Paramount Global sells Skydance Media for $8 billion

Paramount Global has sold Skydance Media for $8 billion, merging David Ellison’s company with a traditional Hollywood studio after acquiring National Amusements Inc., owned by majority shareholder Shari Redstone, the companies announced Sunday.

The two-part deal, which took months to negotiate, marks the end of the Redstone family’s ownership of the historic entertainment conglomerate, which owns not only Paramount Studios but also Paramount+, CBS, MTV, Nickelodeon and Pluto.

Shari Redstone said in a statement: “Given the changes in the industry, we want to strengthen Paramount for the future while ensuring that content remains king. We hope the Skydance transaction positions Paramount for continued success in this rapidly changing environment.”

The transaction, backed by RedBird Capital and the Ellison family, provides for a total of $8 billion in cash and stock, including $2.4 billion to NAI, $4.5 billion to non-NAI Paramount shareholders, and an additional $1.5 billion in new capital to retire debt and recapitalize the company’s balance sheet.

Transaction NameS Ellison as chairman and CEO, and former NBCUniversal CEO Jeff Shell as chairman. The transaction is expected to close in the first half of 2025.

The most important points of the offer are as follows:

• Skydance is valued at $4.75 billion; Skydance shareholders will receive 317 million Class B shares valued at $15 per share

• Upon closing of the transaction, Skydance Investor Group will own 100% of the New Paramount Class A shares and 69% of the Class B shares outstanding, representing approximately 70% of the pro forma shares outstanding.

• Paramount shareholders will receive a 48% premium to the price of the Class B shares on July 1, 2024 under this transaction. Class A shares will receive a 28% premium.

In a statement, Ellison said, “I am incredibly grateful to Shari Redstone and her family for giving us the opportunity to lead Paramount. We are committed to revitalizing the business and strengthening Paramount with contemporary technology, new leadership and creative discipline designed to enrich generations to come.”

Under the terms of the deal, Skydance will pay Redstone $1.75 billion to acquire National Amusements, which controls 77% of Paramount’s Class A voting shares. The deal also includes a 45-day “go-shop” provision that gives other bidders the opportunity to make a better offer. The deal will not be subject to a shareholder vote.

Others who have expressed interest in acquiring Paramount include IAC Chairman Barry Diller, “Baby Geniuses” producer Steven Paul, former Warner Music Group CEO and chairman Edgar Bronfman Jr, Sony Pictures Entertainment and Apollo Global Management — who made a $26 billion cash offer in May — and Allen Media Group founder Byron Allen, who made a $30 billion offer including debt. Warner Bros. Discovery CEO David Zaslav also met with former Paramount CEO Bob Bakish about a potential merger in December, though those talks were later put on hold.

The story continues

The deal ends a months-long saga that began in December, when Skydance began testing the media conglomerate’s portfolio. The two sides entered an exclusive 30-day negotiating window in April to conduct due diligence. Although that window expired without a deal, the two sides continued to negotiate.

Some of Paramount’s Class B shareholders objected to Skydance’s offer, which they believed favored Redstone over the rest of the company’s investors. In addition to investors threatening to sue, the Employees’ Retirement System of Rhode Island requested that a Delaware court order Paramount’s board and management to turn over various documents related to the merger talks with Skydance. To calm investor concerns, Skydance repeatedly changed its offer to make the deal more attractive to minority shareholders.

While both Skydance and National Amusements had agreed on the economic terms of the deal, there were unresolved issues they could not agree on — most notably giving all shareholders permission to vote on the sale and legal protections in the event of shareholder lawsuits, which prompted Redstone to break off talks last month.

But in a surprising move, a person familiar with the matter told TheWrap on Tuesday that the two sides had reached a tentative agreement, which was forwarded to an independent special committee of the Paramount board evaluating the offers. Four board members — including three who were on that committee — resigned from their roles at Paramount’s annual meeting in June. On Sunday, an independent special committee of Paramount’s board of directors unanimously approved the latest deal.

The deal comes as Paramount is now under new co-CEOs Brian Robbins, George Cheeks and Chris McCarthy, who replaced Bakish in April. Last month, the trio unveiled a long-term strategy aimed at reducing $14.6 billion in long-term debt, accelerating streaming profitability, returning to investment-grade credit metrics after being downgraded to junk status, and boosting revenue and profit. That plan includes streaming partnerships, divesting assets and $500 million in cost cuts in areas that include legal and corporate marketing.

During a meeting with employees last week, executives said they had hired bankers to help sell the assets. Earlier Tuesday of last week, Paramount shares rose on Bloomberg’s report that the group, including BET CEO Scott Mills and CC Capital founder and senior managing director Chinh Chu, was considering offering up to $1.7 billion to acquire BET. Other possible assets up for auction could include Pluto TV and the iconic Paramount lot, which would be leased back for the studio’s use, four people familiar with the matter previously told TheWrap.

Robbins, McCarthy and Cheeks are also in talks with potential partners in international markets that would “significantly change the scale and economics” of their streaming business, which is currently on track to reach domestic profitability in 2025. The CEO’s office has said they could join forces with other streaming services or technology platforms in a joint venture or long-term partnership. CNBC reported Monday that Warner Bros. Discovery is interested in a potential Max-Paramount+ merger.

In 1987, Shari’s father, Sumner Redstone, acquired Paramount’s predecessor, Viacom, for $3.4 billion. Viacom won a bidding war for Paramount Communications for about $10 billion in 1994 and acquired CBS Corp. for $35 billion in 1999.

In 2005, Sumner announced that Viacom and CBS would be split into two separate entities. However, that move was short-lived, as Shari — who took over National Amusements after Sumner left in 2016 — merged the companies in 2019 to create ViacomCBS, later renamed Paramount Global.

Paramount, which reported a market capitalization of $8.23 billion at the close of trading on Friday, has seen its stock price fall 19% over the past six months, 27% over the past year and 77% over the past five years. Paramount and Skydance will hold a conference call with investors to discuss the deal at 8:30 a.m. ET on Monday.

The article Done Deal: Paramount Global Sells Skydance Media in $8 Billion Takeover first appeared on TheWrap.