Skydance Targets $2 Billion-Plus in Cuts After Paramount Merger
Some key excerpts:
Skydance executives who are set to take over the owner of CBS, Nickelodeon and MTV have identified at least $2 billion in cost cuts that can be made at the company, much of it from its linear media operations, according to Jeff Shell, who is slated to be named president of the new entity.
David Ellison, the Skydance chief who will become the CEO of a “new” Paramount, put a spotlight on his plan to boost the media conglomerate with content from his entity, which controls certain rights to top Paramount franchises like “Top Gun” and “Mission: Impossible.” He envisioned a new company that combined Skydance’s animation business with that of Nickelodeon, and CBS Sports with Skydance’s sports documentary division.
Shell indicated a willingness to sell certain non-strategic assets — which he did not immediately identify — and suggested the company hoped to add to the CBS Sports portfolio, which boasts the Masters golf tournament, Big Ten football, part of the NCAA March Madness tournament and NFL rights.
In time, Shell suggested, many of the streaming services were likely to be bundled together. The current streaming experience “‘is not great,” he said, with consumers forced to pay high fees to continue to receive most services. The current consumer experience “is not sustainable,” he added. “I think you already see the bundling process starting to happen,” he said, because consumers may have favorite media brands, but still crave a unified experience. “If you’re in that bundle you’re going to win, and if you’re not, you’re going to be in trouble.”
It feels like a tale as old as time, that a company gets bought by another and immediately selling off assets; and I would very much like to stop hearing it.
While sometimes spending does need to be cut, cutting assets immediately after an acquisition usually does not maintain the company's health in the long term.
On another note, while I think Paramount/ Skydance is right that the current streaming environment is not amiable to the customer; I find it amusing this is just creating "Cable 2." I know each studio wants to keep all the money for themselves, but it feels ridiculous they are pretending "Cable 2" would be better for customers than a music streaming model, where any streamer can provide any content