Analysis-David Ellison's appointment of Kreiz brings cost-cutter to Paramount-Warner Bros Discovery

By Deborah Mary Sophia and Neil J Kanatt Thu, October 1, 2026 at 7:54 PM UTC

0

By Deborah Mary Sophia and Neil J Kanatt

Oct 1 (Reuters) - David Ellison's choice of Mattel CEO Ynon Kreiz as his co-captain at the new Paramount-Warner Bros Discovery signals what the media behemoth will care about most: running a lean, cost-efficient business that can pump more money out of its storied franchises.

Kreiz's tenure at the Barbie doll-maker and his previous stint leading production company Endemol have been marked by cost-cutting and restructuring efforts aimed at improving profitability and overall output.

That skillset positions Kreiz well to take on the task of knitting together two legacy media giants saddled with roughly $80 billion in debt while delivering the $6 billion in cost-savings promised from the industry-shaping merger.

But struggles at Mattel and privately held Endemol raise some questions about Kreiz's performance and his ability to take on the much larger Paramount-Warner.

Having arrived at Mattel in 2018 with a mandate to turn around the struggling toymaker, Kreiz executed over $1.5 billion in savings through thousands of job cuts and a simpler manufacturing strategy.

That helped Mattel top $1 billion in annual adjusted EBITDA in 2021, hit a 19% revenue growth rate and boost its share price by 24% that year.

But while Kreiz started off strong, Mattel has not been able to keep up those rates over the next several years, marred by pandemic pressures, an inflation-led slowdown in consumer spending and tariff costs.

The stock has slipped 2% over Kreiz's tenure so far, drastically underperforming a near 200% jump in the S&P 500 index.

"The CEO once cheered for expanding the company's margins into double digits with a strong long-term strategy walks away with the stock roughly where it was when he took office over," said Zachary Warring, an analyst at CFRA Research.

Similarly at Endemol, known for the 'Big Brother' reality TV franchise, Kreiz's reorganization efforts helped reduce costs by 20% during his three-year tenure, but the company's revenue and profits continued to fall, according to a Financial Times report. Kreiz exited the company in 2011 over strategic differences.

Shares of Mattel, however, were up about 20% at $15.22 in late-trading on Thursday after the Wall Street Journal reported that Authentic Brands was discussing a more than $20-a-share offer for the company.

Mattel declined to comment on the report, which also said there was no ongoing formal sale process for the company.

CHALLENGES REMAIN DESPITE 'OPERATING FIREPOWER'

As co-CEO, Kreiz will run Paramount-Warner Bros Discovery alongside Ellison, but will focus squarely on operational efforts and day-to-day management, while Ellison oversees creative development and overall strategy.

Advertisement

"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," Ellison said in a statement on Wednesday.

Among challenges for Kreiz in executing the cost-savings are Paramount's promises in its antitrust settlement. These include spending at least $300 million more each year in domestic film production, continuing to operate both legacy studios' production lots and honoring existing bargaining agreements with Hollywood unions — all of which shut off easy paths to synergies.

Kreiz is also expected to supercharge intellectual property (IP) at the new Paramount-Warner Bros Discovery to fuel growth across potential new areas of business.

"Ynon's entertainment background fueled his tenure at Mattel, transforming the toy titan into an IP-driven powerhouse focused on building franchises from its toy and game lines," said toy industry expert James Zahn, editor-in-chief at trade publication The Toy Book.

"Taking the reins at the combined Paramount-Warner Bros is a natural move for a leader who's always had Hollywood in his eyes, and it places him in control of familiar IP that still retains a Mattel connection."

'BARBIE' MEDIA SUCCESS HARD TO REPLICATE

At Mattel, Kreiz turned its brands into box office dollars, launching "Mattel Films" to license the company's intellectual property to studios. That effort eventually led to the 2023 release of Hollywood blockbuster "Barbie," which is currently Warner Bros' highest-grossing film ever globally.

But that track record has been mixed. The "Masters of the Universe" live-action film released this year tanked at the box office, even though it helped build out the franchise and more than triple gross billings year-to-date.

A live-action Hot Wheels feature film is currently in development at Warner Bros with "Wicked" director Jon Chu set to helm the project, while other Mattel franchises reportedly exploring Hollywood projects include "Barney," "Polly Pocket" and "American Girl".

But Raymond James media analysts said Kreiz's experience would help the new Paramount more aggressively monetize its IP across platforms.

His tenure running Endemol and YouTube channel network Maker Studios — which Disney later snapped up for $500 million — also shows his programming bona fides as Paramount looks to further expand its streaming business.

Despite commanding a massive library of franchises, Warner Bros Discovery has long had a monetization shortfall compared with industry giant Disney, which has banked on its theme park infrastructure and merchandising power to generate more dollars.

Warner Bros earns about 30 cents for every dollar that Disney earns circulating IP through its ecosystem, Raymond James analysts noted. Paramount also has several hit children's franchises but has not created a consumer products portfolio as well as Disney, Emarketer analyst Ross Benes said.

"We believe IP monetization across toys, games, merchandise, experiences, etc, will be a significant focus of the combined company ... the appointment makes sense given the size of the combined company and complexity of the integration ahead," Raymond James analysts said.

(Reporting by Deborah Sophia, Neil J Kanatt and Harshita Mary Varghese in Bengaluru; Editing by Joyjeet Das and Shilpi Majumdar)

Original Article on Source

Source: “AOL Money”