David Ellison’s Spending at Paramount Has Changed Hollywood’s Mood

David Ellison’s spending spree in Hollywood is starting to make Netflix’s industry-rocking largess look Lilliputian.

It has been 37 days since Mr. Ellison, 42, took over Paramount Global as part of an $8 billion merger that combined his company, Skydance Media, with a beaten-up collection of old-media assets — MTV, the Paramount movie studio, CBS — and two streaming services. In that short amount of time, he has certainly made two things clear: He is moving fast, and he has access to a seemingly endless supply of his father’s cash.

Consider this:

• Mr. Ellison outbid Netflix for a seven-year, $7.7 billion deal to claim exclusive streaming and broadcast rights in the United States for the Ultimate Fighting Championship.

• He poached the “Stranger Things” creators from Netflix with the promise of theatrical releases for future film projects.

• He shored up the rights to “South Park” for the next five years with a deal worth at least $1.25 billion that includes 50 new episodes of the provocative series.

• He’s planning a “Street Fighter” movie with Legendary Entertainment; a “Call of Duty” movie with Activision; many movies with Will Smith; and, in a deal that puts Timothée Chalamet into the salary stratosphere with a $25 million payday, an action heist movie that will reunite the actor with James Mangold, the director of the Bob Dylan movie “A Complete Unknown.” Paramount will expand its slate to as many as 20 films a year, up from eight.

• Mr. Ellison is also in final talks to to buy The Free Press, an online media start-up that was founded as a rebuke to traditional news organizations, for a price that is expected to exceed $100 million.

And now he’s preparing a mostly cash bid for Warner Bros. Discovery, which owns HBO, CNN and the Warner Bros. movie and television studio, according to several people with knowledge of the plans. The company is worth $41 billion and has $35 billion in debt, remnants of the 2022 merger that brought it to life. Should a deal come to fruition — and the challenges are colossal — it would be a transaction on a par with Disney’s $71.3 billion purchase of 21st Century Fox assets in 2019, a merger that reshaped the global entertainment business.

Mr. Ellison primarily wants Warner Bros. Discovery for its studio, which is loaded with healthy intellectual property (unlike Paramount), and for its HBO Max streaming service, which expects to have 150 million subscribers worldwide by next year. Paramount’s flagship streaming service has about 78 million. HBO also brings considerable prestige.

Regardless of what transpires with Warner Bros., Mr. Ellison’s shopping spree already represents the biggest scene change in Hollywood since 2013, when Netflix began showering writers, actors, producers and directors with money in an attempt to dominate streaming. A little more than a month ago, Hollywood’s creative community was in full meltdown mode. The box office is dying! Studios aren’t spending! Because of tax incentives available elsewhere, Los Angeles has become a ghost town!

Any now? Those worries (and others) certainly haven’t gone away, but there is a noticeable shift in mood: Finally, mercifully, someone wants to invest in us again.

“It’s not just that David Ellison is spending,” Lorenzo di Bonaventura, a respected producer and former studio executive, said in a phone interview. “It’s that he wants to do cool stuff. That sounds very basic, but underneath it all ‘making cool stuff’ is the Hollywood dream. And to have that in the head of a company — someone who is excited about movies, who believes in movies — is lacking in the Hollywood of today in a huge way.”

He added, “It’s an exciting moment, and it has come on fast.”

Tory Tunnell, whose Safehouse Pictures produced the recent Paramount comedy “Novocaine,” was also upbeat, albeit a bit more cautiously.

“There has been so much news about a constricting business and cutbacks that it’s been nice to have a sudden injection of energy and optimism, especially under the umbrella of a legacy studio,” Ms. Tunnell said.

Paramount Skydance and Mr. Ellison declined to comment for this article.

When Netflix opened its cash spigots for deals with writer-producers like Shonda Rhimes and Ryan Murphy, vast swaths of Hollywood’s creative community scrambled to partake. A similar scrum is forming around Mr. Ellison and his team — notably Cindy Holland, who spent 18 years at Netflix and played a crucial role in turning it into a juggernaut. Mr. Ellison hired her as his streaming content czarina.

Some familiar criticisms of Hollywood have started to swirl around Mr. Ellison. Senior executives at competing Hollywood companies use words like “reckless” in conversations about some of his early moves, in particular his potential bid for Warner Bros. Some people in Hollywood recoiled at the news of Mr. Ellison’s interest in Warner Bros., noting that additional consolidation would mean fewer jobs and one less stand-alone old-line studio — the sad end of an era. Warner Bros. in many ways epitomizes the romance of Hollywood; the studio is the ancestral home of Bette Davis, “Casablanca” and Clint Eastwood.

As it is, Mr. Ellison plans to tear through Paramount Global’s already decimated divisions to find more than $2 billion in “cost efficiencies and synergies.” Layoffs of around 2,000 people are expected, keeping employees on edge.

There is also snark about Mr. Ellison’s financing. A lot of the money comes from his father, Larry Ellison, a co-founder of Oracle and one of the richest men in the world, with an estimated net worth of $363 billion, according to Bloomberg. (Larry Ellison’s fortune increased more than $100 billion in a single day this week, prompted by Oracle’s earnings.) One senior executive at a competing studio on Thursday likened a Warner Bros. bid to a dad allowing his son to add new tires and rims to a fancy car he just bought him.

“The kid spends big to get in the picture,” the chief executive of another entertainment company said with dry derision. The comment was a riff on “The Kid Stays in the Picture,” the memoir of Robert Evans, who ran Paramount in the 1960s and early ’70s.

Netflix was called reckless, which it didn’t like, and a disrupter, which it did. But the company’s bold strategy worked: The television shows and films it bought turned the company into an unrivaled force in the streaming business, compelling everyone else, including Disney, Warner Bros., Paramount, Amazon and Apple to invest billions to compete with it.

Mr. Ellison appears to be following the same playbook.

“It’s great seeing the energy David is bringing to Paramount,” Gigi Pritzker, a producer of films like “Nonnas,” a recent hit on Netflix, wrote in a text message. “Thumbs up to having him invest in our business!”