Gerry Cardinale, Key Paramount Investor, Sees Possibilities Others Don’t: ‘A Need-to-Have Moment in Hollywood’
With its heavy dependence on declining cable networks, executives’ refusal to part with assets like BET and Showtime that others wanted to buy, and its creation out of two old-school media companies called Viacom and CBS, Paramount in recent years has seemed like a case study is how to do everything wrong. Now one of the financial world’s biggest backers of sports and entertainment sees a chance to do it all right.
Gerry Cardinale, known for his investments in United Football League and the Yankees YES regional sports network, as well as setting up a large investment fund with former NBCU and CNN chief Jeff Zucker at the helm, has injected $1.8 billion into a “new” Paramount that he now owns along with David Ellison and his family. He believes traditional media companies still have a chance — if their executives can pull their heads out of the sand and find ways to work more readily with technology.
Paramount being put up for sale by its previous owners, the Redstones, gave rise to “a situation here I’ve not seen in my 35-year career,” said Cardinale, speaking to reporters after the sale was officially closed. “This is not a nice to have — this is a need to have moment in Hollywood, and you have got a balkanized situation between technology and content, between Silicon Valley and Hollywood” that is hurting the overall business, he said. “The opportunity here is to actually start to blend that and that’s what needs to happen.”
The new Paramount is a bet that tech backers can revive a traditional media company, rather than building one that serves as an add-on to a group of information services (Apple); or e-commerce (Amazon); or was created outside the confines of traditional Hollywood (Netflix). Ellison, who has developed relationships with entities ranging from actor Tom Cruise to the National Football League through his work with his production company, Skydance Media, seemed eager Thursday to find ways to appeal to the broader U.S. viewing base, talking about a need for CBS News, for instance, to serve both “center left” and “center right” and calling for a cessation of “politicization” of news and entertainment.
During the meeting, Cardinale the company’s officers, including new CEO David Ellison and president Jeff Shell, articulated a strategy of cutting costs quickly — with many moves unveiled as soon as by November. Ellison sketched out a future that would have Paramount making movies and TV shows, but potentially even a “bot” that would let consumers have long conversations with their favorite character from film or program.
“The thing that has been really problematic from my perspective,” Ellison said ,is “people thinking that technology is something to be feared, or that it’s the center. It is not. The artists and the filmmakers that we work with are first, second, third, fourth, fifth, on our priority list. We are storytelling companies first. But if you don’t actually have the appropriate technology to support function of that storytelling….It’s common.” he said, adding “What we want to do is be the place that supports the most talented filmmakers” or creatives, but “also doesn’t run away from technology — or runs towards it.”
Ellison and his team have already taken some criticism for not unveiling concrete content plans. The company, for example, does not have a concept at the ready to replace Stephen Colbert’s “Late Show” when it stops next May, according to George Cheeks, who is chair of Paramount’s TV operations. But that was no reason to keep the show on the air after it has suffered a drop in advertising support, he said Thursday. “We love the show,” said Cheeks. “The economics made it a challenge for us to keep going.”
There have also been questions about how much freedom CBS News and “60 Minutes” will have after the former Paramount agreed to settle a lawsuit from President Donald Trump against the newsmagazine that many considered frivolous, but Cardinale warned that trying to have influence media properties rather than run them well financially tends to undermine the value of the asset.
“Don’t buy into a news organization, whether it’s broadcast or print, if you want to influence it. That’s just bad business, right? Because the investment piece, the kernel of the entire investment thesis is independence and objectivity. If you can’t get your head around that, don’t buy it,” said Cardinale. “There’s no way we’re going to try to influence it, By doing that, you kill the investment thesis. It’s that simple.”
And Cardinale thinks traditional media executives still have the best handle on what properties to create. But they need more help.
“I don’t think the Silicon Valley guys should own content production,” he said. “I think it’s the guys that have been around for 113 years. All you gotta do, though, is just don’t buy something and sit there and think it’s going to take care of itself. You gotta get under it, you gotta break it apart.”
Gerry Cardinale, known for his investments in United Football League and the Yankees YES regional sports network, as well as setting up a large investment fund with former NBCU and CNN chief Jeff Zucker at the helm, has injected $1.8 billion into a “new” Paramount that he now owns along with David Ellison and his family. He believes traditional media companies still have a chance — if their executives can pull their heads out of the sand and find ways to work more readily with technology.
Paramount being put up for sale by its previous owners, the Redstones, gave rise to “a situation here I’ve not seen in my 35-year career,” said Cardinale, speaking to reporters after the sale was officially closed. “This is not a nice to have — this is a need to have moment in Hollywood, and you have got a balkanized situation between technology and content, between Silicon Valley and Hollywood” that is hurting the overall business, he said. “The opportunity here is to actually start to blend that and that’s what needs to happen.”
The new Paramount is a bet that tech backers can revive a traditional media company, rather than building one that serves as an add-on to a group of information services (Apple); or e-commerce (Amazon); or was created outside the confines of traditional Hollywood (Netflix). Ellison, who has developed relationships with entities ranging from actor Tom Cruise to the National Football League through his work with his production company, Skydance Media, seemed eager Thursday to find ways to appeal to the broader U.S. viewing base, talking about a need for CBS News, for instance, to serve both “center left” and “center right” and calling for a cessation of “politicization” of news and entertainment.
During the meeting, Cardinale the company’s officers, including new CEO David Ellison and president Jeff Shell, articulated a strategy of cutting costs quickly — with many moves unveiled as soon as by November. Ellison sketched out a future that would have Paramount making movies and TV shows, but potentially even a “bot” that would let consumers have long conversations with their favorite character from film or program.
“The thing that has been really problematic from my perspective,” Ellison said ,is “people thinking that technology is something to be feared, or that it’s the center. It is not. The artists and the filmmakers that we work with are first, second, third, fourth, fifth, on our priority list. We are storytelling companies first. But if you don’t actually have the appropriate technology to support function of that storytelling….It’s common.” he said, adding “What we want to do is be the place that supports the most talented filmmakers” or creatives, but “also doesn’t run away from technology — or runs towards it.”
Ellison and his team have already taken some criticism for not unveiling concrete content plans. The company, for example, does not have a concept at the ready to replace Stephen Colbert’s “Late Show” when it stops next May, according to George Cheeks, who is chair of Paramount’s TV operations. But that was no reason to keep the show on the air after it has suffered a drop in advertising support, he said Thursday. “We love the show,” said Cheeks. “The economics made it a challenge for us to keep going.”
There have also been questions about how much freedom CBS News and “60 Minutes” will have after the former Paramount agreed to settle a lawsuit from President Donald Trump against the newsmagazine that many considered frivolous, but Cardinale warned that trying to have influence media properties rather than run them well financially tends to undermine the value of the asset.
“Don’t buy into a news organization, whether it’s broadcast or print, if you want to influence it. That’s just bad business, right? Because the investment piece, the kernel of the entire investment thesis is independence and objectivity. If you can’t get your head around that, don’t buy it,” said Cardinale. “There’s no way we’re going to try to influence it, By doing that, you kill the investment thesis. It’s that simple.”
And Cardinale thinks traditional media executives still have the best handle on what properties to create. But they need more help.
“I don’t think the Silicon Valley guys should own content production,” he said. “I think it’s the guys that have been around for 113 years. All you gotta do, though, is just don’t buy something and sit there and think it’s going to take care of itself. You gotta get under it, you gotta break it apart.”