Paramount and Skydance agree to merge

NEW YORK: Skydance Media and Paramount Global agreed to merge, the companies announced on Sunday, opening a new chapter for one of Hollywood’s oldest studios.

Shari Redstone, Paramount’s non-executive chairperson, will sell the family’s controlling stake in the company in a complex transaction that will culminate in a merger.

The deal represents the end of an era for the Redstone, whose late patriarch, Sumner Redstone, transformed the family’s chain of drive-in movie theaters into a media empire that included Paramount Pictures, the CBS broadcast network and cable television networks Comedy Central, Nickelodeon and MTV.

The merger would combine Paramount, home of such classic films as Chinatown, The Godfather and Breakfast at Tiffany’s, with its financial partner on several major recent films, including Top Gun: Maverick, Mission: Impossible-Dead Reckoning and Star Trek Into Darkness.

The deal would elevate David Ellison, the 41-year-old tech scion who founded Skydance, as Hollywood’s newest power broker.

He stands to inherit a company that has a mountain of challenges, as it navigates an entertainment business upended by the streaming video revolution.

Paramount has shed nearly US$17bil in value since late 2019, as its traditional television business has eroded faster than its Paramount+ streaming service could turn a profit.

There has been tension in the executive suites. Its chief executive office (CEO), Bob Bakish, was ousted in April after clashing with the company’s controlling shareholder, Shari Redstone, over the Skydance deal.

He was replaced by a trio of executives who occupy the “office of the CEO,” a group that has proposed making US$500mil in cuts, selling off certain assets and exploring a possible joint venture partner for Paramount+.

These plans, which would mean more layoffs at a company that has already undergone a wave of job cuts, may now be in question.

Ellison will likely be joined at Paramount by veteran media executive Jeff Shell, former chief executive of NBCUniversal, once the deal closes, according to two people familiar with the discussions.

Shell left NBCU last year after an investigation into an inappropriate relationship and subsequently joined RedBird as its chairman of sports and media.

The Paramount-Skydance deal came about after months of talks that appeared to have been derailed when Redstone abruptly called off negotiations on June 11.

At that time, Skydance and its partners had reached an agreement to acquire the Redstone family’s holding company, National Amusements, which owns 77% of the voting shares of Paramount.

However, talks reached an impasse over other issues, including National Amusements’ request that the deal be approved by a majority of non-Redstone shareholders, a condition Skydance considered a non-starter. — Reuters