Business
David Ellison is taking control of Paramount. Now the real work begins
Tech scion David Ellison battled hard to get Paramount Global.
The Skydance Media chief executive first made overtures last summer to Paramount’s nonexecutive chair, Shari Redstone, then spent months negotiating and renegotiating a deal acceptable to Redstone, Paramount’s board and the company’s shareholders.
Now that he’s clinched the company through a complicated, multipronged transaction valued at more than $8 billion, the real work begins. Ellison is set to become the company’s chief executive, while former NBCUniversal Chief Executive Jeff Shell will be president (Shell left his old job after acknowledging an “inappropriate relationship” with a colleague).
The legacy media and entertainment company has major challenges Ellison will need to address quickly to get Paramount back on the right footing, once the deal closes during the first half of next year.
Like many entertainment companies, Paramount is facing a decline in theatrical box office revenue as audiences haven’t returned to movie theaters with the same frequency as before the COVID-19 pandemic. Add to that Paramount’s particular woes with its money-losing streaming business as well as its heavy investment in cable networks that face challenges from cord cutting and declining advertising dollars, and it’s clear there is a lot for Ellison and his investors to fix.
“There really are amazing assets in this company,” said Jessica Reif Ehrlich, senior media and entertainment analyst at Bank of America Securities. “They just haven’t been managed well.”
For example, Paramount Pictures’ historic Melrose Avenue studio is valuable, as is Paramount’s broadcast network CBS. Some of the company’s cable networks, which include Nickelodeon, BET and MTV, have prized content and recognizable names. But they’re shells of what they used to be, Reif Ehrlich said.
“Every part of the business is under siege at this moment,” she said. “They really do need to resolve what they will be and have a clear point of view and way to achieve that as soon as possible.”
Paramount’s heavy debt load
First and foremost is paying down Paramount’s debt. Part of the company’s balance sheet problem will be addressed with a $1.5-billion cash infusion from Skydance and RedBird Capital Partners.
Getting Paramount on solid financial footing is key to its future success.
“This is very much about the fact that David Ellison and Skydance have had a 15-year relationship with Paramount,” RedBird Capital founder Gerry Cardinale said in an interview. “So it made it a lot easier to look at a strategic recapitalization, as opposed to just doing a deal.”
Paramount’s three current co-CEOs have already embarked on a $500-million cost-cutting plan that will continue as the Skydance transaction unspools. That plan involves evaluating the sale of certain Paramount assets, potentially including BET, as well as an unspecified number of layoffs. During an investor presentation Monday, Skydance executives said they had identified as much as $2 billion in “cost efficiencies” that would help increase cash flow.
Kenneth Leon, research director at CFRA Research, sounded cautiously optimistic about the plan in a note to investors.
“We think the new company has major opportunities for content production and distribution, but the challenges of competing in today’s disruptive movies and entertainment industry remain,” he wrote.
Cable networks: Asset and liability
It’s no secret that linear television revenue is declining as more customers cut the cord and abandon their traditional cable and satellite packages. But though the financial returns are diminishing, the cable networks are still making money for Paramount. That makes them an important asset to keep managing — strategically.
Last year, Paramount’s TV media segment, which includes CBS and the cable networks, brought in about $20 billion, or 68% of the company’s total revenue, according to its annual report. But that was about an 8% decrease compared with 2022.
Things were slightly better in the first fiscal quarter of 2024, when TV media brought in $5.2 billion in revenue, an increase of 0.7% compared with the same period a year ago.
“The linear business declining is not necessarily a bad story for Paramount,” said Laurent Yoon, senior analyst at Bernstein. “It’s already reflected in the stock price, and it’s not Paramount’s problem alone. There’s not much they can do. They just have to manage the decline.”
During Monday’s investor call, Skydance and RedBird executives touted the value and reach of CBS, noting that the network was a “driver” for the company.
The studio: A new shine on the crown jewel?
As one of Hollywood’s first studios, 112-year-old Paramount Pictures is the crown jewel of the company. That’s certainly how Sumner Redstone, Shari’s late father, saw it.
It has churned out such landmark films as “The Godfather,” “Chinatown” and “Breakfast at Tiffany’s,” while moving into the modern age with franchises like “Top Gun” and “Star Trek.” But the company’s studio business has been a mixed bag of late.
Paramount’s filmed entertainment segment, which includes Paramount Pictures, its animation arm, Nickelodeon Studios and Miramax, brought in about $3 billion in revenue last year, down 20% from the previous year, according to regulatory filings. For the three-month period ending March 31, Paramount’s filmed entertainment sector revenue totaled $605 million, up about 3% from last year.
In some respects, the studio is being hit by the same external forces battering the rest of the entertainment industry — the 2024 box office receipts are not reaching the levels they did last year and fall far short of pre-pandemic levels. But the studio’s creative strategy needs to be rethought, as well as film budgets, said Reif Ehrlich of Bank of America.
Rethinking the studio strategy means leaning into franchises, Shell said in an interview.
“In Hollywood, you really make money when you have big franchises and are able to monetize them, and they really have not done that very effectively at Paramount,” Shell said. “For example, there’s no ‘Top Gun’ theme park ride anywhere in the world.”
If the studio’s finances were optimized — meaning if it cut back on expenses — it could be a $3-billion to $4-billion business with a potential for a 10% to 15% margin, said Yoon of Bernstein.
“Paramount obviously has a great heritage when it comes to moviemaking,” he said. “It feels like they should do better, but they’re not. But it does have the potential to stabilize.”
Ellison also said the Skydance deal would bolster the combined company’s animation capabilities, allowing Paramount to expand its family entertainment business.
Paramount+: The struggles of streaming profitability
The foray into the streaming business has been a costly one for Paramount. The company was late to join the so-called streaming wars, lagging behind competitors Netflix and even Disney, and then spent heavily on the service.
Even so, the company is struggling to add subscribers, leading to about $2 billion in losses for Paramount+ since launch. In the first fiscal quarter of 2024, however, the company’s streaming division reported revenue of nearly $1.88 billion, up 24% compared with a year earlier. The segment’s quarterly loss was $287 million.
Ellison laid out a plan Monday for tech upgrades to the Paramount+ service, including improved ad technology and a better algorithmic recommendation engine that could help reduce subscriber churn and increase users’ time on the platform.
One option currently being explored by the company is a joint venture for the streaming service, Paramount executives have said. Having a partner could help Paramount turn a profit in streaming, Yoon said.
Such a partnership would not be unprecedented. In May, Warner Bros. Discovery and the Walt Disney Co. said they would join together to offer a new streaming bundle this summer that would allow subscribers to access Max, Disney+ and Hulu in the same deal. Separately, Disney, Warner Bros. and Fox are preparing to launch a streaming venture for sports.
“It’s generally believed at this point that Paramount+ could be profitable in 2025, but ‘profitable’ is relative,” Yoon said. “Is it a dollar or is it a billion? They need to make sure the margin increases.”
Business
Walmart’s EV chargers are coming to California with discounts for members
Walmart is rapidly expanding its network of electric vehicle chargers designed for customers to use while they shop.
The network could help fill gaps in EV infrastructure in states with greater need for chargers. Walmart, which has more than 5,000 locations in the U.S. and hundreds in California, says more than 90% of Americans live within 10 miles of one of its stores.
The chargers also offer an incentive for customers to choose Walmart — Walmart Plus members will receive a 10% discount off an average price of $0.46 per kilowatt-hour of energy at the company’s chargers.
Walmart chargers are already available at more than 75 locations in 17 states, with Texas boasting the most charging stations, followed by Florida and Arizona.
Matthew Nelson, Walmart’s director of energy policy, said last week on LinkedIn that the network will soon reach 29 states, including California.
“We are delivering on the promise of affordable, reliable and convenient charging,” Nelson said in his post.
According to Walmart’s website, six charging stations are coming to California soon, though the company did not offer a specific timeline.
The chargers will be installed at stores in Antelope, Brea, Fresno, Stockton, Suisun City and Vallejo.
Most charging sites in California will include eight to 16 fast-charging stalls, said Walmart spokesperson Kelsey Bohl.
The company first announced plans in April 2023 to install its own EV chargers at Walmart and Sam’s Club stores, with a goal of installing thousands of chargers by 2030. Partnering with ABB E-Mobility and Alpitronic, it added 25 new charging sites this past May and six more in June.
“Walmart is building a leading retail-integrated EV fast-charging network, focused on delivering an affordable, reliable and convenient charging experience where customers already shop,” Bohl said in an emailed statement. “Customers can charge while they shop, access stations through the Walmart app they already use, and benefit from affordable pricing.”
The charging stations already available include 612 individual charging stalls using 400-kilowatt chargers. Each stall has a dual charging cord with both Combined Charging System and North American Charging Standard connectors. The standard connectors, designed by Tesla, are smaller and lighter than the combined systems.
The primary way to pay for the chargers is through the Walmart app, but the company is also experimenting with built-in credit card readers to allow those without the app to use the stations.
Customers can check charger availability on the Walmart app. The company said the chargers will be available 24 hours a day.
Business
Waymo reports teen riders for bad behavior and delivers them to the police
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
-
Alabama1 minute agoMac Jones asked who was his craziest teammate at Alabama
-
Alaska8 minutes agoClimate Change Is Helping an Invasive Predator Wreak Havoc on Iconic Alaskan Fish
-
Arizona11 minutes agoArizona man pleads guilty after illegally living in forest for years among ‘1,000lbs of trash’
-
Arkansas16 minutes agoArmy names intelligence facility for Arkansas Tech graduate
-
California23 minutes agoHow California Effectively Legalized an Open-Air Sex Market
-
Colorado26 minutes agoJulian Lewis Says Deion Sanders’ Colorado ‘Wasn’t Really Looking at Defenses Much’ Last Season
-
Idaho31 minutes agoWarhawk Air Museum receives $500K grant honoring fallen Idaho soldier
-
Connecticut31 minutes agoSeveral beaches closed to swimming due to potential bacteria in the water