Paramount and Skydance announce agreement

(Left) Paramount Pictures logo. Photo: Paramount. (Right) Skydance logo. Photo: Skydance.

Advance:

  • After months of negotiations, Paramount Global and Skydance Media will merge.
  • Skydance boss David Ellison will become CEO of Paramount.
  • Other companies had sought to close their own deal for the studio.

It’s been months of feeling like Supreme Global was a Tinder user swiping left on potential suitors while being courted by various groups for mergers and acquisitions.

Now, it appears to have finally found the right partner, as after rejecting an offer from the company, a special committee of Paramount’s board of directors – and now the full board – has approved an $8 billion acquisition of Skydance Media.

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What has happened so far with the agreement?

Simon Pegg as Benji Dunn, Rebecca Ferguson as Ilsa Faust, Tom Cruise as Ethan Hunt and Ving Rhames as Luther Stickell in 'Mission: Impossible - Fallout', from Paramount Pictures and Skydance.

(L-R) Simon Pegg as Benji Dunn, Rebecca Ferguson as Ilsa Faust, Tom Cruise as Ethan Hunt and Ving Rhames as Luther Stickell in ‘Mission: Impossible – Fallout’ from Paramount Pictures and Skydance. ©2021 Paramount Pictures. All rights reserved.

Like many large traditional media companies, Paramount has found itself struggling with debt and declining profits, especially when it comes to its streaming service.

Naturally, it has been the subject of interest from other major companies; at one point, there was talk of a possible merger with Warner Bros. or Universal.

But among those most eager to take control are David EllisonSkydance Media, which already has connections with the studio, having co-produced titles such as ‘Mission Impossible‘ movies and the ‘Star Trek‘ film franchise.

Ellison, working with investment partners, had previously made a proposal to buy a majority stake in National Amusements Inc., the Shari Redstone-owned entity that holds a majority stake in Paramount Global. The proposal was rejected (partly because of concerns from other shareholders), but a new version has been accepted.

The current plan is for Skydance to take control of Paramount and for the companies to merge, which has largely been seen as a positive as it means much of the studio remains intact.

Here is Shari Redstone’s statement on the deal:

“In 1987, my father, Sumner Redstone, acquired Viacom and began creating and growing the companies we know today as Paramount Global. He had a vision that ‘content was king’ and was always committed to delivering great content to all audiences around the world. That vision has remained at the heart of Paramount’s success and our accomplishments are a direct result of the incredibly talented, creative and dedicated people who work at the company. Given the changes in the industry, we want to strengthen Paramount for the future while ensuring that content remains king. Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment. As a long-time production partner of Paramount, Skydance knows Paramount well and has a clear strategic vision and the resources to take it to its next stage of growth. We believe in Paramount and always will.”

The company is currently run by three CEOs, but if (increasingly) Skydance takes over, David Ellison would become the new CEO.

Paramount has 45 days to consider other offers before formally agreeing to this deal, and Skydance would receive a $400 million payout if it took a different path.

Who else has shown interest in Paramount?

Sony Pictures logo.

Sony Pictures logo. Photo: Sony Pictures.

Skydance is far from the only company that has shown interest, with people like Barry Diller (former president of the company), the rival studio Sony and investment company Apollo have considered bidding for Paramount.

When will the deal finally be sealed?

Assuming no other issues arise (since regulators have yet to evaluate the current deal) and Paramount doesn’t somehow decide to go another route, the deal should officially close in mid-2025.

'Transformers One'.

‘Transformers One’. Photo: Paramount Pictures.

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