When David Ellison first came to Hollywood, many dealmakers and insiders both balked and salivated. Here was the son of Larry Ellison, founder of the tech behemoth Oracle, trying to play in the big leagues after dropping out of USC Film School. Being the child of the 3rd wealthiest person in America (now 4th) may have made him not just any other rich kid, but to many, he was still just another nepo baby with cash to burn. And at first, that’s exactly what he did. Financing and co-starring in the 2006 WWI drama “Flyboys,” Ellison’s first dip into the entertainment waters was a critical and box-office failure, only earning $17.8 million against its $60 million budget.
But Ellison didn’t pack his bags just yet. In Hollywood, timing is everything and when he saw investment banks pull capital out of media and entertainment during the financial crisis of the late 2000s, he, along with other investors with family money, stepped up to the plate. In 2009, his relationship with Paramount Pictures began with a 4-year co-financing arrangement between the studio and his company, Skydance Media, that saw Ellison push $350 million worth of equity and debt into franchises like “Mission: Impossible” and “Star Trek,” as well as prestige projects like the 2010 “True Grit” adaptation from the Coen Brothers. The timing of this investment was fortuitous considering Paramount had recently stepped away from a $450 million deal with Deutsche Bank.
In the decade that followed, Ellison and his beloved Skydance would volley between high success and low impact, with projects he’d inherited continuing to grow and thrive, while new IPs like “Gemini Man” and “Geostorm” struggled to make a mark. After an unsuccessful attempt at revitalizing another Paramount property and fan-favorite of Ellison’s, the “Terminator” franchise, his relationship with the studio began to falter. In 2019, Ellison also made the controversial decision to hire John Lasseter after he’d only recently stepped down as Disney’s chief creative officer following #MeToo complaints regarding alleged inappropriate comments and physical forwardness, as well as dictatorial behavior.
Bringing Lasseter aboard to run Skydance Animation sent a message to Hollywood: David Ellison is going by the beat of his own drum. To amplify this message, Ellison took another huge step in expanding his empire. Giving up 10 percent of Skydance to the investment group RedBird Capital and the Korean company CJ Entertainment, Ellison raised $275 million. With another $1 billion in revolving credit from JPMorgan Chase, he rerouted his ship and steered it directly into the wave of streaming, once again, capitalizing on timing by prioritizing home entertainment right as the pandemic took hold.
In the span of two years, Ellison and Skydance sold 29 films and shows to various streamers, including Ben Affleck’s Nike drama “Air” and the upcoming “Alex Cross” series to Amazon, as well as Gina Prince-Bythewood’s “The Old Guard” and the Arnold Schwarzenegger action-comedy “FUBAR” to Netflix. Continuing the success he found with Tom Cruise on the “Mission: Impossible” franchise, Ellison helped get “Top Gun: Maverick” off the ground, resulting in a gross of over $1 billion, a huge boost to a theatrical industry struggling to rebound post-pandemic.
Despite this success, his track record remains spotty, with his efforts to assist the “G.I. Joe” and “Transformer” franchises proving fruitless and streaming films like “Ghosted” for Apple Original Films and “Heart of Stone” for Netflix being widely panned by critics. Many thought, eventually, Skydance would go the way of a similar shingle like Legendary, which sold to the Chinese conglomerate Dalia Wandan Group for $3.5 billion in 2016, but for the last year, a new vision of the company started to take shape, one that saw Ellison laying claim to one of the few original Hollywood studios still in business.
Does it make sense for Skydance, still in its nascent years with respect to Hollywood longevity and pretty much solely focused on action and animation, to take over operations of an entire studio like Paramount, which encompasses multiple brands and genres? The last major merger of this kind took place two years ago between Warner Brothers. and Discovery and results on the pairing remain a toss-up at best. Max, once known as HBOMax and featuring a well-curated, high quality selection, is now littered with the bargain basement of reality television and underperforming to such a degree that a fusing with Paramount+ is now being considered.
Just as David Zaslav started his tenure as head of Warner Discovery by slashing $3 billion through layoffs and shady business practices (see “Batgirl” and “Coyote v. Acme”), so too does Ellison plan on slimming Paramount down before presumably boosting it back up. On an investor call this morning, he and others outlined $2 billion in run-rate cost savings that would be trimmed away from the company, while also expressing a keen focus on building out streaming and technology. In another daring and unfortunate move, Ellison has also tapped former NBCUniversal CEO Jeff Shell to serve as president of the newly merged company. This comes a year after Shell was dismissed with cause following an investigation for sexual harassment.
Many might say that, despite Lasseter’s and Shell’s checkered histories, they bring to the table an expertise that’s hard to match. Ellison himself shared, in the case of Lasseter, that Skydance conducted a thorough vetting of him before bringing him aboard. However, it’s hard to know if Ellison’s inclination to stand by the old guard of the business comes from his own defiant trust in their abilities or the influence of people like his father or friends of his father who shepherded him into this business and have a stake in his success. People like record executive and film producer David Geffen or lawyer and Hollywood power broker Skip Brittenham of entertainment firm Ziffren Brittenham LLP.
Another interesting player in the mix is Ellison’s sister, Megan, who founded and runs the indie company Annapurna Pictures, which broke out with films like “Zero Dark Thirty” and “Her,” but has been struggling in recents years. After disastrous box offices for multiple films in 2019, her father stepped in to help Annapurna avoid bankruptcy, but the company has scaled back considerably, with only one film coming out this year, Marielle Heller’s “Nightbitch” starring Amy Adams. With other indie companies like Participant closing up shop, is there an opportunity for Megan to cut her losses, jump ship, and help her brother corner the prestige market for Paramount? Both are notoriously private about their relationship, but they’re contrasting tastes and interests could work well in tandem.
Is David Ellison the next Robert Evans though? Probably not. But that’s not to say they don’t share similarities. For one thing, both started as actors only to realize they were much better behind the scenes. They both came from privilege, though certainly different levels. And most importantly, both have been driven by a deep love and appreciation for the magic of the movies. The challenges Ellison faces, however, will be unlike anything Evans had to deal with (though he certainly had his struggles).
Not only will Ellison have to be a part of proving that the streaming model can be profitable and self-sustaining while at the same time supporting the theatrical business and investing in new technologies, but he’ll also have to show he can churn out a wide range of quality content that plays to many different genres and audiences. This is also if and only if the deal survives the closing period, which is expected to last into Q3 2025. One thing’s for certain in all of this. While Ellison may not be a mogul quite yet, it’s certainly starting to seem like this is what he’s wanted all along.
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