Shari Redstone has assented to offload Paramount, the Hollywood collective founded by her forefather in 1936, to autonomous cinema studio Skydance. This brings an end to the Redstone family’s affiliation with the company and concludes an unstable eight-month period of negotiations with prospective buyers including Apollo, a private equity consortium, and Sony. Redstone’s surprising approval for the transaction follows closely on the heels of her preventing a negotiation with Skydance, managed by tycoon David Ellison who has backing from a number of American private equity companies including RedBird.
The swap in control is anticipated to wrap up in the first six months of 2025 and would see renowned film archive, which includes such titles as The Godfather, Titanic, Chinatown and Raiders of the Lost Ark, move from Redstone family’s possession to Ellison’s entity. Ellison’s father, Larry Ellison, a co-originator of Oracle, ranks among the wealthiest individuals globally.
In light of shifts in the sector, Redstone aims to solidify Paramount’s standing for the future and maintain content as the primary focus. The goal is to allow Paramount to continue thriving amidst industry evolution via the agreement with Skydance.
Within the conditions of the contract, Skydance is set to put forward approximately $8 billion to acquire control of Paramount. First, $2.4 billion will be paid out to acquire National Amusements, having nearly 80 percent of Paramount’s vote-casting shares. Following this, a fusion with Paramount will be initiated by Skydance. Regular shareholders in Paramount will be given $15 per share, while those owning A shares will see $23 per share.
Skydance, an independent studio established by Mr Ellison, aged 41, in 2010, has been at the helm of successful films such as Top Gun: Maverick, Star Trek Into Darkness and Jack Reacher: Never Go Back.
Despite the months-long negotiation process, a shared understanding was achieved between Ellison and Redstone early on, even though their relationship with their demanding fathers – Sumner Redstone once declared his daughter would never spearhead his organisation – and a shared affinity for the Paramount studio located on Melrose Avenue in Hollywood.
Mr Ellison has expressed profound gratitude towards Shari Redstone and her family for the confidence they have placed in him to take helm at Paramount as the chief executive and chairman. Shari Redstone assumed control of the firm following her father’s passing in 2020. She had advocated for taking on Netflix and other streaming platforms through the introduction of Paramount+, which has since incurred substantial losses.
Dealing with the ongoing losses of Paramount+ will be a top priority for the ex-CEO of NBC, Jeff Shell, who is set to become president of the newly jointly operated company. Previously, significant losses prompted Bob Bakish, then CEO, to cut the company’s dividends, shaking investor confidence and impacting Ms Redstone’s personal finances. Consequently, she began considering her strategic alternatives.
During a tumultuous, very public process that saw a number of competitive bids and led to the departure of Mr Bakish and four board members due to conflicts with Ms Redstone, an agreement was reached that gives Paramount’s advisors a 45-day window to consider rival offers for the company.
Since the prior deal with Skydance collapsed, new potential bidders have appeared on the scene. They include media tycoon Barry Diller and media executive Edgar Bronfman jnr, who is the Seagram business’ successor. A $26 billion offer to purchase Paramount was also proposed by US-based private equity firm Apollo in conjunction with Sony.
Gerry Cardinale, founder of RedBird and a key ally of Ellison in the transaction, stated that the financial reorganisation of Paramount and its merger with Skydance under David Ellison’s stewardship is occurring during a critical period in the entertainment sector, as established media corporations are increasingly threatened by technological disintermediation.