What does the Paramount and Skydance merger mean for viewers?
What does the Paramount and Skydance merger mean for viewers?
The FCC has cleared the way for Paramount and Skydance to merge. What will it mean for viewers?
It looks as if the Paramount Global and Skydance Media merger is finally going to come to fruition. The deal received approval from the Federal Communications Commission on Thursday, which was by far the biggest outstanding obstacle to the merger’s closing. But once all of the I’s are dotted and the Ts are crossed, what kind of changes will customers notice from Paramount? While there is still a lot left to be determined, the companies’ executives have given some clues, so we will try to interpret them for you here.
Key Details:
- Tech and media together: David Ellison has pledged to make the new Paramount more tech-forward.
- NFL changes?: The NFL’s contract with CBS allows it to change its deal with the channel if ownership changes.
- Going south: Viewers should expect biting commentary on the political fallout from the deal to continue.
Speaking to financial bigwigs on Monday, incoming Paramount CEO David Ellison said that a key part of the future for Paramount would be a “symbiotic relationship between art and technology.” Ellison said that he wants the company to become a “tech hybrid,” then repeated his notion that artificial intelligence can be used to improve the content recommendation engine on the Paramount+ streaming service, which he believes would benefit the streamer’s subscribers.
How Ellison’s envisioned AI would differ from the current algorithms that manage content discovery on Paramount+ and every other streaming service is yet to be seen, but it is worth noting that Ellison’s father is tech billionaire Larry Ellison, the co-founder of Oracle.
Another significant area that could impact consumers is in regards to how much content Paramount puts out, as there have been indications that there will be a pullback in that regard following the merger. According to the New York Post, Ellison and incoming executive Jeff Shell say that $2 billion in cost cuts are in line for Paramount, and Ellison specified that linear operations at the company could be at the top of the list to cut back. That could mean less content on channels like Paramount Network or MTV, or perhaps a spinoff of those channels, as has been enacted at Comcast and Warner Bros. Discovery.
Linear channels have been on a slow but steady decline over the past decade as cord-cutting has become prevalent amongst a growing number of consumers. As more viewers move to streaming, advertising revenues decline for broadcast and cable channels, making it increasingly difficult for media companies to justify rolling out full slates of original programming. While the Paramount Network has been the home to the biggest show on cable television in recent memory in “Yellowstone,” it is telling that the vast majority of its prequels and spinoffs have instead been moved to Paramount+. While there are not yet any signs that Ellison is thinking of spinning off the company’s cable channels like Comcast is currently doing, as is Warner Bros. Discovery. However, an intermediary step would be to dramatically pull back the content spend for those channels, making them effectively homes for existing content that has already been paid for, while still accumulating as much as possible in carriage fees.
While it seems inevitable that there will be substantive content shifts at the new Paramount, perhaps the bigger question is whether or not there will be any changes to the largest sports deal in the company’s portfolio? The NFL has a provision in its contract with all of its media partners, including CBS, that allows the league to renegotiate its deal if a channel changes ownership. It is highly unlikely that the NFL will simply abandon CBS, but it could give the league cover to approach other partners about potentially changing their contracts as well.
Ellison’s Skydance Media has partnered with the NFL for a number of years on documentaries and other types of content, so the relationship between the league and Paramount’s new owners is a healthy one. But the league and commissioner Roger Goodell are not known for leaving money on the table. Still, NFL fans shouldn’t anticipate games leaving CBS any time soon, even if it costs Paramount a bit more than it bargained for this early in the new ownership.
For anyone following the news, you know that this merger has been far more controversial than most because of the political implications that have been thrust upon the proceedings. President Donald Trump seemingly put his thumb on the regulatory scales to force Ellison to commit to changes in the types of political dialogue the network engages in. In addition to controversially settling a lawsuit brought by the president over a “60 Minutes” interview with former vice president Kamala Harris during last year’s presidential campaign, Paramount has also agreed to end all diversity, equity, and inclusion (DEI) practices and to employ an ombudsman who will monitor if the political discourse is balanced.
While CBS maintains that it was a financial decision, despite being the highest rated late-night show, the network recently canceled “The Late Show” just days after Stephen Colbert lambasted the company for caving to Trump’s demands. Critics, including Sen. Elizabeth Warren, openly believe that the move was done to appease President Trump in order to get the merger across the finish line. While Skydance has committed to present a “diversity of viewpoints” across the political spectrum, it does call into question the status of hit Comedy Central stalwarts “The Daily Show” and “South Park,” both of which are frequently critical of Trump. “The Daily Show” is riding a 10-year ratings high, and the creators of “South Park” just signed a five-year, $1.5 billion deal with Paramount; so, both shows are likely safe for now, but there are still 3.5 years left in Trump’s term.
One big question that many Paramount viewers likely have is the fate of Taylor Sheridan, whose shows like “1883” and “Landman” have become mainstays on Paramount+ thanks to a rich output deal. It’s not likely that big-time changes are coming to the Sheridan television universe, but if Paramount did decide to make his contract an area for cutting costs, he would likely find a new home almost immediately.
Are there any other changes you can see in the future of Paramount now that it has the FCC’s go-ahead to merge with Skydance? Tell us about them in the comments below!
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