Ownership Stunner: Skydance, Paramount Agree to Preliminary Merger Deal Terms After Talks Resume
The will they, won’t they saga of Paramount and Skydance has taken yet another twist this week, but will it be the last?
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David Ellison may be about to find out that persistence pays off. The CEO of Skydance Media has been chasing a deal to acquire Paramount Global and merge it with his own studio for months in a twist-filled saga that has had stops and starts aplenty. According to The Wall Street Journal, proceedings have started up again; in fact, Skydance has reportedly reached a preliminary agreement with Shari Redstone to buy National Amusements Inc., the holding company that controls 77% of Paramount’s voting stock.
Key Details:
- Ellison would pay $1.75 billion for National Amusements, and provide greater protection against potential shareholder lawsuits.
- Redstone called off deal talks with Skydance just before the deal was set to be voted on by Paramount’s board in June.
- A deal could create an opportunity for Ellison to pursue streaming deals that would see Paramount+ content split between multiple services.
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Under the latest deal terms, Ellison will pay $1.75 billion to get control of Paramount’s voting stock through NAI. Then, he’ll merge Skydance and Paramount together, creating something of a mega-studio. It’s not yet clear what will become of Paramount’s broadcast and cable TV channel assets like CBS, MTV, and Nickelodeon, but Paramount is expected to take advantage of a 45-day “go shop” period to make sure that none of its other potential suitors can improve on the Skydance deal terms.
The agreement will now go to the special board established by Paramount for considering merger and acquisition opportunities. There are two important revisions to Skydance’s offer that helped it gain the approval of Redstone this time around: first, the ascent of a majority of non-Redstone shareholders won’t be necessary. Second, it provides greater protections for NAI and Redstone if other company investors decide to sue.
One prominent mogul representing a large swath of Paramount shareholders has already threatened legal action if a deal that favors Redstone’s shares over others is forced through. Still, it’s the most promising development in the Paramount sale drama since June, when talks between the two sides died, seemingly for good. At that time a deal looked imminent, but Redstone called off talks at the last moment after not getting the extra provisions she wanted inserted into the pact. Talks restarted soon after in private, according to the WSJ.
What Are Paramount’s Next Steps?
![Paramount+ could be split into multiple streamers under Skydance's supervision.](https://thestreamable.com/media/pages/news/ownership-stunner-skydance-paramount-agree-to-preliminary-merger-deal-terms-after-talks-resume/b8314d8e50-1720014077/paramount-plus-screenshot-768x432.jpg)
If Paramount’s board approves the deal and no legal challenges sufficient to stop it crop up, Skydance and Paramount will merge. The two studios already have a track record of working closely together, having collaborated on blockbuster movies like “Top Gun: Maverick” and “Mission: Impossible - Dead Reckoning.”
A deal between Paramount and Skydance could have massive consequences for Paramount’s streaming business, which is still a money-loser, but which has been narrowing its yearly losses. As reported earlier this week, Skydance had plans to seek out merger opportunities for Paramount+ with other streaming services, then split up its streaming content among newly-created platforms based on themes. SHOWTIME’s prestige TV content could be placed on a new service with prestige shows from another streamer for example, while Paramount’s sports rights would be housed on another new service with its partner’s sporting events.
As bad of an idea as diluting Paramount’s inventor might seem, only time will tell if Skydance will actually try to carry out the scheme. That, in turn, depends on whether the deal is finalized or not. If talks fall through again, other suitors such as IAC's Barry Diller, media executive Edgar Bronfman Jr. and filmmaker Steven Paul have expressed some level of interest in acquiring Paramount. The company’s operations are currently being run by the “Office of the CEO,” comprised of three division heads. Earlier this week, it was reported that Paramount was once again considering selling the BET cable channel, and a deal could be close at hand.
The ball now bounces into the court of Paramount’s board, which must now consider whether to approve or reject the Skydance deal. There could be plenty more twists ahead in the story, though this is the surest sign yet that Paramount’s future is about to be decided.
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