Skydance Media and Paramount Global have announced a merger, marking a significant shift for one of Hollywood’s oldest studios. The two-step process involves Skydance and its partners acquiring National Amusements, which holds the Redstone family’s controlling stake in Paramount, for $2.4 billion in cash. Following this, Skydance will merge with Paramount, offering $4.5 billion in cash or stock to shareholders and providing an additional $1.5 billion to Paramount’s balance sheet.
This merger signifies the end of an era for Shari Redstone, whose father, Sumner Redstone, transformed the family’s drive-in movie theater chain into a media empire that included Paramount Pictures, CBS, Comedy Central, Nickelodeon, and MTV. Shari Redstone emphasized the need to fortify Paramount for the future while maintaining a focus on content.
Combining Paramount, known for classic films like “Chinatown,” “The Godfather,” and “Breakfast at Tiffany’s,” with Skydance, which has partnered on recent hits like “Top Gun: Maverick” and “Mission: Impossible-Dead Reckoning,” aims to strengthen the studio’s position in the industry. David Ellison, founder of Skydance, will become chairman and CEO of the new Paramount, while Jeff Shell, former CEO of NBCUniversal, will serve as president.
Ellison inherits a company facing significant challenges due to the streaming revolution. Paramount has lost nearly $17 billion in value since late 2019, with its traditional television business declining faster than its Paramount+ streaming service could turn a profit. Bob Bakish, the former CEO, was ousted in April after clashing with Redstone over the Skydance deal. He was replaced by a trio of executives who proposed $500 million in cuts, asset sales, and a possible joint venture for Paramount+.
Ellison plans to bring advanced technology and infrastructure to Paramount+ and Pluto TV while enhancing traditional networks. Skydance is committed to revitalizing the business and enriching Paramount with contemporary technology and creative discipline.
The deal came together after months of negotiations, which almost derailed on June 11. Skydance and its partners had agreed to acquire National Amusements, owning 77% of Paramount’s voting shares, but talks stalled over non-Redstone shareholder approval, a condition Skydance initially rejected. Other bidders, including Steven Paul, Edgar Bronfman, and Barry Diller, showed interest, but no deals materialized.
Ellison and Redstone resumed constructive discussions, leading to an agreement. Skydance sweetened the Redstone family’s payout to $1.75 billion and enhanced legal protections against shareholder lawsuits. The final terms involve an all-stock transaction valuing Skydance at $4.75 billion, creating a company with an enterprise value of $28 billion.
Ellison’s group will own 100% of the new Paramount’s Class A voting shares and 69% of its Class B shares. The deal gives Paramount 45 days to find a better offer, leaving room for potential changes in this evolving merger process.
READ MORE: