Editor’s note: This story was originally published on April 23, 2024. It has been updated as of July 8, 2024.
Skydance Media CEO David Ellison may be able to withstand rolling a plane more than one time per second. But is the producer and part-time daredevil flier ready to take the reins of Hollywood studio Paramount Global?
Wall Street was not initially so sure. But on Sunday, Skydance Media reached an $8 billion cash and stock deal to merge with Paramount and acquire Shari Redstone’s National Amusements, which controlled about 77% of Paramount’s Class A voting stock.
Ellison, the son of mega-billionaire Oracle CEO Larry Ellison, has a passion for aerobatic flying and started out as an actor. Following a number of movie missteps, in 2010 Ellison launched Skydance, a production company that has bankrolled a series of box office and television hits such as “Top Gun: Maverick,” “Mission Impossible,” the JJ Abrams “Star Trek” films, “Jack Reacher” and “Grace and Frankie.”
Now Ellison finds himself in the pole position as Paramount Global’s new CEO. He and president Jeff Shell laid out their vision on Monday, July 8 to turn the company from a struggling media conglomerate into a technological leader in the entertainment space.
Wall Street had initially remained skeptical about Skydance’s all-cash bid to take control of Paramount through Redstone’s National Amusements’ majority stake. The initial proposed offer was controversial with shareholders because Redstone stood to gain the most from the sale. To assuage investors’ concerns, Skydance revised the offer multiple times to sweeten the deal for minority shareholders.
There have been questions, too, about whether the 41-year-old Ellison is ready to oversee the Paramount assets, which include film and TV studios, CBS and the streamer Paramount+.
“I guess that’s the question,” one Wall Street insider told TheWrap. “Has he grown up enough?”
The insider added that thrill-seeker Ellison has been “willing to take some pretty big shots at things and big franchises…. that’s good because I think one of the issues with [previous] management is that they’ve probably been felt to be too incremental.”
Ellison pushed for 10 years to make the sequel “Top Gun: Maverick” with Tom Cruise, explaining, “Tom was very clear that he was not going to make a sequel until he thought the screenplay and the story was worthy of that.”
The assumption has been that Redstone favored Skydance because it is a Hollywood player and would be more likely to keep Paramount’s sprawling assets together, rather than to sell the company off in pieces, as private equity buyers tend to do.
A representative for Ellison and Skydance declined to comment to TheWrap for this story.
Analysts see Paramount’s new management doubling down on trying to make Paramount+ profitable, possibly at the expense of the production side of the business.
“The single biggest question is how you can run this company more efficiently?” media analyst Rich Greenfield of LightShed Partners told TheWrap. “How do you get more people to use the streaming service at this point, given how far behind they are? It is not clear that anyone can achieve that.”
Greenfield added that “a lot of investors were hoping that whoever took over Paramount would shut that [streaming service] down and now it’s pretty clear that the focus is on building Paramount+ into a real player.”
On July 8, Ellison and Shell said they would “rebuild” the Paramount+ platform to increase time spent, offer subscribers improved recommendations and reduce churn.
TheWrap reported they also plan to utilize artificial intelligence to “turbocharge content creation capabilities” and lower costs, leverage Skydance Media and Paramount’s combined portfolio of animation and sports content and to explore potential partnerships and content licensing opportunities.
From trust fund scion to Hollywood mogul
An avid aerobatic fan, Ellison learned to fly planes as a teenager and seems to be a born risk-taker. He first dreamed of being on screen, but founded Skydance at age 18 after accepting he was a “terrible actor.”
Ellison and his sister Megan Ellison, who is also a filmmaker, grew up with their mother Barbara Boothe on a horse farm in Woodside, Calif., in the Bay Area. He credits his mom, who divorced his tech mogul dad when he was three, for his and his sister’s love of film. She took them to the cinema every weekend.
When Ellison was 13, his father suggested he learn to fly, and he became a licensed pilot in aerobatics and commercial aviation, competing in air shows from age 17. He can apparently roll a plane 420 degrees a second — more than one roll per second. He and his father reportedly would stage dogfights over the Pacific in two-seat monoplanes. He has two planes in a hangar in Malibu, and a distinctive silver Ferrari.
His father once tried to import a decommissioned Russian MiG-29, but the U.S. government refused. “It’s considered a firearm,” the elder Ellison told The Guardian, “but theoretically you could rearm it and take out a couple of cities.”
The Oracle founder said he “must have passed on the risk-taking gene” to his son, who has said he wanted to be a pilot from age two.
Ellison, who is worth $141.7 billion and is the fifth-richest person in the world, according to Forbes, set up trusts for his children with stock in Oracle and then NetSuite, a cloud-based software company. This made both David and Megan billionaires and gave them creative freedom.
David Ellison studied film at the University of Southern California but dropped out to take an acting role in the $60 million film “Flyboys” starring alongside James Franco. The 2006 film bombed, making less than $18 million at the box office.
Once in Hollywood he also financed a series of projects that tanked, The Hollywood Reporter reported.
Hollywood high-flier Ellison benefited from the business and deal-making skills of his dad. He also sought guidance from powerful friends including entertainment mogul David Geffen and Apple co-founder Steve Jobs, and Hollywood super-lawyer Skip Brittenham, who helped him set up Skydance.
Ellison pitched Skydance to Jobs, who was initially not convinced. “I want you to come back up here and talk about how you guys are going to aspire to make movies and tell stories better than anybody else, because that’s what we did at Pixar,” Ellison said Jobs told him on Kara Swisher’s “Sway” podcast, noting, “It very much changed the trajectory of the company.”
The elder Ellison also heavily financed his son’s movie career. “He gave me an incredible opportunity by believing in me in the beginning,” Ellison told Swisher. “And we definitely talk about work constantly and work together constantly. But he’s been an incredible mentor and guide throughout all of this.”
Ellison tapped into his vast fortune to support his new Hollywood career, a move that Forbes described as “dumb money.”
Ellison decided to found Skydance Media in 2006. He also took on further small acting roles, including appearing in the golfing comedy “Hole In One”, where he met his wife Sandra Lynn Modic.
He said his “turning point” to quit acting and focus on producing came in 2011, when “Twilight” star Taylor Lautner dropped out of Ellison’s movie “Northern Lights,” a film that he co-wrote and planned to co-star in. Lautner felt it was a “conflict” for a film’s financier to also appear on screen, The LA Times reported.
“Everything I’ve done has helped me to realize producing is all that I want to do,” Ellison also said.
That same year, Megan Ellison founded Annapurna Pictures, the producer of critically acclaimed films like “Zero Dark Thirty” and “American Hustle.” More recently she has shrunk away from the limelight. A source with knowledge of the Ellison family said the siblings remain close but are busy with their separate projects.
And Ellison turned out to be not dumb. He struck a deal with Paramount and the funds got him behind big-budget titles including “Mission: Impossible,” “World War Z,” “Star Trek” and “G.I. Joe: Retaliation.” He worked with Cruise for 10 years to make “Top Gun: Maverick,” which grossed $1.5 billion worldwide.
Another “silver-spooned movie enthusiast?”
The deal gives Ellison control of the movie studio and a portfolio of assets including CBS, the BET, MTV and Nickelodeon cable channels and a national movie theater chain. But he and Shell have made clear that asset sales are still on the table.
The Ellisons will bring in technological and creative expertise from Skydance’s own existing management team, as well as Shell, who joined RedBird following his ouster as NBCUniversal CEO, the individual said.
But some investors had opposed the deal. Matrix Asset Advisors’ David Katz, whose firm owns over 350,000 Paramount shares, previously called the proposed deal “suboptimal” and “detrimental,” arguing in a letter that it prioritizes Redstone over all other shareholders. A Reddit investor community that collectively owns 1 million shares called the bid in their own letter a “slap in the face.” And in a separate letter, Blackwood Capital Management dismissed Ellison as “yet another silver-spooned movie enthusiast” who would “run our entertainment company into the ground.”
In April, Paramount stock sunk to $10.12 per share, down nearly 30% this year from $14.40, a drop Ariel Investments CEO John Rogers Jr., whose firm owns a 1% stake in the company, blamed on Ellison and Skydance.
“The market is telling everyone that no one believes that David Ellison can do something that’s good for all shareholders in that the stock has traded so poorly, it’s gone down dramatically after all the rumors started. It’s highly, highly, highly unusual,” Rogers told TheWrap in an interview at the time. “To have the stock continue to make new lows shows there’s no appetite for this transaction.”
Wall Street had urged Paramount’s independent special committee to consider Apollo’s offer to buy the entire company, arguing it would be a better deal for all shareholders.
On the July call the day after the deal landed, Ellison outlined his vision.
“The key thesis behind this transaction is our desire to inject Skydance as a pure play content company, to double down on Paramount’s prowess as one of the world class storytelling enterprises and also ensure the company is positioned to be able to expand into a tech hybrid to be able to transition to meet the demands and needs of the evolving marketplace,” Ellison said.
