On Thursday, the closing of the $8.4 billion merger of Paramount International and Skydance Media ushered in a brand new period for the enduring leisure firm, and a brand new Hollywood mogul: David Ellison, CEO of Paramount, a Skydance Company.
Ellison, a movie producer and the founding father of Skysance, is quickly changing into a family title amid intense media protection of the largest deal in leisure and media this 12 months. His father and associate within the deal, Oracle cofounder Larry Ellison, has lengthy been well-known as one of many richest males on this planet. Much less well-known, nonetheless, is the opposite man behind the deal: Gerry Cardinale of the personal fairness agency RedBird Capital.
With RedBird’s $2 billion stake in Skydance’s $8 billion acquisition of Paramount International, Cardinale has been a key participant within the 19 months of machinations forward of the switch of energy from Shari Redstone to the Ellisons.
Forward of the closing of the deal, Paramount was already displaying indicators of personal equity-style fiscal austerity. Underneath Redstone, the corporate pushed by sweeping layoffs and parted methods with a number of top-paid executives—and Ellison has promised to seek out one other $2 billion in price financial savings.
Paramount additionally reduce unfastened The Late Present with Stephen Colbert and settled a $16 million lawsuit introduced by President Donald Trump over a 60 Minutes interview. After Skydance agreed to “make sure that the brand new firm’s programming embodies a range of viewpoints from throughout the political and ideological spectrum,” and to “root out the bias that has undermined belief within the nationwide information media,” Trump-appointed FCC Chairman Brendan Carr accredited the deal on July 24. The strikes garnered criticism from those that noticed the Trump settlement as an oblique bribe and the cancellation of Colbert, a frequent critic of Trump, as an effort to curry favor with the president.
Now, with the deal performed, Cardinale’s affect is clearly delineated: RedBird holds 22.5% of Paramount’s voting rights whereas David Ellison will maintain 50% of voting rights and his father will maintain the remaining 27.5%. A number of alums of the agency are within the C-suite: Operating the corporate alongside Ellison are two Cardinale lieutenants—Jeff Shell as President and Andy Gordon as COO. Cardinale didn’t reply to requests for remark for this story.
An “IP monetization engine” involves Hollywood
Cardinale’s rise to Hollywood kingmaker marks a watershed second for the leisure trade. Personal fairness corporations have been making strikes in Hollywood for a while, however Redbird’s stake within the Paramount deal is by far the biggest so far.
Not like the moguls, creatives, and dynasties who historically dominated the studios, Cardinale is an outsider—a product of Wall Avenue, not Paramount’s backlot tradition. However it’s a trait he sees as an asset. “I actually suppose being from outdoors that ecosystem—or no less than one foot in, one foot out—is a big aggressive benefit,” he advised Fortune’s Paolo Confino in 2024. “I don’t get caught up within the headlines. I don’t get caught up within the emotionalism. I’m not operating to go to the Oscars.”
Cardinale—a former Rhodes scholar and the type of finance wonk who makes use of phrases like “technological disintermediation”—suggests that it’s going to take actual self-discipline to place the enduring however battered studio for tech-forward survival in a ruthless streaming period.
This identical unforgiving strategic self-discipline made RedBird formidable in sports activities and leisure. “We’re an IP monetization engine,” Cardinale advised Fortune final 12 months. “That’s what we do.” At Paramount, it can probably imply leveraging the legendary Hollywood studio’s trove of flicks, exhibits, and different IP, whereas chopping prices and enhancing effectivity. “We should always be capable to make motion pictures for half the associated fee,” Cardinale advised Puck. “We should always be capable to make authentic content material for half the associated fee.”
Whereas Paramount is Cardinale’s highest-profile funding, it’s under no circumstances the dealmaker’s public debut. The 58-year-old investor has been betting large for almost three many years, having reduce his enamel at Goldman Sachs earlier than founding RedBird (a play on his final title) in 2014. The agency now has $12 billion in belongings beneath administration and 6 international workplaces. Regardless of having constructed a multibillion-dollar personal fairness empire, Cardinale beforehand advised Fortune he rejects the time period “mogul,” describing himself merely as an investor.
The finance world wasn’t all the time interesting to Cardinale, he advised Bloomberg’s The Deal in 2024: “I wasn’t certainly one of these Wharton children who knew I wished to go to Wall Avenue from day one,” he stated. Cardinale grew up within the Philadelphia suburbs and attended Harvard College, the place he rowed heavyweight crew and graduated magna cum laude earlier than finding out politics and political principle at Oxford on a Rhodes scholarship. It was whereas working at a Tokyo suppose tank that Cardinale started contemplating a profession in finance, becoming a member of Goldman as an analyst in 1992 on the agency’s Hong Kong and Singapore workplaces, and later shifting to New York.
In 2001, Cardinale helped persuade Yankees proprietor George Steinbrenner to launch the YES regional sports activities community, with Goldman sinking a $335 million personal fairness funding into the venture. Cardinale noticed the chance for the Yankees to monetize their very own content material—video games, evaluation, and authentic programming—moderately than merely promoting broadcast rights to native cable. The dangerous YES deal netted a whole bunch of tens of millions in annual money stream and fast-tracked Cardinale’s promotion to associate at Goldman in 2004. Eight years later, Goldman and Windfall Fairness bought a 49% stake in YES to Information Corp at a valuation exceeding $3 billion—up from a beginning valuation round $850 million in 2001.
Cardinale’s success with the Yankees helped show what was to grow to be a foundational thesis for his funding technique empire: Whereas platforms, codecs, and applied sciences shift, the viewers attachment to driving IP (a storied sports activities group, a blockbuster film franchise, a beloved character) persists. This sturdiness allows monetization by infinite new enterprise fashions because the panorama evolves.
“I’m ready to take a look at the sports activities trade, and the media and leisure trade, as ecosystems,” Cardinale defined to Fortune in 2024, talking of his possession of the Italian soccer group AC Milan and his efforts to switch the group’s crumbling century-old stadium with a brand-new Yankee Stadium-like enviornment. “After which what I do is I search for dislocations. I search for areas the place there’s a necessity for enchancment, evolution, and professionalization.”
Cardinale left Goldman in 2013 and based RedBird the next 12 months with $665 million he raised for an inaugural fund. Cardinale’s technique at RedBird has constantly adopted his system: Purchase premium mental property, streamline prices, then monetize it.
This precedence is mirrored within the agency’s portfolio. In addition to AC Milan, with its tens of millions of world followers, Redbird bought an 11% stake in Fenway Sports activities Group, the holding firm that owns the Boston Pink Sox, English soccer group Liverpool FC, and the regional sports activities channel New England Sports activities Community. Then, with the assistance of FSG, RedBird invested in NBA star LeBron James’s leisure firm SpringHill, in a $725 million deal.
Exterior of sports activities, RedBird backed Ben Affleck and Matt Damon’s movie manufacturing firm, Artists Fairness, and purchased the manufacturing firm behind the critically acclaimed British tv present Fleabag and the fact recreation present Squid Sport: The Problem. In 2024, the agency entered the information recreation, agreeing to buy the U.Okay. publications the Telegraph and the Spectator alongside co-investors from the United Arab Emirates, in a deal shepherded by former CNN head Jeff Zucker. Regardless of objections from some within the UK authorities about international affect over establishments of British media, in Could, the Telegraph acquisition went by in a deal valued at upwards of $640 million.
Cardinale has additionally lengthy backed David Ellison’s imaginative and prescient for Skydance. In 2020, RedBird turned the second largest investor in Ellison’s firm, main a $275 million capital elevate. Cardinale helped elevate an extra $400 million for Skydance in 2022.
For Cardinale, content material is king
Cardinale’s pal Bob Iger, the Disney CEO, sees Cardinale as a pure in terms of the enterprise of tradition. “He will get the truth that nice IP is the equal of beachfront property,” Iger advised Fortune final 12 months. “He is aware of that the world is in want of leisure, and whatever the means through which they get it, or the way it’s monetized, there’s actual worth to it, and it’s long-term.”
Up to now, this ethos has paid off for Cardinale. However the highway forward for Paramount is filled with formidable challenges: a declining linear TV sector, billions in debt, brutal streaming wars, and a workforce nonetheless reeling from a number of layoffs—and sure extra to return with the extra $2 billion in cuts pledged by Ellison. The brand new management’s promise of “transformation” now rests on whether or not they can drive effectivity with out eviscerating the inventive core.
To take action, Paramount, a Skydance Company, will probably financial institution on Cardinale’s IP-optimizing technique. In Cardinale’s mannequin, each acquisition is supposed to outlast market cycles and fads, thriving on operational rigor and adaptable “platform worth” that eclipses the previous trophy asset mentality.
And Paramount, with its greater than 100 years of lore, upwards of 1,200 movie titles, and the distribution rights to hundreds of different movies, is chock stuffed with platform worth.
