A Hollywood upstart looks to become a major player

But Ellison’s script has had a surprise twist—success. As much of the entertainment industry struggles to adjust to the economic realities of the streaming era, with layoffs and cost-cutting becoming the norm at Disney, Warner Bros. Discovery and NBCUniversal, Ellison has built his production company, Skydance Media, into a powerful and profitable maker of big-budget movies and TV shows.

Now the 41-year-old son of software billionaire and Oracle co-founder Larry Ellison is exploring a complex deal to take control of Paramount Global that could catapult him to media moguldom.

Ellison and investors in Skydance—whose hits include “Top Gun: Maverick," “The Family Plan" and “Reacher"—are discussing a bid for media titan Shari Redstone’s controlling stake in Paramount parent National Amusements. If successful, they would later seek to merge Paramount with Skydance.

Though far from certain, the transactions put Ellison in the spotlight, testing whether his industry savvy extends beyond picking hit shows and films. Such a deal would mark the start of a long-expected reshaping of entertainment industry ownership after years waning moviegoing, cable declines and costly pivots to streaming.

“There are a lot of people with strong connections to lots of money and most of them turn around after five years with their tail between their legs," said Jason Blum, founder and chief executive of horror-movie shop Blumhouse. Ellison has stayed focused on his core mission of mass-market entertainment and built a financially successful company, said Blum, who doesn’t currently have business with Ellison.

Entertaining the masses

Since launching in 2010, Skydance has positioned itself as a boutique of big-budget fare for streamers. When major studios such as Warner Bros. and Disney decided to stop selling to Netflix and other streaming platforms and instead focus on building their own, Skydance saw an opening and pounced.

Among its streaming credits are Netflix’s Arnold Schwarzenegger action show “Fubar" and Amazon Prime Video’s hit show “Reacher," inspired by the Jack Reacher novels. Skydance made “The Family Plan," starring Mark Wahlberg, for Apple TV+, which became the service’s most-watched movie ever after premiering last month.

Skydance, which now has about 1,300 employees, partnered with Paramount on Tom Cruise’s “Top Gun: Maverick" and “Mission: Impossible—Dead Reckoning: Part One," as well as “Transformers: Rise of the Beasts" and additional “Mission Impossible" and “Top Gun" movies that are in the works.

The company has had misfires, too, including the movies such as the Will Smith vehicle “Gemini Man" and “Terminator: Dark Fate," which were critical and commercial disappointments.

A recurring knock on Ellison is that his tastes are pedestrian. His sister Megan’s Annapurna Pictures makes critically acclaimed fare such as “Booksmart," “She Said" and “Zero Dark Thirty," which won an Oscar for best picture in 2013. Skydance content has more populist appeal.

That can be an asset in a town often criticized for being too coastal and insular in greenlighting film and TV projects.

“He’s not looking down on the masses," said Ann Blanchard of Creative Artists Agency. “He wants to make sophisticated programming for millions of people."

Skydance has committed hundreds of millions of dollars to animation, hiring former Pixar creative chief John Lasseter in 2019 as head of its animation unit, which has ballooned to 800 employees. But it has had mixed success: Apple and Skydance ended an animation partnership after just one movie—2022’s “Luck." Its first animated movie for Netflix, “Spellbound," is set to make its debut later this year.

Learning to fly

Ellison was raised primarily by his mother, and as a child was obsessed with flying and movies. He learned to fly a plane at 13 and by his late teens, was participating in air shows and doing competition aerobatics, steering planes through complex maneuvers to entertain crowds below.

When he wasn’t in the air, his mother would often take him and his younger sister, Megan, to the movies. The pair would binge films like “Star Wars" and “Rocky" at home.

To his father’s chagrin, Ellison opted to study filmmaking at the University of Southern California, instead of attending one of the Ivy League schools where he had been accepted. He dropped out in pursuit of real-life experience. With his blond hair and steely blue eyes, he co-starred as a World War I fighter pilot in the 2006 film “Flyboys" in his 20s. The movie—much of which was funded by his father—flopped, as did a second movie, “Northern Lights," that he produced and starred in.

With cash from his father and advice from mentors including Steve Jobs and David Geffen, he launched Skydance. Advice on how to navigate the snake pit of Hollywood dealmaking came from insiders such as renowned lawyer Skip Brittenham and Jeff Berg, a powerful agent and Oracle board member.

Ellison’s father was close with Jobs, the Apple co-founder who was also the architect of Pixar Animation Studios, offering young David a front-row seat for the creation of one of the late 20th century’s most successful entertainment companies. Among the lessons: It’s important to take a hands-on approach to matters large and small, and you don’t stop working on something until it’s great. He also learned from Jobs that while knowing how to negotiate is important, nobody goes to see deals—they go to see movies.

Ellison quickly proved to be both a deft dealmaker and producer. His first movie from a co-financing deal with Paramount was the western drama “True Grit," a box office and critical smash that earned 10 Oscar nominations.

Ellison steeps himself in the details of a project and can talk about budgets, shooting schedules and marketing with expertise, said executives who have worked with Skydance on movies and television shows. He’s willing to pick up the phone to lobby for projects he cares about.

After the successful debut of “Reacher" on Prime Video in 2022, Ellison called Amazon Studios chief Jen Salke to make the case to order a series based on James Patterson’s Alex Cross novels. The project had been languishing there since 2020 and was starting to be pitched elsewhere. Ellison told Salke Amazon was making a mistake by passing on “Cross," which he believed could be another “Reacher." An hour later Salke called back and gave the series the green light, a person familiar with the conversation said.

A lasting business

With Ellison’s attention to detail comes grumbling from those he works with that he also can be inflexible in a business that often requires compromise. He doesn’t seem to distinguish between projects for which Skydance is a quiet financier versus a creative partner, some studio executives say.

Should Ellison’s deal to buy a majority stake in National Amusements work, it will give him power over an iconic studio and a vast library of films and TV shows. He will also have to determine the future of Paramount’s CBS broadcast network, a struggling cable business that’s home to MTV and Nickelodeon, and a 1,300-screen movie-theater chain.

Paramount’s next owner will also have to decide whether to keep pumping cash and content into its Paramount+ streaming service, which is battling much bigger and richer competitors.

In addition to the Ellison family, stakeholders in the closely held Skydance include private-equity firms Redbird Capital Partners and KKR as well as Chinese videogame and social-media company Tencent Holdings. Skydance said it surpassed $4 billion in value in 2022 after raising $400 million in new capital.

While the studio doesn’t disclose its results, people familiar with its finances say it has been profitable for several years, including 2023. Skydance missed its projected revenue last year, largely because of labor strikes that shut down the industry for months, but expects to meet its forecast in 2024 and 2025, the people said.

If Ellison fails to gain control of Paramount, Skydance may still look to acquire smaller production companies to enhance its portfolio, people close to the company’s investors said.

“No one should underestimate his commitment to building a lasting business," said United Talent Agency partner Chris Hart.

Jessica Toonkel contributed to this article.

Write to Joe Flint at Joe.Flint@wsj.com