Skydance Media and Paramount Global have signed a definitive agreement that they say will advance Paramount as a world-class media and technology enterprise. It aims to build on the hundred-year legacy of the Paramount movie studio and the CBS television business that includes brands like MTV and Nickelodeon. The Ellison family and RedBird Capital Partners will invest $8 billion to gain 70% ownership of the new company that will have an enterprise value of around $28 billion.
The transaction will be a two-stage process, with the acquisition of National Amusements for $2.4 billion, and a subsequent merger of Skydance and Paramount Global involving a $6 billion cash injection.
Although the agreement is definitive, it includes a 45-day “go-shop” period during which Paramount will be able to solicit and evaluate alternative acquisition proposals.
Under the proposed agreement, David Ellison, the founder of Skydance, known for recent hits like Top Gun: Maverick and Mission Impossible: Dead Reckoning, will become the chairman and chief executive officer.
Jeff Shell, the former chief executive of NBC Universal and the chairman of sports and media at Redbird Capital, will become President.
David Ellison, son of Larry Ellison, the multibillionaire founder of the software company Oracle, said: “This is a defining and transformative time for our industry and the storytellers, content creators and financial stakeholders who are invested in the Paramount legacy and the longevity of the entertainment economy.
The Paramount content platform will be enhanced and powered by new technology, focused on delivering content through the wholly owned direct-to-consumer platforms of Paramount+ and Pluto while enhancing CBS and Paramount’s linear networks.
Paramount Global has been majority owned by National Amusements, which also owns movie theatres in the United States, United Kingdom and Latin America.
Shari Redstone, who heads National Amusements, Inc. and is the chair of Paramount Global, said: “In 1987, my father, Sumner Redstone, acquired Viacom and began assembling and growing the businesses today known as Paramount Global. He had a vision that “content was king” and was always committed to delivering great content for all audiences around the world.”
“Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king,” she said. “Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment. As a longtime production partner to 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 we always will.”
The new company will also have a new logo, that drops the cursive font for Paramount and replaces it with the word in the all caps serif style of the Skydance wordmark.
Under the plan to transform the new Paramount into a world-class media and technology enterprise, there is an aim to unify cloud providers for all distribution services, like Paramount+ and Pluto.
Jeff Shell told analysts the company would be evaluating all options to be a winner in direct-to-consumer and that “really means being in the ultimate bundle that’s coming”. He said they had had a number of approaches about partnerships with another player or players that they would evaluate.
“I don’t think it takes rocket science to project that the consumer situation is not sustainable, that eventually there’s going to have to be some form of a bundled solution that’s easy and simple for somebody. When people get home from work after work and a hard day, they want to watch something. They don’t want to have to spend 30 minutes trying to figure out where to get what they get.”
“I personally think eventually the streaming world is going to look very similar to the way that the multi-channal world looked in the past,” he said. “They’re going to want a one-stop shop with a nice EPG and a nice technological way to find what they want to look for so they can start watching something, as opposed to sorting their way through the muck of the way it’s delivered right now.”
“If you’re in that bundle, you’re going to win, and if you’re not in that bundle, you’re in real trouble.”