Paramount Global is struggling financially, but artificial intelligence (and a new merger) may solve its problems.
Paramount Global, one of the world’s largest legacy media companies, could be about to radically change. The entire American film and TV industry, from giants like Disney and Netflix to small production companies, is silently going through a revolutionary time that could change entertainment forever.
Like many of its peers, Paramount Global is struggling financially, trying to thread a balance between an unprofitable but popular streaming service and unclear theatrical and TV release windows. Global revenues in 2023 came in at $29.7 billion, a 1.7% decline from 2022. Paramount’s debt rating keeps worsening as its stock price tumbled 16.88% this year.
But Paramount may just have found a solution to (almost) all its problems. Skydance Media, a Santa Monica-based production company, made an offer that Paramount could not refuse.
Skydance Media’s CEO and founder is David Ellison, son of the world’s fourth richest man Larry Ellison. The latter is the co-founder and chairman of Oracle, a company focusing on AI-based cloud services.
Oracle is one of those Silicon Valley giants that survived through dozens of tech revolutions, shaping the digital world as we know it. The transition to AI services lasted for an entire decade but was eventually successful.
The Ellisons’ plan
As reported by several US news outlets, the Ellisons plan to plunge Paramount into the future, exploiting its potential as a communication and entertainment company but solving its aging problem.
Skydance’s offer involves it becoming the majority (or significant minority) shareholder of Paramount+. David Ellison would likely have a major executive role in the new board, as Skydance would bring in significant new equity.
At the moment, the Redstone family owns roughly 77% of Class A shares in Paramount. According to CNBC, Skydance would own between 45-51% of Paramount Global following the merger.
Paramount Pictures is a historic Hollywood major, with a catalog full of timeless classics from “The Godfather” to “Forrest Gump”. Throughout its century-long history, Paramount changed many faces, becoming an international telecommunication company.
Today, it owns the cable news channel CBS, together with two streaming services: Paramount+ (subscription-based) and Pluto TV (ad-based).
If the deal with the Ellisons were to fall through, would give access to Oracle’s artificial intelligence technology. The use of AI in the entertainment sector was the source of the biggest debate surrounding this new technology.
Last year, Hollywood screenwriters and actors went on a strike over low pay and fear of AI stealing their jobs. Eventually, Hollywood majors agreed to protect film workers against AI, but regulations at this early stage may be useless for future developments of the technology.
