Billionaire Larry Ellison to Own 77.5% of ‘New Paramount’ Following Skydance Merger
Billionaire Larry Ellison to Own 77.5% of ‘New Paramount’ Following Skydance Merger
The father of incoming Paramount CEO David Ellison will play a major part in the company’s new ownership structure.
The Paramount merger saga has been an arduous one throughout the majority of 2024, but, at long last, it appears that the transaction is finally about to go through. Thanks to Edgar Bronfman Jr.’s decision to end his pursuit of Paramount, there’s nothing stopping the two-step merger agreement between Paramount and Skydance Media from proceeding, apart from interference from federal regulators. That appears unlikely, but as Paramount and Skydance begin filing the necessary paperwork to get the deal approved with the Federal Communications Commission (FCC), more details are emerging about the future of CBS in the hands of new ownership, as well as the involvement of Skydance CEO David Ellison’s billionaire father Larry.
Key Details:
- Larry Ellison is set to own 77.5% of the holding company that controls Paramount’s voting stock.
- The $1.5 billion cash infusion the Ellisons are preparing to give Paramount will help the company revitalize CBS.
- Shari Redstone will get $180 million in severance, in addition to the hundreds of millions she’ll make from the sale of her stock.
The new FCC filings by Paramount and Skydance give a view of what the new company’s ownership structure will look like. Once the merger is complete, David Ellison will take over as the new CEO of Paramount Global, while his father — Oracle co-founder and billionaire Larry Ellison — will own 77.5% of National Amusements Inc., the holding company that controls the majority of Paramount’s voting stock.
The younger Ellison’s investing partner RedBird Capital will control the other 22.5% of National Amusements. These revelations in the FCC filings come ahead of a planned review of the merger by that governmental body, which is a standard procedure in any transaction involving the change in ownership of broadcast licenses. Since Paramount controls CBS, the purchase and merging of the company with Skydance necessitates an FCC review.
Skydance made sure to point out that neither it nor the Ellison family controls any other broadcast licenses as of now, so there will be no harm done in terms of the reduction of competition. In addition, Skydance pledged that the $1.5 billion it plans to invest in the Paramount balance sheet will help it continue to bolster CBS for the future by “[making] strategic investments in the legendary newsgathering and reporting efforts of the national CBS television network and the company’s [owned and operated] local stations.”
“These investments will ensure that both the national network (which reaches all television markets) and the O&Os will continue to serve as trusted sources of news,” the filing continued. “The investment in the CBS television network similarly will help ensure popular live sports and highly rated entertainment programming remain available to viewers over-the-air and will benefit CBS affiliate stations.”
Redstone Gets Richer
If the FCC doesn’t stand in the way of the Paramount sale, current controlling shareholder Shari Redstone is in for a massive payday. Bloomberg reports that the heir of Sumner Redstone stands to gain $180 million in severance from the deal, in addition to the hundreds of millions she’ll make when she cashes out her shares in the sale.
Deadline is offering details on how quickly that payday could come. The FCC review process typically takes around 180 days, though that timeline is strictly informal. The first step in the proceedings is a public comments window; anyone opposed to the transaction will have until Oct. 7 to file an official objection.
Some Paramount shareholders have already signaled that they’re not thrilled about the deal. Investor Mario Gabelli, who represents clients with a huge swath of Class-B Paramount shares, has already filed a lawsuit to get a closer look at Paramount’s finances in order to determine his next steps. Another Class-B investor has sued as well, claiming that the deal unfairly enriches Redstone and Class-A shareholders at the expense of non-voting stock owners.
Petitions against the merger won’t automatically cause the transaction to be halted by the FCC, but the Biden administration has been wary of mergers that could have an effect on labor markets. Skydance made sure to mention the history of David Ellison and executive Jeff Shell — who will serve as Paramount's new president — have in working with organized labor.
“Mr. Ellison and Mr. Shell will draw upon these experiences to ensure that New Paramount continues to be a source of robust demand for Guild-created programming and maintains its cooperative relationships with the organized labor organizations of which its employees and contractors are or may become members,” the Skydance application said.
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