Skydance Makes Offer to Purchase All of Paramount, Take Company Private; What Would That Mean for Audiences?
New reports indicate that Skydance Media would fully merge itself with Paramount Global if it acquired the company.
Merger and acquisition talks surrounding Paramount aren’t dying down. The latest company to come calling about potentially acquiring National Amusements — the holding company owned by Shari Redstone that controls 77% of Paramount Global’s voting stock — is Skydance Media, and new reports are providing additional details about what its takeover of Paramount would look like. It now appears that Skydance has not only made an initial offer to purchase Paramount but that the deal is contingent on being able to merge the two companies into a private entity.
- Skydance would acquire all of Paramount Global, merge with it, and take the company private if an acquisition took place.
- A deal is not imminent, as talks are still in the early stages and may come to nothing in the end.
- Taking Paramount private might have big consequences for the company’s theatrical movie releases, streaming cuts, and more.
What’s the Latest on Paramount’s Merger Talks?
Skydance Media is continuing to inch closer to a Paramount acquisition. The two sides are in active discussion, though CNBC reports the due diligence stage of the transaction has not yet started. That means that there’s still plenty of time for the deal to fall apart, as something in the financial data might make a deal untenable.
If the deal does go through, Skydance would acquire Paramount Global and all its assets, and then merge with the company. CNBC also reports that the structure for the deal would likely involve Skydance taking Paramount from a publicly traded company to a private one. Skydance still needs additional capital to acquire Paramount but has not reached out to any outside investors as of yet.
Warner Bros. Discovery had shown interest in a Paramount acquisition in December, but Wall Street looked askance at that potential deal, not only because of potential anti-trust issues, but also because WBD is still trying to climb out of the multi-billion dollar debt from the merger of WarnerMedia and Discovery in 2022.
What Would Taking Paramount Private Mean?
Skydance taking Paramount private means that Paramount’s shares would no longer be available on publicly traded stock markets. This would insulate it from taking stock losses if it made decisions that seemed to run counter to prevailing wisdom.
For instance, Skydance’s position as a movie studio could inspire it to play around with the theatrical and streaming release formula at Paramount. It may decide to lengthen theatrical windows for movies, delaying their arrival on Paramount+. Skydance has been behind “Top Gun: Maverick” and “Mission: Impossible - Dead Reckoning” which arrived on Paramount+ 200 and 197 days after premiering in theaters. However, Paramount’s current approach for non-Skydance-produced films is to bring them to the platform in approximately 45 days.
Perhaps Skydance would attempt to get out of Paramount’s current output deal with Amazon and MGM by which Paramount has to pay Amazon to stream its own movies on Paramount+ before going to the MGM+ streaming service and premium cable channel.
If Skydance decides to try and make Paramount’s streaming arm profitable as quickly as possible, it could lead to deeper content cuts than Paramount+ saw during last summer. It could also lead to rapid price increases for the service since that’s the fastest way to raise the average revenue a provider makes per user. Of course, it could go the other way. Without the threat of Wall Street repercussions, Skydance could decide to keep prices flat and invest in content in order to grow Paramount+’s subscriber base. Currently at a moderately healthy 63 million, there is still a large, untapped audience for the service to explore.
Taking Paramount private would also allow Skydance to do whatever it wanted with the company’s cable and broadcast channels without fearing a cratering stock price. It’s hard to predict what would happen to those channels under Skydance’s supervision, as much of it depends on the philosophy of Skydance chief David Ellison and how he feels about linear TV’s future. They could be sold individually or collectively — perhaps to WBD — in an effort to focus on the studio side of the business.
Pulling Paramount’s shares from public markets would allow Skydance to re-mold the company in whatever image it desires while still having the benefits of an incredibly deep IP library. There’s a long way to go before any acquisition actually happens, but if it does, it would raise myriad questions about the future of one of the country’s most revered legacy media companies.
Paramount Plus
Paramount+ is a subscription video streaming service that includes on-demand access to 40,000+ TV show episodes from BET, CBS, Comedy Central, MTV, Nickelodeon, Nick Jr. and more. The lineup includes “1883,” “Tulsa King,” “Star Trek: Discovery,” Nickelodeon’s “SpongeBob SquarePants,” and “PAW Patrol.” Subscribers can watch the NFL, college football, The Masters, college basketball, UEFA Champions League, UEFA Europa, Serie A, and NWSL. The service also offers the option to watch your live CBS affiliate. The upgraded ad-free package includes premium movies and shows from Showtime.