David Ellison’s decision to bring Mattel CEO Ynon Kreiz on as co-CEO of the newly combined Paramount-Warner Bros. Discovery highlights the company’s focus on cost control, operational efficiency and extracting more value from its extensive entertainment franchises.
Kreiz has built his reputation around restructuring and reducing costs. During his tenure at Mattel, which began in 2018, he implemented more than $1.5 billion in savings through thousands of job cuts and a simplified manufacturing strategy.
Those measures helped Mattel surpass $1 billion in annual adjusted EBITDA in 2021, while revenue grew 19% and the company’s stock gained 24% that year. However, the momentum weakened in subsequent years as the company dealt with pandemic-related disruption, weaker consumer spending amid inflation and higher tariff costs.
Mattel shares have fallen about 2% during Kreiz’s tenure, compared with a gain of nearly 200% for the S&P 500 over the same period. CFRA Research analyst Zachary Warring said Kreiz had entered Mattel with ambitions to expand margins but was leaving with the stock roughly where it started.
Kreiz also has a history of restructuring entertainment businesses. During his three years at Endemol, the production company behind “Big Brother,” his reorganization efforts reduced costs by about 20%, although revenue and profits continued to decline, according to a Financial Times report.
A Difficult Integration Ahead
Kreiz will oversee day-to-day operations and the integration of Paramount and Warner Bros. Discovery alongside Ellison, who will concentrate on creative development and broader strategy.
Ellison described Kreiz as a partner bringing the “operating firepower” required for the integration, with their responsibilities divided according to their respective strengths.
The new company faces roughly $80 billion in debt and has committed to delivering about $6 billion in cost savings. However, some straightforward opportunities for cutting expenses will be limited by commitments included in Paramount’s antitrust settlement.
Those obligations include increasing annual domestic film production spending by at least $300 million, continuing to operate both companies’ legacy production facilities and honoring existing agreements with Hollywood unions.
Kreiz will also be expected to generate more revenue from the combined company’s intellectual property. His Mattel tenure included the creation of Mattel Films, which turned the company’s brands into Hollywood projects and ultimately produced the 2023 blockbuster “Barbie,” Warner Bros.’ highest-grossing film globally.
The strategy has produced mixed results. The live-action “Masters of the Universe” underperformed at the box office, although it contributed to broader franchise expansion. Other Mattel properties, including Hot Wheels, Barney, Polly Pocket and American Girl, have also been linked to potential film or television projects.
Kreiz’s experience with Endemol and digital media company Maker Studios, which Disney later acquired for $500 million, could also prove useful as Paramount-Warner seeks to expand its streaming operations.
Analysts at Raymond James said the combined company could place greater emphasis on monetizing its intellectual property through toys, games, merchandise and experiences. Warner Bros. Discovery has a vast franchise library but has historically generated less revenue from its intellectual property ecosystem than Disney, whose theme parks and consumer-products businesses provide additional channels for monetization.
For Kreiz, the new role will therefore combine two of his defining responsibilities: reducing costs across a complex organization while finding new ways to turn well-known entertainment brands into recurring revenue.
