Paramount CEO David Ellison said on the company’s earnings call Tuesday that he believes the company’s merger with Warner Bros. Discovery will go through despite a legal challenge filed by a dozen states.
Ellison also weighed in on how the company views artificial intelligence: It’s a tool for human storytellers, not a way to replace them, and Ellison said viewers might one day interact with Paw Patrol dogs or the Star Trek universe via AI, for example.
The deal was announced on Feb. 27, when Paramount Skydance and Warner Bros. Discovery said they had agreed to merge. Under the agreement, Paramount Skydance would acquire Warner Bros. Discovery in an all-cash transaction valued at $31 per share, representing an equity value of about $81 billion and an enterprise value of roughly $110 billion.
On Tuesday, the same day as the earnings call, a federal judge set a March 2, 2027, trial date for an antitrust lawsuit filed by California and 11 other states to block Paramount’s acquisition of Warner Bros. Discovery. The ruling delays resolution of the deal and increases the likelihood that Paramount will owe substantial delay-related payments under the merger agreement.
Ellison said the company believes it will win if the case goes to trial, but is also open to a settlement.
Paramount’s streaming business generated nearly $2.5 billion in the second quarter of the year, up 9% from a year earlier. On the call, Paramount executives said the boost was driven by strong viewership for the Yellowstone sequel Dutton Ranch and by live sports programming, including the 2026 FIFA World Cup. Dutton Ranch premiered in May and was renewed in June for a second season. It is the fifth series in the Yellowstone franchise.
Making peace with AI
Ellison also addressed the controversial spread of artificial intelligence into entertainment.
His comments come as Hollywood continues to grapple with the rapid adoption of generative AI, which has sparked concerns that the technology could take human jobs. Those fears played a major role in the 2023 Hollywood strikes, with unions pushing for protections around AI-generated scripts, digital replicas of performers and the use of creative work to train AI systems. Ellison argued that AI can streamline production and serve as a creative tool rather than a substitute for human talent.
“We do view AI as a tool for storytellers, not a replacement for them,” he said, calling AI “positive for our business and our industry.”
Ironically, Ellison mentioned 1984’s The Terminator, one of the most famous films about the dangers of artificial intelligence and machines replacing humans, not as a warning, but as a positive factor. His point was that the film, made on a reported $6.4 million budget, would be “hard to get made today,” and that films would remain driven by filmmakers, but aided by AI.
He also said his own daughter is a huge fan of the air-rescue dog Skye from the animated children’s series Paw Patrol, which, through Nickelodeon, is a key property in Paramount’s kids and family business. AI could allow her and other young fans to have a “10-minute conversation with Skye, powered by (a large language model),” he said.
He also said that AI could allow Star Trek fans to “create a 5-minute clip on the bridge of the Enterprise.”
“We are bullish on high-quality content” that is created by storytellers, he said.
