Ynon Kreiz takes Skydance co-CEO role

Ynon Kreiz is the new co-CEO of Skydance, TheWrap reports. TheWrap credits him with saving Mattel from financial collapse and turning the toymaker into an IP company. His new job is bigger, and TheWrap's reporting lays out the pressure.

The new job

Under the new arrangement, David Ellison handles long-term strategy and creative vision, plus talent relationships, partnerships, technology and capital allocation. Kreiz handles day-to-day management and the integration of Skydance and Paramount. TheWrap reports Hollywood is still recovering from a pandemic, two strikes and a wave of media consolidation cuts.

In a statement Friday, Ellison said: “In Ynon, I’m adding a partner with strong leadership and the operating firepower this integration demands. It’s a division of labor built on our complementary strengths, with clear reporting lines and it lets me focus where I can contribute most.”

Kreiz called it an industry inflection point. “The industry is at an inflection point, demanding evolution, investment, and a willingness to rethink business models,” he said.

What he did at Mattel

Kreiz took the Mattel job in 2018, after four CEOs had come and gone in four years. TheWrap reports he cut $1.5 billion in operating costs and thousands of jobs. The strategy led to the 2023 “Barbie” hit and to a “Masters of the Universe” movie with Amazon that TheWrap reports was a box office flop. Apple’s “Matchbox” with John Cena arrives Friday.

Mattel’s stock is down 15% over five years and closed at $16.05 Monday, slightly higher than when Kreiz arrived. TheWrap reports two shareholders, Southeastern Asset Management and Ariel Investments, are pushing the board to explore strategic alternatives, including a sale. The Wall Street Journal reported Friday that Authentic Brands Group has shown takeover interest, with no guarantee a deal will be reached. Mattel declined to comment.

“He has to somehow balance substantial efficiency initiatives and cuts with preserving creative output/long-term value, which is a very tough ask in any merger,” Paul Nary, a Wharton School professor, told TheWrap. He added that Skydance is about 20 times the size of Mattel and carries a heavy debt load.

PP Foresight analyst Paolo Pescatore told TheWrap Kreiz knows how to turn brands into IP businesses. “He understands restructuring and financial discipline, and knows how to turn established brands into broader intellectual property businesses spanning content, licensing, consumer products and experiences,” Pescatore said.

Kreiz has put it in similar terms himself. “I saw an opportunity to transform the company from being a toy manufacturer to an IP company that manages franchises,” he told TheWrap at the Grill conference in 2023.

The merger math

TheWrap reports the combined company projects more than $6 billion in savings over the first three years, with most of those savings outside labor costs. A Los Angeles County-commissioned study says the merger could affect nearly 4,500 local film and TV jobs over three years, plus thousands of indirect jobs. TheWrap says layoffs are widely expected.

Needham & Co. analyst Laura Martin predicts the integration will take two to three years, citing Warner Bros. Discovery’s “brutally siloed” corporate structure. She also told TheWrap the cost cuts will likely be “much more dramatic” than the promised $6 billion. “That will be the big investment issue for the stock because the company is starting out at over five times leverage at really high interest rates. For the equity to work, the debt has to start going down ASAP,” Martin said. She added that the company needs to survive its debt load for 18 months. TheWrap reports the combined debt is roughly $80 billion.

The merger also brings commitments. For five years, Skydance must invest at least $300 million a year in domestic film and TV production and spend $9.5 million on workforce training. It also must make a $5 million annual contribution to a fund for independent films within 30 days of closing.

Can two CEOs share power?

Netflix and Spotify have made co-CEO work, but TheWrap notes plenty of companies have not. BlackBerry, Oracle, Chipotle and Salesforce all abandoned the model, TheWrap reports.

TheWrap notes this setup pairs Kreiz with the company’s owner and majority shareholder. “The risk is that [Kreiz] is not given enough authority. Ellison has shown he intends to remain firmly in control,” Pescatore said. Charles Elson, founding director of the University of Delaware’s Weinberg Center for Corporate Governance, told TheWrap the co-CEO setup adds “a lot of conflict into the picture.”

What it means for viewers

If Skydance misses its targets, TheWrap reports the playbook includes cutting content spending, shelving projects, selling rights to its library, layoffs and asset sales. Aaron Meyerson of Qualia Legacy Media Advisors told TheWrap the contraction is already underway. “Fewer buyers means fewer greenlights, less competition for talent and material, lower fees, and fewer jobs, especially below the line, where people are already hurting from production leaving California,” Meyerson said.

Stevens Institute professor Stefano Bonini warned the merger could go badly. “This can end up catastrophic. It can be the [AOL-Time Warner] merger if it’s not done well,” Bonini told TheWrap.

Kreiz and Ellison will outline their vision at a briefing Tuesday evening. A Paramount spokesperson did not respond to TheWrap’s request for comment.

• David Ellison
• Mattel
• merger
• Paramount+
• Skydance
• Ynon Kreiz