Paramount Global has terminated WPP as its media agency of record in a cost-cutting strategy before its $8 billion merger with Skydance Media. The move follows a wide-ranging $2 billion cost-cutting plan while the company reorganizes to tighten up operations under new Skydance leadership.
Paramount Fires WPP Amid Skydance Merger, Seeks $2 Billion in Savings
In a dramatic and strategic move pre-eminent of its planned merger with Skydance Media, Paramount Global has severed ties with WPP, its media agency on record. The move, which caught many in the advertising and media spaces by surprise, forms an integral part of Paramount’s strategy to cut $2 billion from its operating costs.
In accordance with insiders, Paramount’s advertising department is now bringing media buying in-house. The move is a drastic deviation from decades of the standard agency relationships and highlights the urgency of the firm to take matters into its own hands, including spending and changing faster amid a volatile media environment.
The timing is not an accident. Paramount is poised to finalize a $8 billion high-stakes merger with Skydance Media, led by David Ellison. The deal, if completed, will place Ellison at the helm of the newly-merged entertainment behemoth. His plan is simple: cut fat costs, go all-in on technology, and invest in content innovation.
“This merger creates one of the most forward-thinking and agile media companies in the world,” said a source familiar with the deal. “But it has to start with tough choices.”
WPP had been a record media agency for Paramount for years, managing much of its ad strategy, and spending. As streaming revenues fluctuate and ad-supported platforms change, however, Paramount is rethinking not only its financial model but how it engages with consumers. By avoiding outside spending on media, it hopes to gain more control over its brand messaging and get a better return on investment.
Paramount had already started making drastic changes even prior to the announcement of the Skydance deal. These are letting go of hundreds of employees, restructuring studio operations, and assessing the fate of underperforming assets. Taking WPP out of its marketing calculation is the latest — and possibly one of the most symbolic- steps to signal that nothing is off-limits.
The deal with Skydance, which has produced blockbuster franchises like Top Gun: Maverick and the Mission: Impossible series in partnership with Paramount, is expected to close by the third quarter of 2025. If regulators approve, David Ellison will become CEO of the combined entity, while former NBCUniversal CEO Jeff Shell is expected to play a significant leadership role.
Behind the scenes, there’s an aggressive drive to create a future-proofed entertainment business- one that can compete with streaming giants while staying financially nimble. The WPP departure is a sign that Paramount is not afraid to shake up legacy arrangements in the pursuit of that ambition.
Until then, everyone is waiting with bated breath for the regulatory clearance of the merger and just how far Paramount will stretch to achieve its aggressive cost-cutting goals. One thing, though, is certain: the company is completely in transformation mode- and it’s leaving no stone unturned.
