It’d be pretty easy to scan the Hollywood headlines of 2022, hone in on the biggest success story in the most challenged area of the business, and say, OK, so who’s the one person who made THAT happen? The short answer, of course, is that Tom Cruise made Top Gun: Maverick happen. But the guy who got the ball rolling more than a decade ago—before Cruise, before producer Jerry Bruckheimer, way before those Paramount Global executives who wanted to dump the movie on a streamer, causing Cruise to put his foot down and set it up to gross $1.5 billion worldwide, the biggest 2022 release so far—was actually David Ellison. And it’s one of a few pretty significant and instructive success stories for Ellison this year.
For obvious reasons, it pains me a little to write that. To say Ellison was born on third base is an insult to baseball. The Oracle heir arrived in Hollywood more like a wannabe Bond villain: a young, icy-blue-eyed aerobatic pilot, armed with Larry’s billions, an oceanside Malibu lair, connections to evil-genius family friends David Geffen and Steve Jobs, and a secret-weapon consigliere in deal attorney Skip Brittenham, whose services are typically reserved for Hollywood’s .01 percent. I remember in Ellison’s early press coverage that you could practically feel Paramount executives salivating over the fact that this 20-something USC dropout and sometime actor had agreed to co-finance a big-budget movie slate. “Having a producer who wants to bring us big commercial ideas and also invest with us in franchise pictures is the sweetest kind of deal that exists,” a giddy film chief Adam Goodman boasted to the L.A. Times in 2011.
Dumb money is indeed the sweetest kind for cash-strapped movie studios. And I’m pretty sure that neither Goodman nor anyone else at Paramount thought we’d still be talking about Ellison more than 11 years later. If anything, his younger sister Megan Ellison had the taste and disposition to woo top talent for the long haul. David was the populist fanboy, way more interested in buying into the franchises he loved as a kid than creating art or a winning business model. In that way, he was the quintessential financier nepo baby. And, at least initially, Skydance was positioned alternatively as a financial backstop for super-pricey Mission: Impossible or Star Trek movies and as an ATM for risky flops like Gemini Man and those terrible Terminator sequels.
But lately, with Ellison turning 40 in about a week, what he’s doing at his Skydance Media can’t be written off as Larry’s largesse. Yes, Ellison bought his way into Hollywood. And sure, Skydance is still known more for attaching itself (and its money) to existing I.P. rather than developing and launching its own original hits. But in addition to producing and financing 25 percent of Paramount’s top-grossing movie ever, which entitles Skydance to 40 percent of the backend after a break-even point around $450 million, according to sources, Ellison also did the following just this year:
- Released The Adam Project, the second most-watched film on Netflix, per its own metrics;
- Started production on The Old Guard 2, the closest thing Netflix has to a studio-style original film franchise;
- Released Reacher, one of Prime Video’s biggest shows of the year, per third-party viewership data (Amazon doesn’t reveal numbers), along with Season 3 of Jack Ryan, another big hit, both with Paramount;
- Released Luck, its first original animated film from Skydance Animation head John Lasseter, as part of its deal with AppleTV+
- Signed a separate, lucrative Apple deal for live-action films, with two pictures guaranteed per year with budgets up to $125 million and a minimum $25 million payout; much better terms than the Paramount relationship, though Skydance’s backends are bought out;
- Got into business with the NFL to make scripted and unscripted programming;
- And closed a $400 million funding round led by KKR, which joined RedBird Capital and Tencent as investors. Skydance is now valued at $4 billion, if you believe that sort of thing.
There’s a bunch of other stuff too, including some flops, like Zac Efron’s recent The Greatest Beer Run Ever, and some big projects coming in 2023, like another Mission: Impossible. It’s a pretty impressive slate, even if Skydance doesn’t own that Paramount I.P. And the truth is, even if his company didn’t stand to make nine figures from Top Gun: Maverick, Ellison would have ended 2022 as a decent avatar for how to navigate the phase of downsizing and consolidation that Hollywood is all but certainly entering.
By this point, it’s pretty clear that the global streaming services that have dominated film and TV during the past half-decade are in partial retreat, an orientation that has caused many in Hollywood to proclaim the sky is falling. But what if this pullback is actually good for many of the non-streamer players in town, specifically the scaled independent production companies that have always been so important to the film and TV ecosystem? Demand for high-end premium content is still significant, of course, at the streamers and elsewhere, and if those global outlets are watching their tanking stock prices and are less likely to want to front all the production costs, there’s potentially a greater opportunity to fill that void.
I was talking about this market opportunity a couple months ago with Bill Block, the agent-turned-executive who runs the indie Miramax. He’s quietly had a pretty great year financing and releasing films theatrically (Halloween Ends, $140 million worldwide, with Universal), selling them off to streamers (Confess, Fletch, to Showtime), and going the festival sale route (Alexander Payne’s The Holdovers, which sold to Focus Features for about $30 million, the biggest deal in Toronto). This is a real business. And as the streamers make less product themselves, Miramax and similar players might benefit from generating their own projects and taking them to the global market.
Think about companies like wiip or Fifth Season (formerly Endeavor Content), which leverage the relationships with the agencies that birthed them (CAA and WME) to package projects that ostensibly offer better economics to talent than going through the front door at a streamer. Or the production outfit MRC, which cuts the pretense and directly incentivizes UTA (via a joint venture called Civic Center Media) to steer its clients into MRC shows like Amazon’s The Terminal List, starring UTA-er Chris Pratt. It’s why there has been a lot of interest from potential buyers in Neon, the independent distributor (though the rumored sale to investor/film financier Steve Rales is off for now, I’m told by a good source). These kinds of companies could now benefit from less aggressive streamers competing to lock up that talent and their top projects.
Skydance also benefits, with the added bonus of the Paramount and now Apple relationships—and, don’t forget, the ability to get Geffen to comment for a Times profile, one of my life goals. Many point to the pandemic as the inflection point for Skydance, when it began aggressively selling projects like The Tomorrow War (Amazon) and Old Guard to streamers, and found greater footing in TV. Ellison also brought in respected outside investors like Korea’s CJ and got another line of credit from J.P. Morgan, telegraphing to the community, again, that this wasn’t just an Ellison family foray.
Plus, there’s Lasseter. Most animation insiders expect the risky hire of the former Disney chief, fresh from his exit amid MeToo claims, to soon bear sweeter fruit. Luck, which Lasseter inherited midway through production, didn’t light the world on fire (though my kid liked it and asked to watch it again), but the conveyor belt is just ramping up, and Apple, which is very familiar with Pixar thanks to Jobs, seems committed to spending what it takes to make Pixar-style movies. According to two people who have spoken with him, Lasseter has been extremely critical of Lightyear and Strange World, Disney’s two $200 million animated flops this year, especially the one based on the Toy Story character that Lasseter created and nurtured for 25 years. He sees big opportunity for a realignment in the animation space. (Skydance declined to comment for this column.)
For Ellison, all of this is a far cry from the early 2010s, when Taylor Lautner—the Taylor Lautner—backed out of pocketing Skydance’s $7.5 million to star in a flying drama called Northern Lights when he learned Ellison planned to co-star. Agents and other executives I’ve asked about Ellison in recent weeks almost universally say he’s become a consummate professional, hyper-focused and perhaps overcompensating for the preconceptions people might have about Larry’s flyboy son. Indeed, when I had breakfast with Ellison at Republique a few weeks ago, he seemed more at ease and less anxious and awkward than he was even a few years ago. A pretty normal guy, even as he got into his black Lamborghini.
Ellison’s biggest flex might be a best picture Oscar win for Top Gun, which was once unthinkable but now seems totally possible, especially in this challenged season for movies. You can tell the other studios are afraid of TGM because I’m hearing all kinds of chatter: Why is nobody talking about how Cruise is a cult leader?; You know Jerry’s a jingoistic Republican, right?; Is David Ellison the kind of entitled rich producer we want to be the face of Hollywood?
Whatever. Maybe the son of one of the world’s richest men isn’t the best guy to be on stage with Cruise accepting best picture. But unlike so many in Hollywood these days, Ellison seems to care about the audience, the masses that once wholeheartedly endorsed Hollywood products, and what they might want to watch today in their free time. Populism has always been a better business than prestige. And in that sense, the success of Skydance, if it maintains this recent run, might ultimately be the success of the entire entertainment industry.