David Ellison’s Unfinished Business

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It’s all but official: Paramount CEO David Ellison is going to get his precious. Now that California attorney general Rob Bonta has folded and the 12-state lawsuit trying to stop Ellison’s acquisition of Warner Bros. Discovery has been settled, the long-gestating merger of the two companies could close within the next two weeks. In the end, Ellison pretty much got what he wanted without giving up anything of value. But while Hollywood’s youngest mogul has won the prize he’s been chasing for nearly a year, he now faces the same question Robert Redford asks at the end of the classic Warner Bros. film The Candidate: “What do we do now?”

The biggest and most obvious task ahead will be making this marriage work on a financial level. Massive layoffs are a given: Paramount has made it clear cost-saving “efficiencies” were a key reason it wanted to do this deal, and slashing staff is one of the quickest ways to start bringing down the billions in debt the combined entity will carry. But as sadly predictable as all that chopping will be, far less certain is how Ellison will tackle the many other dilemmas he’ll face on day one of Paramount Warner Bros. (or whatever the new company gets labeled). Here are three of the biggest we’ll be watching:

What happens to HBO Max and Paramount+?

As recently as last March, Ellison talked about the creation of a super-app combining both platforms — but we don’t know if that’s still his plan or, more important, exactly how that might play out. Does HBO Max (or just original-recipe “HBO”) become an add-on to Paramount+? Could the Paramount movie and TV library, plus the Taylor Sheridan collection and next-day CBS content, get blended into HBO Max? Or do we get a new app (please God, no) with fresh branding that houses all of Ellison’s streaming services? Maybe this new “super-app” features different tiers unlocking various Skydance labels: Free gets you Pluto TV and the best of CBS; basic comes with Paramount+ and Max originals like Landman and The Pitt; and a premium tier offers access to everything else, like HBO originals and recent blockbuster movies?

What he does with his two subscription streamers is one of the biggest calls Ellison has to make. Look only at the brand destruction both AT&T and then Discovery brought upon HBO Max/Max/HBO Max through indecisiveness and shifting strategies. Plus you don’t want to give up even a dollar of the revenue Paramount+ and HBO Max currently pull in on their own. What Ellison decides here will also likely be key to solving another one of his other big problems, namely … 

Who runs streaming: Casey Bloys or Cindy Holland?

If Paramount+ and HBO Max were to somehow continue as fully separate businesses, the headache of what to do with their top execs might have an easy cure: Ellison could let both of them run their respective platforms and have each report directly to him. There might still be times when the two divisions squabble over things like who gets custody of the next NKPSD (Nicole Kidman Premium Streaming Drama), but it wouldn’t be that different from the days when big conglomerates kept multiple labels (think New Line Cinema in the late 1990s and early aughts, before it got folded into Warner Bros. circa 2008). Ellison has already vowed to keep Paramount Pictures and Warner Bros. Pictures distinct entities, so in theory he could do the same in streaming.

But while peaceful co-existence looks good on paper, the brutal reality is that there will almost surely have to be a consolidation of streaming assets into one business unit and, at some point, one platform. Ellison already said as much in March, right after he beat Netflix for the honor of owning Warner Bros. Given the economics of streaming now (not good!), it’s all but impossible to imagine a scenario where the two platforms exist exactly as they do now. And as we noted last spring, the mountains of debt the combined Paramount Warner Bros. will be carrying is going to require massive cost-cutting. Eventually, there’s going to be some sort of combination, and when that happens, Ellison will likely pick a single exec to run it: Putting two people in charge of streaming just doesn’t make sense. Likewise, even if the full integration of Paramount+ and HBO doesn’t happen for another couple years — though a bundle of the two platforms will probably be in place before Black Friday — keeping two separate streaming units running at full steam would be both a waste of money and confusing for talent reps in Hollywood, who wouldn’t be certain which platform or exec would eventually emerge as the center of the new company’s digital universe.

This is why the conventional industry wisdom for months has been that Ellison will eventually have to choose between Bloys and Holland for the top job. The smart money has always favored Bloys — Wall Street would almost surely prefer that outcome, given his track record overseeing HBO — but Ellison has also been unpredictable when it comes to staffing decisions. (See Weiss, Bari.) Either way, this is one call Ellison might want to make ASAP.
 

How quickly will his news kingdoms unite — if at all?

It seems likely this deal will close before the midterm elections. If Ellison really does plan to give controversial CBS News editor-in-chief Bari Weiss a key role at the cable-news giant, as his critics fear, it would make so much more sense for him to hold off until after the midterms. Installing Weiss immediately, in the heat of campaign season, would (rightfully) bolster the idea that Ellison is shifting his news divisions to the right in order to satisfy Donald Trump and his minions. You can argue that narrative will take shape no matter when such a call was made, but a delay would at least prevent Ellison and his megacorp from becoming an even bigger talking point in the closing weeks of the election. By contrast, if Weiss is not getting a promotion, Ellison would be wise to say something the minute the deal is officially closed, heading off speculation about CNN’s future and preventing possible talent defections at the network.

This also feels like a good place to say what by now should be obvious to Ellison, if it wasn’t a year ago, when he first installed her at CBS News: Weiss is simply not qualified to run an organization as big as CNN, and putting her in charge of it and CBS would be a travesty. Instead of doubling down on a bet that was clearly made in part to curry favor with Donald Trump and his administration, it would make much more sense for Ellison to wait a few months, keep track of every new ratings low at a CBS News property, and use those declines to spin a decision to remove Weiss from her current role. Then, if Ellison is lucky, he can convince Jeff Zucker to return to TV news and serve as the head of a new CNN-CBS superteam. Donald Trump might not be happy, but Para Bros. staffers and shareholders would be delighted.