (consisting of brands like BET, MTV, Nickelodeon and the Paramount Network) is likely to leave the fold in some fashion.
Jeff Shell, CEO-in-waiting for the new entity, has been bullish on linear TV’s future thanks to demand for sports. Broadcast and streaming will serve as the two weighted ends of what Shell has called a “barbell” of revenue, separated by the skinny bar of cable networks. “For a lot of us, we thought broadcast would decline along with cable five years ago,” the exec told investors in July 2024. “That simply hasn’t happened.”
Prior to the proposed Skydance transaction, Paramount had explored selling BET (including its studio and streaming service) as well as Showtime. Former CEO Bob Bakish’s falling-out with Paramount controlling shareholder Shari Redstone, which led to his ouster in the spring of 2024, was caused in part by his rejection of a $3 billion offer for Showtime. The premium network wound up being merged with Paramount+ and lost much of its original value.
Despite Shell’s optimism, Naveen Sarma, managing director at S&P Global Ratings, has warned that linear will continue to be an albatross for Paramount. “Maybe Skydance will have a strategy that addresses some of that, but over the next, call it, year or so, year and a half,” he said last December, “we’re going to see a company that’s going to go through a lot of upheaval because of the transaction.”
“I’m not going anywhere, I think,” Jon Stewart said on Monday’s episode of The Daily Show after a particularly long rant about corporate capitulation to “Lord Farquaad.” However, given Paramount’s cancelation of The Late Show with Stephen Colbert (“purely a financial decision,” per CBS), Daily Show staffers are clearly concerned that the Comedy Central show could be next.
The show is currently on a hot streak in terms of ratings and awards nominations, and perhaps more importantly, one would imagine that if such a plan was in the works, Chris McCarthy, one of the outgoing Co-CEOs of Paramount Global, would have made a similar move to his colleague George Cheeks and done it before the deal was approved by the FCC.
It’s clear that late-night is in a bad place but one thing going for The Daily Show is that other than a handful of animated shows (South Park, Andy Samberg’s Digman! and a new season of Beavis & Butthead), Comedy Central doesn’t have a great deal of original programming to satisfy its parent company’s carriage agreements.
“Comedy Central is kind of like Muzak at this point. I think we’re the only sort of life that exists on a current basis other than South Park,” Stewart added.
The merger will bring Skydance Television into the Paramount Global fold, which already includes CBS Studios, MTV Entertainment Studios (which produces all Taylor Sheridan series and Emily In Paris), and BET Studios.
Some consolidation is expected. Led by David Stapf, CBS Studios, which absorbed Paramount TV Studios in 2024, has a distinct broadcast focus as the main supplier of CBS. Paramount Global co-CEO George Cheeks, President of CBS, who is expected to stay put in the post-merger Paramount, is believed to be high on both Stapf and CBS Entertainment President Amy Reisenbach, so CBS Studios is expected to carry on.
It is unclear how exactly the rest of the production units will shake out but Skydance Television President Matt Thunell is poised for a leadership role at a combined TV banner that may carry the Paramount moniker.
As for Sheridan, with Paramount Global co-CEO Chris McCarthy, who oversees MTV Entertainment Studios, set to depart, one of his top lieutenants, Keith Cox, who already works closely with the prolific creator, could become his point executive.
A few key posts have been determined, with Netflix vet Cindy Holland coming in to oversee streaming and Skydance Chief Creative Officer Dana Strong in line to take over Paramount Pictures.
Deadline is hearing of a couple more changes. Sony Pictures Motion Picture Group Co-President Josh Greenstein is rumored to be entering talks for a role in the new corporate hierarchy. Skydance couldn’t go into talk with Greenstein, who is a close associate of Ellison’s, until the merger was approved.
Following the exit of Chris McCarthy, Co-CEO of Paramount and head of MTV Entertainment, Nina L. Diaz, Chief Creative Officer and President of Content for Showtime/MTV Entertainment, is also expected to exit.
Even more than Trey Parker and Matt Stone, who clinched a mega-deal with Paramount this week for South Park, the primary creative voice associated with Paramount Global is Taylor Sheridan. The Yellowstone creator has generated billions in value for the company, though observers both inside and out have wondered about the future of the relationship given the changing of the guard.
Sheridan has been accustomed to working with large budgets, which will surely go under the microscope, as is the case anytime new owners take over. When Discovery merged with WarnerMedia in 2022, JJ Abrams’ lavish $250 million, five-year deal immediately became a topic. The parties wound up agreeing to a shorter, two-year deal in 2024. Any radical change in the Sheridan universe won’t come anytime soon, given that he has several years left on his current deal. But the producer would have plenty of options for a new home down the line, given the aggressive spending by Apple, Amazon and Netflix of late.
One widely anticipated change would see Paramount+ move closer together in the organization with its free, ad-supported sibling, Pluto TV. Such a move would save considerable costs in many departments.
Those kinds of larger shifts aren’t primarily what Holland is being brought in to do. Plus, Pluto doesn’t have original programming. Holland, who teamed with Ted Sarandos to launch Netflix’s original programming more than a decade ago, has already been working behind the scenes to put together a slate. Her main mission will be to give Paramount+ more of an identity. While it has grown to 79 million subscribers, the “news, sports and a mountain of entertainment” marketing handle has been a frustratingly apt description of its uneven assortment of fare.
Skydance CEO David Ellison, who will take the helm of the combined company, has talked about investing in the technology behind P+, which has had a start-and-stop rollout of table-stakes features like auto-play trailers. As advertisers and viewers continue to flock to streaming, though, a rebooted tech stack alone won’t get the service where it needs to be.
Could they? Yes. Will they? Likely not. A clause in the 11-year rights deal CBS signed with the NFL in 2021 could be triggered with the merger, allowing the league to renegotiate given the change in control of the company. Questions had swirled about that doomsday scenario in 2024, with Commissioner Roger Goodell’s ambiguous remarks on the matter seeming to add fuel to the speculation.
Just this month, though, in an interview with CNBC at Sun Valley, ID, where he was attending the Allen & Co. conference, Goodell struck a much more upbeat tone about the status quo. “We’ve had a long relationship with CBS, for decades,” Goodell said. “We also have a relationship outside of that with Skydance. So I don’t anticipate that [opting out is] something that we’ll see. We have a two-year period to make that decision. I don’t see that happening, but we have that option.”
Peter White, Anthony D’Alessandro and Nellie Andreeva contributed to this report.
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