Skydance co-CEOs David Ellison and Ynon Kreiz hosted the company’s first employee town hall on Tuesday following the closing of the Paramount-Warner Bros. Discovery merger.
In his opening remarks, Ellison explained his rationale for acquiring both Hollywood studios — a long-term plan that was three years in the making.
“We didn’t do this deal simply to get bigger. We fought every single day for the chance to build something better, something that has never existed before,” he said. “This industry needs another company with the scale, resources, technology and creative firepower to go toe-to-toe with the biggest players in the world because the competitive landscape has fundamentally changed.”
“We’re not just competing with traditional media companies anymore. We’re competing for people’s time and attention with some of the largest and most sophisticated technology companies in the world – companies with enormous scale, global reach and virtually unlimited resources,” he continued. “So we set out to build a company capable of meeting that moment.”
He also laid out the road ahead, which will include “difficult decisions” to bring the two massive media giants together, “aggressive investment in great storytelling” and embracing new technologies to better compete with rivals.
“We believe in movies. We believe in television. We believe in theatrical exhibition. We believe in great journalism, live sports and shared cultural experiences. And above all, we believe there is enormous value in great storytelling – and that there always will be,” he said. “We are not coming together to manage decline. We are coming together to build for growth. And we are going to be ambitious about it.”
“Very simply, we are here to win. And we’re positioned to win in a way none of us have been before,” he continued. “For the first time, we have the studios, the franchises, the libraries, the talent and the scale, all under one roof, to compete with anyone in the world.”
In his own remarks, Kreiz said Skydance’s goals are to create the “premier Hollywood content engine and home for the world’s leading storytellers,” accelerate the growth of its streaming platform with the best content, leading-edge technology and superior fan experience, and “optimize” its “highly profitable” linear TV portfolio anchored by CBS.
In order to achieve these goals, he said the company would leverage its creative capabilities, talent relationships, production prowess and expansive library of IP, build the “most technologically capable media company” and capitalize on the company’s scale, assets and global reach.
He also emphasized that the combined company needs to work together as one team and be innovative by finding better ways to do things, challenging conventions and developing new businesses, products, games and experiences to engage fans wherever they are. Additionally, Kreiz stressed that Skydance must earn the trust of creative talent, partners and consumers.
“Ultimately, our success will be determined by performance. The market is fiercely competitive, and to achieve success it will demand that we execute at the highest level and work at pace,” he said. “Whatever we’re working toward, whether it’s a new creative milestone, a product launch or integrating two business units, we should be clear about what it is that we’re trying to achieve and hold ourselves to it.”
The $110 billion deal’s closing comes after months of twists and turns, which included a bidding war with Netflix and a legal battle with 12 state attorneys general. The deal was approved by Warner Bros. shareholders and regulators and governments representing 68 jurisdictions globally, including the U.S. Department of Justice and Federal Communications Commission, the European Commission and the United Kingdom’s Competition and Markets Authority.
Paramount also agreed to a settlement that includes commitments to invest $1.5 billion in domestic film and TV production over five years, release at least 30 films a year in theaters and negotiate the distribution agreements for each company’s suite of cable networks separately, among other conditions. It also reached a separate resolution with the Writer’s Guild of America, including a five-year layoff pause at CBS and a $17.5 million health fund contribution.
Additionally, the company agreed to concessions in the U.K. and Europe, including terminating its stake in United International Pictures and commitments to not to combine linear channels with its streaming services, maintain the editorial independence of its news services and children’s networks and provide more funding to Channel 5 to support high-quality news, original children’s programming and drama.
“Let’s be honest – it wasn’t easy to get here. At times it was downright ugly. And at nearly every turn, someone told us it couldn’t be done,” Ellison said. “Every setback, every hard night, every moment when it would have been easier to walk away, was worth it. I’d do it all over again in a heartbeat. Why? Because of what we now get to build together.”
Despite his optimism for the future, Ellison warned that bringing Paramount and WBD together will require “difficult decisions.”
Skydance has projected it will generate $6 billion in cost savings in the first three years of the deal, which will come from areas like merging streaming tech stacks, consolidating its real estate portfolio and layoffs. The combined company is expected to carry around $80 billion in debt.
A Los Angeles County-commissioned study estimates that the merger could impact nearly 4,500 local film and TV jobs alone over the next three years, as well as thousands of indirect and induced jobs from related small businesses.
“There will be changes, and there will be impacts. I’m not going to pretend otherwise. What I can promise you is that we will move through those decisions as quickly and thoughtfully as we can,” Ellison said. “We will communicate directly. We will tell you what we know when we know it. And we will not allow a prolonged integration process to distract us from the reason we brought these companies together in the first place: which is to build the next generation media and entertainment company.”
In addition to Ellison and Kreiz, Skydance’s leadership team includes Andy Gordon, Dennis Cinelli, Makan Delrahim, Dane Glasgow, Rebecca Mall, Melissa Zukerman, Casey Bloys, George Cheeks, JB Perrette, Dana Goldberg, Josh Greenstein, James Gunn, Peter Safran, Mark Thompson and Bari Weiss.
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