Paramount Studios Merges with Skydance in Major Shift for Hollywood
A New Paramount
In a move that marks a significant shift for the entertainment industry, Paramount Global has agreed to merge with Skydance, a production company known for its work on films like "Top Gun: Maverick." The deal, which values Skydance at $4.75 billion, will see the Redstone family step away from control of Paramount, a storied movie studio and media company.
The Merger Details
The merger was signed off on by Paramount’s special committee on Sunday, after a monthslong negotiation. The deal will see the buying consortium, which includes private equity firms RedBird Capital Partners and KKR, invest more than $8 billion into Paramount and acquire National Amusements, the controlling shareholder of Paramount. The deal gives National Amusements an enterprise value of $2.4 billion, which includes $1.75 billion in equity.
Paramount’s class A shareholders will receive $23 apiece in cash or stock, while class B stockholders will receive $15 per share, equating to a cash consideration totaling $4.5 billion available to public shareholders. As part of the deal, Skydance will also inject $1.5 billion of capital into Paramount’s balance sheet.
The New Leadership
Skydance founder David Ellison will lead the combined company as CEO, while Jeff Shell, former CEO of NBCUniversal, will serve as president. The merger is subject to regulatory approval and is expected to close in the third quarter of 2025.
A Shift in Ownership
The Redstone family has long controlled Paramount, as well as the CBS broadcast network and cable TV networks including MTV and Nickelodeon. The family’s control of the company dates back to the 1980s, when Sumner Redstone first took the reins. Now, Ellison, 41, son of Oracle founder and billionaire Larry Ellison, will be at the helm of a major movie studio and among Hollywood’s elite.
The Future of Paramount
Paramount’s business has been on a rollercoaster, particularly in the last year, as the legacy media giant faced a weak advertising market and the continued loss of cable TV customers. Its flagship streaming platform, Paramount+, is yet to reach profitability. However, the company’s new leadership is optimistic about its future, highlighting the success of CBS and the company’s partnership with the National Football League.
"We think it’s going to be a new day for these combined assets," said Shell on a call with investors. "It’s a new Paramount; it’s not just a catchphrase. We think it’s going to be a new day for these combined assets."
Conclusion
The merger between Paramount and Skydance marks a significant shift for the entertainment industry, as the Redstone family steps away from control of the storied movie studio and media company. The deal is expected to close in the third quarter of 2025 and will see the buying consortium invest more than $8 billion into Paramount and acquire National Amusements.
FAQs
Q: What is the significance of the merger?
A: The merger marks a significant shift for the entertainment industry, as the Redstone family steps away from control of Paramount, a storied movie studio and media company.
Q: Who will lead the combined company?
A: Skydance founder David Ellison will lead the combined company as CEO, while Jeff Shell, former CEO of NBCUniversal, will serve as president.
Q: What is the deal worth?
A: The deal values Skydance at $4.75 billion and gives National Amusements an enterprise value of $2.4 billion, which includes $1.75 billion in equity.
Q: When is the merger expected to close?
A: The merger is expected to close in the third quarter of 2025, subject to regulatory approval.
Q: What is the future of Paramount?
A: Paramount’s new leadership is optimistic about its future, highlighting the success of CBS and the company’s partnership with the National Football League. The company is expected to focus on its streaming platform, Paramount+, and extracting as much value as possible from the declining traditional TV business.
Author: www.cnbc.com
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