David Ellison discusses savings, growth, tech stack and AI amid Paramount's move towards WBD

David Ellison mentions that the savings from the Skydance-Paramount merger are expected to surpass the initially estimated $3 billion, with $2.5 billion projected by year-end.

"We are currently integrating Paramount+, BET+, and Pluto into a single tech framework, which should be completed by the second quarter of this year," the Paramount CEO explained at a conference.

The tech framework mentioned by Ellison in his mergers and acquisitions discussions refers to the integration of various technologies from software and coding to data storage systems that collaboratively construct and support an application. Having multiple versions is both unnecessary and expensive.

“Looking ahead to Warner Bros., we acknowledge the efficiencies and the ability to manage the company more effectively, significantly enhancing cash flow,” he expressed at the FII Priority Summit.

The event organised by the nonprofit Future Investment Initiative Institute took place on Friday. Par published the transcript of Ellison’s address in an SEC submission today.

The firm expects a minimum of $6 billion in expenses reduction through its planned acquisition of Warner Bros. Discovery, which both entities plan to finalise in the third quarter.

The industry is anticipating substantial job reductions, which Ellison has downplayed, emphasising that the newly formed company will not only operate more effectively but also expand.

“Over the past six months since joining Paramount, we increased the film schedule from eight to 16 movies, all of which will be launched exclusively in theaters this year. We've approved 11 new shows for Paramount+ and introduced the UFC as well as the [UEFA] Champions League to our platform. We’ve made substantial investments in content. Thus, the narrative suggesting you cannot manage the company more effectively while growing is fundamentally flawed.”

Par-WBD will boast a combined revenue of $69 billion, $18 billion in EBITDA, and more than $10 billion in cash flow, noted Ellison, “all while investing upwards of $30 billion in content.”

They will also confront approximately $80 billion in debt, a daunting figure that raises concerns among many Hollywood insiders and some Wall Street experts.

Ellison typically addresses broad topics like job cuts and debt, and his FII participation included a friendly conversation with Gerry Cardinale from RedBird Capital, a key investor-partner in Paramount. Ellison emphasised the advantages of being an owner-operator.

“We take great pride in being the leading shareholders in Skydance. We hold the largest shares in Paramount, and we will be the principal shareholders of the merged Paramount-Warner Bros. Discovery post the deal finalization. This alignment of interests ensures profound, long-lasting success. Decisions are made not just for the next couple of quarters but for the upcoming five years, ensuring sustainability that lasts through the ages. This is what excites us and drives our ambitions.”

Ellison, whose father and main business patron is Oracle co-founder Larry Ellison, frequently emphasises the blend of content and technology yet to fully integrate into traditional media.

He believes Par possesses the expertise needed due to his family's tech connections. This extends to AI, which he described as a “remarkable tool for creativity in the community.”