Paramount and Skydance Announce Deal

(Left) Paramount Pictures logo. Photo: Paramount. (Right) Skydance logo. Photo: Skydance.

Preview:

After months of negotiating, Paramount Global and Skydance Media are to merge.
Skydance boss David Ellison will become Paramount’s CEO.
Other companies had looked to make their own deal for the studio.

It has been months of feeling like Paramount Global was a Tinder user swiping left on potential suitors as it was courted by various groups for mergers and acquisitions.

Now, it appears that it has finally found the right partner, as, after rejecting one offer from the company, a special committee of Paramount’s board –– and now the full board of directors –– has approved an $8 billion takeover from Skydance Media.

What has happened so far with the deal?

Simon Pegg as Benji Dunn, Rebecca Ferguson as Ilsa Faust, Tom Cruise as Ethan Hunt and Ving Rhames as Luther Stickell in 'Mission: Impossible - Fallout, from Paramount Pictures and Skydance.

(L to R) Simon Pegg as Benji Dunn, Rebecca Ferguson as Ilsa Faust, Tom Cruise as Ethan Hunt and Ving Rhames as Luther Stickell in ‘Mission: Impossible – Fallout, from Paramount Pictures and Skydance. ©2021 Paramount Pictures. All Right Reserved.

Like many of the big legacy media companies, Paramount has found itself struggling with debt and lowered earnings, especially when it comes to its streaming service.

It has, naturally, been a target for interest from other big companies –– at one point, there was talk of a potential merger with Warner Bros. or Universal.

But among the most eager to take control has been David Ellison’s Skydance Media, which already has connections with the studio, since it co-produces the likes of the ‘Mission: Impossible’ movies and the ‘Star Trek’ movie franchise.

Ellison, working with investment partners, made a previous overture to buy a controlling interest in National Amusements Inc., the entity owned by Shari Redstone which has a majority share in Paramount Global. It was rejected (partly because of concerns from other shareholders), but a new version has been accepted.

The current plan is for Skydance to take control of Paramount and for the companies to merge, which has largely been seen as a positive, since it means much of the studio stays intact.

Here’s Shari Redstone’s statement on the deal:

“In 1987, my father, Sumner Redstone, acquired Viacom and began assembling and growing the businesses today known as Paramount Global. He had a vision that ‘content was king’ and was always committed to delivering great content for all audiences around the world. That vision has remained at the core of Paramount’s success and our accomplishments are a direct result of the incredibly talented, creative, and dedicated individuals who work at the company. Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king. Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment. As a longtime production partner to Paramount, Skydance knows Paramount well and has a clear strategic vision and the resources to take it to its next stage of growth. We believe in Paramount, and we always will.”

Right now, the company is being run by three Chief Executive Officers, but if (increasingly when) Skydance takes over, David Ellison would become the new CEO.

Paramount has 45 days to entertain other offers before formally accepting this deal –– and Skydance would receive a $400 million payoff if it should go a different route.

Who else has been interested in Paramount?

Sony Pictures Logo. Photo: Sony Pictures.

Skydance is far from the only company that has shown interest, as the likes of Barry Diller (a former president of the company), rival studio Sony and investment company Apollo have all considered bids for Paramount.

When will the deal be finally sealed?

Assuming no other issues come up –– since regulators still have to assess this current deal –– and Paramount doesn’t somehow decide to go with another option, the deal should be officially closed by mid-2025.

‘Transformers One’. Photo: Paramount Pictures.

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