Paramount Owner Prefers Skydance Deal to Apollo’s $11B Offer; Hopes to Sell Entire Company Instead of Pieces
Shari Redstone holds Paramount’s ultimate fate in her hands, and appears to be narrowing her focus to David Ellison’s offer for the company.
Another day, another update on the potential sale of Paramount Global. Earlier this week, it was reported that the private equity firm Apollo Global Management had offered $11 billion for Paramount’s TV and movie studios, which constitutes a greater sum than the entire company’s current market cap. But a new report from the Financial Times suggests that Paramount’s controlling shareholder Shari Redstone is not convinced by the offer, and is leaning toward a bid by billionaire David Ellison, owner of Skydance Media.
- Redstone prefers to sell Paramount as a whole company, as opposed to stripping it for parts and selling it piece by piece.
- Ellison may bring in former NBCUniversal CEO Jeff Shell and former CNN head Jeff Zucker to run cable and broadcast networks for Paramount if his bid succeeds.
- Skydance is still conducting due diligence and has yet to submit a final offer.
Redstone is the majority shareholder of Paramount Global, which she controls through a holding company called National Amusements Inc. (NAI). Ellison and Skydance could take control of the entirety of Paramount Global by purchasing a majority stake in NAI, merging the production company responsible for producing “Top Gun: Maverick“— one of Paramount’s biggest hits in recent memory — with the studio itself.
The Financial Times reports that Ellison has lined up some top former media executives to help run Paramount if his bid is ultimately successful. Former NBCUniversal CEO Jeff Shell — who was fired by Comcast in April 2023 after a CNBC reporter filed a sexual harassment claim against him — would be in line to oversee CBS and Paramount’s cable networks like MTV and Paramount Network. Jeff Zucker, head of CNN until 2022 could also come into the picture to help run the CBS news unit.
Ellison’s representatives are still running due diligence on Paramount, a crucial step that allows them to take a deep dive into the company’s finances and see how healthy the business really is. Ellison and Skydance are backed by Redbird Capital, a private investment firm with the funding to carry out a purchase of Paramount.
Why is Skydance’s Deal More Appealing Than Apollo’s Offer?
On first glance, Apollo Global Management’s $11 billion bid for Paramount’s TV and movie studios would require serious consideration, at the very least. Given that the offer is for more than the entire stock value of Paramount currently, shareholders would clearly get some benefit from an acceptance of the offer.
However, Redstone is leaning more toward Ellison and Skydance because she wants to sell Paramount entirely, not piece by piece. Selling the TV and movie studios would leave Paramount with lower-performing cable channels, CBS, and its streaming business, headlined by Paramount+. That constitutes slim pickings for whoever wanted to come and collect those assets, especially if Paramount sold all its intellectual property along with the studios to Apollo.
“Accepting a studio-only offer would mean divorcing the rest of the company from one of the key engines that drives it,” MoffettNathanson analyst Robert Fishman told the Financial Times. “Remove one of its unique content creators from the equation and the rest of the company may appear hollow.”
No deal for Paramount is close to being finalized as of now, and all negotiations may fall apart. But as things stand, it appears that Paramount Global controlling shareholder Shari Redstone is leaning toward David Ellison’s offer to purchase her company in its entirety, rather than breaking it down into pieces and selling them off one by one.
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