Larry Ellison’s Ambitious Plan to Revitalize CBS and Paramount Global

Larry Ellison, the founder of Oracle and a tech tycoon with an estimated net worth of $155 billion, is set to take control of Paramount Global. This move is part of a larger strategy to revitalize CBS and its owned stations, along with other assets under the Paramount umbrella. The plan, which has been outlined in a filing with the Federal Communications Commission (FCC), hinges on Ellison assuming control of the broadcast licenses. This ambitious venture involves multiple corporate entities, including Redbird Capital’s Gerry Cardinale, who will collaborate with Ellison to bring new life to the struggling media giant.

The plan is contingent on government approval, requiring both an antitrust review and FCC approval to transfer the CBS broadcast licenses. The filing meticulously outlines the deal and the individuals involved, emphasizing that Ellison’s companies do not currently own any businesses with broadcast licenses. This ensures there will be no reduction in competition within the media landscape. Ellison’s companies will provide the majority of the funding for the deal, thereby giving them significant voting control over the new entity, dubbed ‘New Paramount.’

One of the key aspects of the revitalization plan is substantial investment in both CBS and its local stations. According to the filing, CBS and its owned stations are among the company’s strongest and most stable assets. The new company aims to leverage this stability by improving the balance sheet and making strategic investments in CBS’s national and local news efforts. This includes ensuring the availability of live sports and highly rated entertainment programming for viewers, which are crucial for maintaining CBS’s competitive edge in the broadcasting industry.

Another critical component of the plan is enhancing the digital presence of CBS stations. In today’s rapidly evolving media landscape, a strong digital footprint is essential for delivering important local and national news. Jeff Shell, who is slated to become president of the new company, referred to CBS as a ‘crown jewel’ asset during a recent conference call. While there may be changes in the management of CBS to improve cash flow, the overall vision for the asset will remain consistent. CBS will continue to be an integral part of the company’s future plans.

David Ellison, Larry’s son and the founder of Skydance Media, will play a significant role in this transformation. David has already demonstrated his prowess in the media industry with successful projects like ‘Top Gun’ and ‘Mission: Impossible.’ His strategy of creating sequels to popular content has proven effective in appealing to audiences. Now, with the backing of his father, David is poised to lead Paramount into a new era of growth and innovation. The merged entity will include CBS and its news operation, adding an interesting dynamic given the profitability of news organizations like Fox News, which is known for promoting conservative causes.

Shari Redstone, the current chair of Paramount Global, will receive a substantial severance package as part of the deal. Reports indicate that she will receive $180 million in severance and other benefits, in addition to millions from the sale of her stock in National Amusements to Skydance Media. Redstone holds a 20% stake in National Amusements through two trusts in her name. The acquisition by Skydance will also involve paying off obligations, including a $70 million severance package for Redstone and an unfunded pension liability of $110 million.

The financial backing for this acquisition is substantial, with Larry Ellison contributing significantly to the $8 billion bid to acquire Paramount. Pinnacle Media, Ellison’s family investment vehicle, will own 77.5 percent of Redstone’s voting interest, while the remaining portion will go to an entity affiliated with Redbird Capital Partners. This complex web of companies and financial maneuvers underscores the scale and ambition of the Ellisons’ plan to revitalize Paramount Global. Despite the public nature of Larry’s financial backing, his exact role in the corporate hierarchy was not widely known until recently.

The deal also involves a transfer of ownership disclosed in an FCC filing, as it includes the transfer of CBS’s 28 local TV stations. The Skydance Group has filed an application with the FCC to approve the transfer of control of television broadcast licenses. Bloomberg first reported on the filing and the deal between Skydance, Redbird, National Amusements, and Paramount Global. The influx of capital and the expertise in broadcasting, media, and technology that the Skydance Group brings are expected to revitalize Paramount’s over-the-air television broadcasting services.

As the Ellison family and Redbird do not have interests in other TV broadcast companies, there will be no decrease in competition or other negative effects. The FCC is expected to approve the deal as it is deemed to be in the public interest. Edgar Bronfman Jr. and an investor consortium made a last-minute bid for Paramount but ultimately withdrew, clearing the way for the Skydance-Redbird deal to move forward. The deal is expected to close in the first half of 2025, marking a significant milestone in the history of Paramount Global.

David Ellison will become the CEO of the combined Skydance-Paramount entity, with Jeff Shell, ex-CEO of NBCUniversal, becoming president. Ahead of the deal closing, Paramount has announced major layoffs as their TV and film businesses have seen revenue declines. The company is cutting 15% of its US workforce, or around 2,000 jobs, by the end of 2024. These layoffs are part of broader efforts to reduce yearly costs by $500 million, reflecting the challenges and opportunities that lie ahead for the newly formed entity.

Larry Ellison’s involvement in the media industry is not limited to Paramount. He also contributed $1 billion to Elon Musk’s purchase of Twitter, aligning himself with another high-profile media venture. Both Ellison and Musk hold conservative ideologies, with Musk publicly supporting Donald Trump and Ellison allegedly participating in discussions about the legitimacy of the 2020 election. This political alignment adds another layer of complexity to Ellison’s media ambitions, particularly as he navigates the regulatory landscape and public perception.

In summary, Larry Ellison’s plan to revitalize CBS and Paramount Global represents a bold and ambitious effort to reshape the media landscape. With substantial financial backing, strategic investments, and a focus on enhancing both traditional and digital broadcasting capabilities, the new ‘New Paramount’ aims to preserve and enhance the legacy of CBS while adapting to the challenges of today’s media environment. As the deal moves forward, all eyes will be on the Ellison family and their ability to deliver on this transformative vision for one of America’s most iconic media companies.