David Ellison has wasted no time putting his stamp on Paramount

David Ellison is making good on his promises.

A little more than a month into his tenure as the CEO and chairman of the newly merged Paramount Skydance, Ellison has moved quickly to sign creative and C-suite talent, greenlight new franchises, and strike a billion-dollar deal for the rights to bring a lucrative sport to the company’s streaming service.

Ellison laid out the strategy in an open letter published in early August, when he told investors that Paramount would invest in “high-quality storytelling and cutting-edge technology” to help “define the next era of entertainment.”

That next era could also include the acquisition of Warner Bros. Discovery. On Thursday, CNBC reported that Paramount Skydance is working with an investment bank to make an offer for the company. The deal would likely be a costly one, but would secure Ellison’s media empire.

“They are clearly in a very necessary rebuilding mode, but this will take time and a significant amount of investment,” said Jessica Ehrlich, analyst at Bank of America. “Paramount was starved, literally starved, for so long under the previous several management teams. So, there’s going to be probably a prolonged period of deep investment in content.”

Paramount finally merged with Skydance in early August, a union that was delayed for more than a year as the Federal Communications Commission launched an inquiry into alleged news distortion at Paramount’s subsidiary CBS.

The union was approved less than a month after Paramount agreed to pay $16 million to President Donald Trump to settle a lawsuit he filed against the company over the editing of a “60 Minutes” interview with former Vice President Kamala Harris.

It also occurred the week after CBS announced it was canceling “The Late Show with Stephen Colbert.” At the time, Paramount and CBS executives released a statement saying the cancellation was “purely a financial decision against the challenging backdrop in late night.”

Ellison hit the ground running. Within just a few weeks of the merger closing, he announced a seven-year, $7.7 billion deal to make Paramount the exclusive U.S. home for TKO Group’s UFC mixed martial arts organization starting in 2026. The agreement means UFC will stop its pay-per-view model and events will be available directly to Paramount+ subscribers and, in some cases on CBS. Notably, this deal was nearly as expensive as the $8 billion merger between Paramount and Skydance.

Sports rights will be scarce in the coming years, as companies have already struck deals for broadcast and streaming for many major leagues. Apple is already expected to be the home of Formula 1, and Major League Baseball is waiting until its deals expire after the 2028 season to reorganize its media packages. That means it’s unlikely there will be many other top-shelf sports assets available in the marketplace for Paramount to acquire in the near term.

“UFC is a unicorn asset that comes up about once a decade,” Ellison said in a statement at the time. He described himself as a UFC fan.

UFC is a desirable asset because events take place year-round, meaning fans will keep paying for monthly subscriptions and have less incentive to cancel seasonally than they do with other sports. There are 43 live events annually, consisting of 350 hours of live programming. Paramount is interested in buying UFC’s international rights to pair with U.S. rights.

“They’re looking to change the narrative, and the UFC deal alone is a big splash,” said Robert Fishman, analyst at MoffettNathanson.

And Paramount+ isn’t the only division of Paramount getting new content from big franchises. Ellison secured the rights to develop, produce and distribute a live-action feature film based on Activision’s Call of Duty video game franchise.

Call of Duty has been the bestselling video game series in the U.S. for 16 consecutive years, with more than 500 million copies sold globally, the companies said.

“I can promise that we are resolute in our mission to deliver a cinematic experience that honors the legacy of this one-in-a-million brand,” Ellison said when it was announced, noting that he is a “lifelong fan” of the first-person shooter video game series, having logged countless hours playing the games.

For decades, studios have tried to capitalize on the financial success and cultural relevance of video games, but it’s only been in the past few years that things have clicked. Paramount has already turned Sega’s Sonic the Hedgehog into a billion-dollar movie franchise and will also distribute a new Street Fighter adaptation as part of a three-year distribution deal with Legendary.

Legendary is also no stranger to video game franchises, having co-produced Warner Bros.’ “A Minecraft Movie,” and “Pokémon: Detective Pikachu.” Notably, the third Dune film due out in 2026 and a new Godzilla and King Kong film slated for 2027 are not part of the Paramount deal and will be distributed by Warner Bros. Discovery.

Paramount will also bring the creative team of Matt and Ross Duffer, known in the industry as the Duffer brothers, into the fold in mid-2026. The duo, best known for being the masterminds behind Netflix’s hit “Stranger Things,” signed an exclusive four-year agreement for feature films, television and streaming projects.

Financial terms of the deal were not disclosed. The Duffer brothers’ producing partner, Hilary Leavitt, will also be on board to develop projects for Paramount Pictures, Paramount Television and Paramount’s direct-to-consumer business.

On Wednesday, the company announced it hired Dane Glasgow, who previously worked at Meta, Google, eBay and Microsoft, as Paramount’s chief product officer. The company said the appointment underscores its commitment to technological development alongside its entertainment content push.

Bank of America’s Ehrlich noted that it will take several years for Paramount to ramp up its production. The number of releases from the studio is expected to double. However, there may not be a noticeable financial difference from these changes right away and, in the meantime, these investments will likely weigh on the stock, she said.

Of course, if Paramount goes ahead with its bid for Warner Bros. Discovery, which CNBC’s David Faber reports could come as early as next week, the company’s slate could grow even bigger. Bringing Warner Bros. Discovery into the fold would not only add major franchises like DC superheroes, Sonic the Hedgehog, Harry Potter and Game of Thrones to Paramount’s collection, but also a laundry list of sports rights like the National Hockey League, Major League Baseball and NASCAR.

Analysts are looking forward to Paramount’s November earnings report, when Ellison is expected to address the new company’s strategy in more depth. This includes Paramount’s cost-cutting measures, in which it is looking to take $2 billion out of the conglomerate amid advertising losses and industrywide struggles with traditional cable networks.

During the company’s second-quarter earnings call this year, Andrew Warren, the interim chief financial officer, noted that “it would be inappropriate” for the company to outline full-year 2025 financial expectations amid the Skydance transition.

“The economics of the business are changing and so the question is, how are they pivoting their new company to align with the realities of the ecosystem that they’re working in?” Fishman said.

Variety reported last month that the company is expected to lay off between 2,000 and 3,000 employees. These cuts are slated to take place by early November, Variety reported.

Earlier this month, Ellison announced Paramount would be requiring employees to work in the office five days a week starting next year and said employees who did not want to make that transition were offered buyouts. This move could help the company thin the herd ahead of these looming staffing cuts.

“David Ellison’s young and he’s got a long-term point of view,” Ehrlich said. “This is clearly a long-term strategy, as opposed to prior management teams that had very, very, very short-term focus.”