Skydance Set to Pay $8 Billion to Gain Control of Paramount
Paramount: Now (finally) Under New Ownership! Well, almost. A Paramount Global special committee has approved a deal that will merge the company with Skydance after David Ellison acquires National Amusements, Inc. (NAI) for about $2 billion.
The National Amusements theater chain has a controlling interest in Paramount. Skydance Media CEO Ellison is paying for that control, and then he’ll make Paramount buy his production company.
All told, it is expected to cost Ellison and his financial backers at RedBird Capital Partners in the ballpark of $8 billion to make this happen, as first reported by CNBC’s David Faber. On top of Shari Redstone‘s $2 billion for her family’s NAI, $4.5 billion more will go to current Paramount shareholders; another $1.5 billion in cash will be contributed to Paramount’s balance sheet. The numbers are pretty fresh and could still change some, a person with knowledge of the goings-on tells IndieWire.
The ball is now in Redstone’s court to approve the deal, which could be announced any day now. The ink is unlikely to be dry by tomorrow’s 9 a.m. ET Paramount Investor Day, our source says.
“We received the financial terms of the proposed Paramount/Skydance transaction over the weekend, and we are reviewing them,” a National Amusements rep told IndieWire.
Spokespeople for Paramount and the Skydance/RedBird partnership declined comment to IndieWire.
Paramount Global houses Paramount Pictures, CBS, Paramount+, Pluto TV, and cable channels like Nickelodeon and BET. Skydance and Paramount’s film studio have collaborated on Tom Cruise films like the “Mission: Impossible” franchise and “Top Gun: Maverick.”
Once the deal is done, which will be a long way off considering the government will get involved (especially the FCC over the CBS of it all), Ellison is expected to be the new company’s CEO. Former NBCUniversal boss Jeff Shell has been working with Skydance on this deal and is expected to be president of the newly merged company. RedBird CEO (and former CNN chief) Jeff Zucker would likely have a large role at the combined company, as could Skydance chief creative officer Dana Goldberg.
Reports of a Skydance deal first came in December. In May, Skydance sweetened its offer for the non-voting shareholders of Paramount Global. That was pretty much just a PR move.
There were other players in this game. Byron Allen offered $30 billion for the entirety of Paramount Global, but seemingly no one believed he had the funding. In December, Warner Bros. Discovery CEO David Zaslav met with Paramount CEO Bob Bakish for potential merger talks, but that fell apart.
Private-equity firm Apollo made an offer of $11 billion to purchase just Paramount’s film and TV studio, which would force the company to break apart. The Redstone Family has never been open to that. Apollo later offered a reported $26 billion for Paramount Global as a whole, including the company’s debt. Still nada.
Apollo even sweetened its deal by recruiting Sony to serve as its partner in making a bid, the idea being that Sony ensured Apollo’s money — and intentions — were good. Sony and Apollo formally submitted a $26 billion offer for Paramount on May 5 after its exclusive negotiating period with Skydance lapsed.
Clearly, Skydance didn’t go anywhere. The deal follows the ouster of Paramount Global CEO Bob Bakish on April 29, officially announced moments before a Paramount earnings call. Bakish was replaced on an interim basis by Brian Robbins of Paramount Pictures, Chris McCarthy of MTV Entertainment Group and Showtime, and George Cheeks of CBS.
Shari Redstone (pictured above with Cruise), 69, is the daughter of late media mogul Sumner Redstone, who leveraged his own father’s regional theater chain into controlling interest of Paramount Global (fka ViacomCBS). The Redstone family and its trust, run by Shari, owns about 10 percent of actual Paramount Global but 77 percent of its voting shares.
