Jeff Shell as Paramount president could have runway to make daring modifications

Lower than two years after NBCUniversal fired Jeff Shell for alleged sexual harassment, the previous CEO is near discovering himself again within the saddle main a storied media firm.

The longtime media govt is primed to assist run the day-to-day media operations of Paramount World as president of the corporate when its merger with Skydance Media closes within the first half of 2025, assuming regulatory approval. He’ll report back to present Skydance CEO David Ellison, who will take the highest job because the mixed firm’s CEO.

Whereas neither Shell nor Ellison has publicly declared particular intentions for Paramount World as a consequence of laws banning “gun-jumping” in pending mergers, Shell’s current tenure because the CEO of Comcast’s NBCUniversal, the mother or father firm of CNBC, gives clues to what could also be in retailer for Paramount.

CNBC spoke with a dozen individuals who labored carefully with Shell throughout his tenure as CEO from 2019 to 2023. They described Shell as an individual with large concepts and a willingness to make daring strikes however with a method that is dependent upon these round him to speak him out of choices that won’t make sense. A few of Shell’s boldest concepts — reminiscent of giving NBC’s 10 p.m. hour over to associates, merging with a rival, and turning CNBC primetime right into a Fox Information facsimile — by no means performed out.

Comcast CEO Brian Roberts selected Shell to switch Steve Burke as NBCUniversal CEO in 2019. Shell had constant success working quite a lot of totally different divisions inside Comcast and NBCUniversal, together with NBCU Worldwide and Common Filmed Leisure Group.

Colleagues instructed CNBC they discovered Shell to be an excellent listener and a collaborative decision-maker with a predilection for typically saying an excessive amount of. His departure from NBCUniversal was sudden. In April 2023, a Comcast investigation corroborated allegations from a former CNBC reporter of sexual harassment. Shell joined personal fairness agency RedBird Capital Companions in February. RedBird backed the Skydance-Paramount merger and can assume a minority fairness stake.

Quickly, Shell, 59, will probably be on the helm of Paramount and paired with Ellison, who has already expressed his want to transition Paramount right into a extra fashionable media firm. That will arrange a dynamic the place Paramount’s CEO and president each need daring change.

RedBird executives praised Shell throughout a convention name in July asserting the merger, with RedBird Companion Andrew Brandon-Gordon saying Shell’s “long-term, results-oriented, proven track record at NBCUniversal” coupled with Ellison’s creativity and tech savvy make for the proper management dynamic for the way forward for Paramount.

Nonetheless, it is doable the pairing may result in rash decision-making, warned one govt who labored carefully with Shell at NBCUniversal. Even the consideration of dramatic concepts can destabilize a corporation if mentioned brazenly with out comply with via, and Shell developed a fame at NBCUniversal for what one former coworker described as a “shoot first and aim later” mentality — a sentiment shared by at the very least six others who spoke with CNBC.

“What Paramount needs is blocking and tackling — mature leadership,” mentioned the chief who labored carefully with Shell. “Ellison is a blow-everything-up guy, and Shell needs someone who can minimize his mistakes.”

Shell and Ellison each declined to remark for this story.

At Paramount, Shell will probably be given an asset combine much like what he oversaw at NBCUniversal — save the theme parks. He’ll have a significant broadcast community with NFL rights (CBS), a film studio (Paramount Photos), a streaming service with tens of hundreds of thousands of subscribers (Paramount+), a big library of TV reveals and movies, and a slew of cable networks with dwindling audiences.

It is going to be Shell’s mission to chop prices — Skydance has already recognized $2 billion in value efficiencies and synergies, the corporate mentioned throughout a July convention name with traders concerning the merger — and rework Paramount World into a contemporary media firm. That doubtless means making daring modifications to declining companies whereas investing in expertise.

Shell could attempt to resurrect the thought of giving up the ten p.m. hour — as he contemplated at NBC — for CBS, Paramount World’s nationwide broadcast community, individuals who spoke to CNBC recommended. Bailing on the hour would save CBS hundreds of thousands on content material prices. Native associates would welcome gaining the hour as a strategy to enhance promoting income.

Throughout a 2022 CNBC interview, Shell confirmed a Wall Avenue Journal report that he was contemplating ceding the hour to native associates to shift assets from linear broadcast TV towards streaming.

“If we’re being prudent operators, which we try to be, if you’re allocating a bunch of resources to one side of the business, you have to look at the allocation of resources to another,” Shell instructed CNBC’s David Faber on the time. “We make a lot of money at 10 o’clock. We still have a lot of viewers at 10 o’clock. There’s no question throughout the day as linear declines, you’re going to have to make some tradeoffs, and we’ll be looking at that as our investors would want us to look at.”

The ten p.m. hour on broadcast networks nonetheless serves as a time slot for scripted dramas — a style that is largely gone to streaming and, in flip, has seen rankings battle on conventional TV. CBS’ 10 p.m. programming consists of “NCIS: Origins,” “FBI: Most Wanted,” “Elsbeth,” and “Blue Bloods,” which is in its 14th season.

Paramount World co-CEO George Cheeks, who runs CBS, instructed Deadline in late 2022 that he was “committed to 10 p.m. and continuing our ratings success in that time period.”

Shell finally backed off giving up 10 p.m. for NBC after weighing the potential fallout with Hollywood creatives and brokers, in response to individuals accustomed to the matter. Such a transfer at NBCUniversal would threat ruining relationships with TV titans reminiscent of “Law & Order” creator Dick Wolf, whose reveals have occupied the ten p.m. hour on NBC for years and have created a deep library for NBCUniversal’s flagship streaming service, Peacock. Irritating Hollywood would have run counter to Shell’s technique to extend Peacock’s content material catalog, as NBCUniversal wanted sturdy relationships to gas the service with new programming.

Wolf’s reveals have been additionally important moneymakers for NBCUniversal, in response to an individual accustomed to the matter.

Ceding the ten p.m. hour would even have negatively affected the rankings of NBC’s storied late night time present, “The Tonight Show.” CBS’ late night time present, “The Late Show With Stephen Colbert,” is constantly the top-rated late night time present, which may naturally give Shell pause on transferring away from 10 p.m. as soon as he is overseeing Paramount property.

Nonetheless, all the late night time reveals are dropping viewers, and a downsizing has already begun throughout the style. Shell could really feel it is lastly time to drag the rip wire.

He’s clearly conscious that the established order of linear TV wants to vary.

“Obviously a big chunk of the company is in the linear world, and we know that linear is challenged and declining,” Shell mentioned throughout the July convention name. “I think a lot of us in the business know, we have got to run these businesses in a different way as they decline. And so, we’ve spent a lot of the last few months really building a bottom-up plan, and our goal is to manage the businesses, particularly the linear businesses, for cash flow generation.”

Shell can be more likely to look at the content material windowing technique at Paramount, he mentioned in July. That would imply Shell has a want to tier Paramount+ in another way, with some well-liked content material out there on dearer tiers, maybe ad-free, that shift to inexpensive tiers, together with free ad-supported Pluto, over time.

“I’m a big believer in windowing strategy, and I think there’s maybe a more efficient way to maximize the value of our content, and we’ll continue to be in the DTC [direct-to-consumer] business,” Shell mentioned throughout the July convention name.

Some media analysts, reminiscent of LightShed Companions’ Wealthy Greenfield, have argued Paramount World ought to shut down Paramount+ and as an alternative license Paramount content material to different streamers with extra scale. Paramount+ has constantly misplaced cash since its inception and will not be worthwhile till 2025, the corporate has beforehand mentioned.

That does not seem like in Ellison and Shell’s playbook for Paramount. The 2 have expressed their want to associate Paramount+ with one other streamer so as to add scale and content material to the service, both via a merger or a bundle. Paramount World has already held talks with quite a few media firms about partnering on streaming, together with NBCUniversal and Warner Bros. Discovery.

“To be a winner in [streaming] really means being in the ultimate bundle that’s coming,” Shell mentioned throughout the July convention name. “We’ve had a bunch of inbound calls from a number of people about partnerships that could involve a partnership with another player or players.”

At NBCUniversal, in response to individuals accustomed to his pondering, Shell privately pushed the advantages of merging with one other content material firm — once more, one thing that by no means occurred.

He spoke up in conferences about the advantages of merging with Viacom, WarnerMedia and even Netflix to make sure Peacock would have endurance towards bigger streaming companies, in response to individuals who heard him communicate.

Finally, Comcast CEO Brian Roberts determined the strikes weren’t in the most effective curiosity of shareholders or that it was too tough to realize regulatory approval for them, although Roberts almost accepted a deal in 2022 for NBCUniversal to merge with online game developer Digital Arts — a deal that, in response to individuals accustomed to the matter, would have seen Shell lose his job as NBCUniversal CEO. That function would have gone to EA CEO Andrew Wilson, the individuals mentioned.

With no large merger, Shell pushed for NBCUniversal to flood Peacock with content material, particularly throughout the top of pandemic lockdowns, when Wall Avenue seemed to be closely valuing media firms on their streaming subscriber numbers. He argued NBCUniversal ought to put most of its cable programming on Peacock, together with regional sports activities networks, or RSNs, in response to individuals accustomed to the matter.

Once more, different executives talked him out of being too aggressive, arguing the corporate’s present pay TV distribution relationships can be harmed if NBCUniversal made that content material out there outdoors the cable bundle, in response to the individuals. Geolocation expertise points round regional sports activities additionally would have made the inclusion of RSNs tough, the individuals mentioned.

Whereas NBCUniversal has moved towards together with extra cable programming on Peacock, together with hit Bravo franchises reminiscent of “The Real Housewives” and “Below Deck,” it has saved RSNs and information networks MSNBC and CNBC separate.

One in all Shell’s large selections at Paramount will probably be what to do with a handful of cable channels which have successfully become zombie networks, largely airing reruns of the identical reveals to keep away from spending on new content material. This consists of MTV, VH1 and Comedy Central.

Shell wished to mix some NBCUniversal cable networks to chop prices and push again on dwindling income, individuals accustomed to the matter mentioned, however finally determined to not.

Shell additionally had concepts that did not come to fruition about altering programming on a few of NBC’s cable networks. He initially wished CNBC to undertake what he described to others as a center-right primetime lineup, in response to individuals accustomed to the discussions on the time.

Then-CNBC chief Mark Hoffman argued the thought did not make sense for the community’s model and sure would not have a lot of an viewers, and Shell backed down, the individuals mentioned. CNBC did rent former Fox Information anchor Shepard Smith in 2020 to anchor a prime-time present that was canceled in 2022 simply months after Hoffman retired. Hoffman declined to remark for this story.

One in all Shell’s first accomplishments upon taking the NBCUniversal job was to resume the community’s “Sunday Night Football” cope with the NFL, and one of many final issues he did was assist NBC Sports activities transferring ahead with a bid for NBA rights if it received a possibility, in response to individuals accustomed to the matter. NBC did get the possibility to bid, and it is bringing again NBA video games starting in 2025 after agreeing to pay about $2.45 billion per season to the league.

Each Shell and Ellison touted the significance of CBS Sports activities throughout their July convention name. When Paramount laid off a whole bunch of staff in September, none of them have been a part of CBS Sports activities, in response to an individual accustomed to the matter.

CBS owns a Sunday afternoon package deal of NFL video games, a part of NCAA March Insanity, Huge Ten soccer, UEFA Champions League, and The Masters, amongst different sports activities. It would not be stunning if Shell migrates away from CBS leisure programming towards sports activities, even in prime time, if these alternatives current themselves.

Disclosure: Comcast’s NBCUniversal is the mother or father firm of CNBC.

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