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In 1994, when Sumner M. Redstone bought Paramount Pictures for about $10 billion, the equivalent of about $22 billion today, he did more than just take over a company. He ascended a cultural throne.<\/p>\n
Studios like Paramount \u2014 founded in the 1910s, operating soundstage complexes and controlling vast film libraries \u2014 were valuable businesses on the verge of hitting a mother lode: the DVD. Perhaps more important, however, they gave their owners a precious identity as certified members of the cultural elite.<\/p>\n
Movies still towered above everything. Top ticket sellers in 1994 included touchstones like \u201cThe Lion King,\u201d \u201cSchindler\u2019s List,\u201d \u201cInterview With the Vampire,\u201d \u201cMrs. Doubtfire,\u201d \u201cPhiladelphia,\u201d \u201cSpeed\u201d and \u201cPulp Fiction.\u201d In 1995, when \u201cForrest Gump\u201d \u2014 a Paramount release \u2014 won the Oscar for best picture, more than 48 million Americans tuned in to watch.<\/p>\n
Those days are over.<\/p>\n
On Sunday, the Redstone family reluctantly relinquished Paramount, passing the studio to David Ellison<\/a>, the tech scion behind a 14-year-old entertainment company called Skydance. If the complex deal<\/a> closes, Mr. Ellison and his backers, which include RedBird Capital Partners, will spend roughly $8 billion on a collection of assets that include Paramount, CBS, two streaming services and a portfolio of cable networks, such as MTV, Nickelodeon, BET and Comedy Central.<\/p>\n<\/div>\n<\/div>\n Considering the movie studio alone was worth $22 billion in 1994, it was not exactly a celebratory moment in Hollywood. Rather, it was another example of harsh reality intruding on a world that still likes to fantasize about recapturing its golden age. (Universal recently renovated its lot, adding a sign over one of its entrance gates that reads, \u201cWelcome all who change the world.\u201d)<\/p>\n Sure, Mr. Ellison, 41, now ranks as a bona fide Hollywood mogul. But what does that even mean in 2024? His ascendance bears no resemblance to the robber barons like Mr. Redstone who came before him, partly because there is precious little left to rob.<\/p>\n<\/div>\n<\/div>\n With a few exceptions \u2014 notably animated movies \u2014 the box office has been a relative wasteland; Memorial Day weekend was the worst in almost 40 years<\/a>, after adjusting for inflation. Most streaming services have been financial disasters; Paramount+ alone has lost nearly $4 billion since the start of 2022. Metro-Goldwyn-Mayer and 20th Century are little more than logos. Warner Bros. is on its fourth superhero reboot strategy in eight years.<\/p>\n \u201cWe cannot in good conscience encourage you to pursue our profession,\u201d the Art Directors Guild, which represents set designers <\/span>and other film specialists, said in May, when it suspended<\/a> its training program. A recent column<\/a> on Deadline, an entertainment trade publication, described Hollywood \u2014 battered by the coronavirus pandemic, two lengthy union strikes<\/a> and the still-climbing popularity of TikTok \u2014 as \u201csomething postapocalyptic, with zombies and lots of smoking ruins.\u201d<\/p>\n<\/div>\n<\/div>\n Artificial intelligence is threatening jobs, particularly in visual effects and animation. Streaming has made it easier to pirate content<\/a>.<\/p>\n The Oscars have been on life support. This year\u2019s Academy Awards ceremony drew 19.5 million viewers<\/a>, down 60 percent from 1995.<\/p>\n In contrast to the gilded Redstone glory days, the era that is beginning at Paramount will be defined by Mr. Ellison\u2019s skills as a fix-it man. On Monday, he acknowledged as much, telling analysts on a conference call that he intended to remake the collection of assets into a \u201ctech hybrid.\u201d He would do that, he said, by drawing on his experience as a Skydance producer of movies like \u201cTop Gun: Maverick\u201d and \u201cThe Tomorrow War<\/a>\u201d while tapping relationships in Silicon Valley; Mr. Ellison is the son of the Oracle founder Larry Ellison.<\/p>\n<\/div>\n<\/div>\n \u201cIf you went into a lab and designed the perfect executive for the next-generation Hollywood company, you would literally spit out David Ellison, because he not only can go to a table read, but he can go to the next room and code, too,\u201d Jeff Shell, Mr. Ellison\u2019s top lieutenant at the new company, said on the call. Mr. Shell was previously a chief executive at NBCUniversal, where he was known for shaking up long-held Hollywood business practices, including theatrical release patterns. (Mr. Shell left NBCUniversal last year<\/a> after acknowledging \u201can inappropriate relationship with a woman in the company.\u201d)<\/p>\n<\/div>\n<\/div>\n Gerry Cardinale, founder of RedBird Capital, said Mr. Ellison would turn Paramount into \u201cthe pace car for how these incumbent legacy media businesses will need to be run in the future.\u201d<\/p>\n They were vague on specifics, with two exceptions: Mr. Ellison plans to overhaul Paramount+ while slashing and burning through older businesses to find more than $2 billion in \u201ccost efficiencies and synergies.\u201d (To put that number in context, the company\u2019s previous management team said last month that $500 million<\/a> in cuts were aggressive enough.)<\/p>\n Mr. Ellison has run Skydance as an ultra-lean operation. Larry Ellison has also demonstrated a lack of tolerance for Hollywood largess, forcing an overhaul<\/a> at his daughter\u2019s money-losing Annapurna Pictures in 2018. Annapurna largely exited the movie business and has found success with independently produced video games.<\/p>\n Paramount has endured boom-and-bust cycles before. In the 1960s the studio\u2019s owner, the conglomerate Gulf & Western Industries, very nearly sold a badly struggling Paramount for its real estate value. Talks began with a cemetery that borders the studio. More burial plots were envisioned.<\/p>\n<\/div>\n<\/div>\n