The evening sky over Hollywood was tinged with the promise of change as Skydance Media and Paramount Global announced their groundbreaking merger. Paramount agrees to merge with Skydance in a union revealed late on a Sunday, marking a pivotal moment for one of the industry’s oldest studios, one of the industry’s oldest studios. Shari Redstone, the non-executive chair of Paramount, decided to sell the family’s controlling stake in a complex transaction that would seal this merger. This decision signified the end of an era for the Redstone family, whose patriarch, Sumner Redstone, had built a media empire from a modest chain of drive-in theaters, encompassing Paramount Pictures, CBS, and cable networks like Comedy Central, Nickelodeon, and MTV.
The merger promised to blend Paramount’s illustrious past, highlighted by classics such as “Chinatown,” “The Godfather,” and “Breakfast at Tiffany’s,” with Skydance, their financial collaborator on recent blockbusters like “Top Gun: Maverick,” “Mission: Impossible-Dead Reckoning,” and “Star Trek Into Darkness.” David Ellison, the 41-year-old tech visionary who founded Skydance, was poised to become Hollywood’s latest power player. However, he faced a formidable challenge ahead: steering a media company through the tumultuous waters of the streaming revolution.
Paramount had been struggling, shedding nearly $17 billion in value since late 2019 as its traditional TV business faltered faster than its streaming service, Paramount+, could generate profit. This instability had already claimed the job of CEO Bob Bakish in April, following his disputes with Shari Redstone over the Skydance deal. He was succeeded by a triumvirate of executives who had suggested drastic measures, including $500 million in cuts, asset sales, and exploring joint ventures for Paramount+. Yet, these plans—and the associated layoffs—were now uncertain in the wake of the merger.
Ellison was expected to bring along Jeff Shell, a seasoned media executive and former CEO of NBCUniversal, despite Shell’s controversial departure from NBCU due to an investigation into an inappropriate relationship. Since leaving NBCU, Shell had joined RedBird Capital as its chair of sports and media.
The Paramount-Skydance deal concluded months of fraught negotiations. Talks had initially collapsed on June 11, when Redstone halted discussions despite an agreement for Skydance and partners to acquire National Amusements, the Redstone family’s holding company with a 77% voting stake in Paramount. The deal stumbled over the demand for approval by non-Redstone shareholders, a stipulation Skydance rejected. During the hiatus, other bidders emerged, including producer Steven Paul, Seagram heir Edgar Bronfman (with Bain Capital), and IAC Chair Barry Diller.
Nevertheless, dialogue between Ellison and Redstone resumed quietly, gaining momentum. Skydance enhanced the offer to the Redstone family, promising $1.75 billion and fortified legal protections against shareholder lawsuits. This cleared the way for a new agreement. Additionally, Ellison and his financial backers, including RedBird Capital Partners, pledged to strengthen Paramount’s finances with a $1.5 billion injection and an offer to buy approximately 50% of Paramount’s nonvoting shares at $15 each. Class A voting stockholders would receive $23 per share.
The merger also allowed Paramount 45 days to seek better offers, hinting that the deal’s narrative could yet see another twist. For now, Hollywood awaited the dawn of this new chapter with bated breath.
The merger was revealed late on a Sunday.
Shari Redstone is the non-executive chair of Paramount. She decided to sell the family’s controlling stake in Paramount, sealing the merger.