It’s Official: Skydance Wins the Battle for Paramount Global

In a landmark deal that will shake up the entertainment landscape, Shari Redstone has agreed to sell control of Paramount Global to a consortium led by Skydance, the production company led by David Ellison, and Gerry Cardinale’s RedBird Capital.

The sale, assuming it is approved by regulators and completed (and assuming a better bid does not emerge), would see Skydance acquire Redstone’s majority stake in National Amusements, which in turn would secure control of Paramount, the owner of the Paramount film and TV studios, Paramount+, CBS, and cable channels like Nickelodeon, MTV and Comedy Central.

The consummation of the deal is the culmination of months of “will they or won’t they” speculation, with the Skydance consortium beginning talks late last year, only to see multiple rounds of negotiations fall apart when Redstone rejected the deal in place at the 11th hour last month.

The two sides, however, continued talking, leading to a new deal that secured Redstone’s approval.

Once the deal closes, the plan is for Paramount to acquire Skydance, which in turn will install its own leadership team at the stories entertainment company. Ellison will be CEO, with former NBCUniversal CEO Jeff Shell (currently working at RedBird) set to run the company day-to-day as its president.

Skydance had to sweeten its deal offer in hopes of ensuring more value for non-voting Paramount shareholders who had complained that initial deal offers had guaranteed Redstone a premium but would have diluted them, giving them the short end of the stick.

According to the companies, the SKydance consortium will “invest $2.4 billion to acquire National Amusements for cash and $4.5 billion for the stock/cash merger consideration to be paid for publicly traded Class A shares and Class B shares, as well as $1.5 billion of primary capital to be added to Paramount’s balance sheet”

The deal not only buys out Redstone’s stake, but also allows pother Class A and Class B shareholders to cash out as well at $23 per share and $15 per share, respectively. Skydance says when it is all said and done, it expects to own 70% of shares outstanding.

The all-stock deal to merge Skydance into Paramount will value Ellison’s studio ay $4.75 billion.

National Amusements is a regional movie theater chain; however, Sumner Redstone turned it into a media behemoth by acquiring Viacom, Paramount and CBS. National Amusements owns only about 10 percent of Paramount’s equity, but it controls about 80 percent of its voting stock, giving it control of the entertainment firm.

Shari Redstone has run the company since her father’s death in 2020.

“In 1987, my father, Sumner Redstone, acquired Viacom and began assembling and growing the businesses today known as Paramount Global,” Redstone said in a statement Sunday night. “He had a vision that ‘content was king’ and was always committed to delivering great content for all audiences around the world. That vision has remained at the core of Paramount’s success and our accomplishments are a direct result of the incredibly talented, creative, and dedicated individuals who work at the company.

“Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king,” she continued. “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.”

“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,” Ellison added. “I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount. We are committed to energizing the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come.”

“The recapitalization of Paramount and combination with Skydance under David Ellison’s leadership will be an important moment in the entertainment industry at a time when incumbent media companies are increasingly challenged by technological disintermediation,” added Cardinale. “As one of the iconic media brands and libraries in Hollywood, Paramount has the intellectual property foundation to ensure longevity through this evolution — but it will require a new generation of visionary leadership together with experienced operational management to navigate this next phase. RedBird is making a substantial financial investment in partnership with the Ellison family because we believe that the pro forma company under this leadership team will be the pace car for how these incumbent legacy media businesses will need to be run in the future.”

By acquiring a majority of National Amusements, Skydance will be able to control Paramount, including the prestigious studios (and all their associated intellectual property), the broadcast network, streaming service, and cable channels.

Paramount’s future has been the focus of intense speculation in recent months, with its streaming business still hemorrhaging cash, its linear TV business in continued decline, and with its credit rating on the ropes.

In addition to Skydance, Apollo and Sony have kicked the tires of the company, which ousted its CEO Bob Bakish in April, replacing him with a trio of executives in the “office of the CEO.”

National Amusements, too, has faced challenges. The company took a $125 million strategic investment in May from BDT & MSD Partners, with the proceeds paying down debt and paying back loans.

S&P Global downgraded Paramount’s debt to BB+ in March, which is considered “junk” status. “We downgraded Paramount due to the degradation of credit metrics from the accelerating declines in linear media and the shift toward a more competitive and less certain streaming model,” S&P’s Naveen Sarma wrote.

He added in a note after Bakish departed that the “shared management structure is not sustainable for Paramount Global, or for any publicly traded company, outside of a short transitional period.”

However, the co-CEOs — Brian Robbins, George Cheeks and Chris McCarthy — had released their own plan for the company, and told staff last month that they were already executing on it.

“The Special Committee would like to thank our co-CEOs, George Cheeks, Chris McCarthy and Brian Robbins, for making significant progress on optimizing company operations in a short period of time, positioning Paramount for a sustainable transformation and a path to profitable growth going forward,” said Paramount board member and special committee chair Charles Phillips.

With Skydance set to take control and install new leadership and a new strategy at Paramount, all of Hollywood and Wall Street will be watching.

Read Shari Redstone’s memo to staff below.

Good evening. Just moments ago, it was announced that we have entered into an agreement under which Skydance Media will acquire National Amusements and merge Skydance’s business with Paramount Global. I wanted to take this opportunity to reach out to you directly not only to share the news, but to express my tremendous gratitude to each and every one of you for what we have been able to accomplish together for the past several decades. 

As you know, my father built Viacom and CBS by bringing together a group of the best assets in media, news, and entertainment. While people often debated whether content or distribution ruled the day, my father was governed in all of his decisions by his belief that content was indeed king. That has never been more important than it is today, when in a cluttered marketplace, we continue to create content that resonates with our consumers, that they continually seek out, and that keeps them wanting more. Our success is because of you, what you have done individually, and even more importantly, as a team.  

Seeing the way you have come together since we launched Paramount Global has been one of the highlights of my years at this company, and your accomplishments are evident across the business. Paramount+ is among the fastest-growing streaming services with an exceptional range of content appealing to all demographics. CBS has been the #1 broadcast network for 16 years and running, with clear strength across genres. Paramount Pictures has produced eight #1 movies in the past two years alone and continues to create hit after hit. Our linear networks have delivered culture-shaping content that excites audiences, including the launch of the “Taylor Sheridan universe” with Yellowstone on the Paramount Network. And, Pluto TV is today the most widely distributed FAST service.   

As all this was accomplished, we remained dedicated to educating and informing ourselves and our audiences in our efforts to fight hate and discrimination, and supporting other important causes in the US and around the world. I am so grateful to all of you for what we have been able to accomplish to make a difference.  

Our family has always been committed to continuing my Dad’s legacy and ensuring Paramount’s enduring success. Consistent with that, as the pace of change in the industry has continued to accelerate, it has been our responsibility to work with leadership to make changes in order to maintain our competitive position and fuel growth, thinking of both the near and longer term. Most recently, this led to the appointment of George Cheeks, Chris McCarthy, and Brian Robbins as Co-CEOs, to take the meaningful actions necessary to bolster the Company both operationally and financially. I think we can all agree on their enormous contributions to this company. At the same time, as you know, our Board has focused on ensuring we are pursuing all opportunities to best position the Company for the future and maximize value creation for all shareholders.  

As a longtime production partner to Paramount, Skydance is well aware of what we have accomplished over the years and it is for that reason that they have pursued a combination with Paramount. They have a clear strategic vision for the future and the resources to build on Paramount Global’s competitive advantages to drive the Company’s success.  

The agreement we entered into today is subject to closing conditions, and we expect the deal to be completed in the first half of 2025. Until then, George, Chris, and Brian will continue to lead the Company, and they will be sharing more with you shortly. I of course will also be here to cheer you on, and assist in any way that I can. It has truly been my honor to work with all of you these past several years, and to see so many of our dreams come to fruition. 

I want to express my deepest thanks to you for your commitment, hard work, and most importantly your support of my family and me. Against a challenging industry backdrop and many changes at the company, you have protected Paramount’s assets and delivered for our audiences. As I have said before, and I will always say, we have the best people in the business here at Paramount and it is truly a privilege to work with you. I will always treasure the relationships I have had with you and the ways we have worked together to distinguish ourselves in our industry.   

All the best, Shari  

Read the memo from Cheeks, McCarthy and Robbins below.

Hi Everyone,  

Today marks an important milestone for Paramount, as we just announced a definitive agreement with Skydance Media. By combining Skydance with Paramount, we would build on our storied legacy to create an even stronger, next-generation media and technology leader, positioned to win in today’s rapidly transforming media landscape.  

As Shari shared, we expect this transaction to close in the first half of 2025, since it’s subject to regulatory approvals and other steps necessary to complete the deal. The agreement also includes what’s called a “go-shop” provision, which means that the Special Committee of Paramount’s Board of Directors and its representatives will be permitted to actively solicit and evaluate alternative acquisition proposals for a 45-day period.  

Until the transaction closes, it’s business as usual – we will continue to operate as an independent company and move forward with the strategic plan we outlined at our town hall. This includes actions to modernize our organization by streamlining teams, eliminating duplicative functions and reducing the size of our workforce. We will also continue to explore opportunities to transform global streaming and optimize our asset mix by divesting some of our assets.  

We have been on a journey to transform Paramount for the future, and thanks to your hard work, Paramount brings tremendous value to this combination with Skydance. Paramount continues to be the home of invaluable IP that powers the best that entertainment has to offer to audiences around the world, and a vibrant creative culture. And, our assets are among the most compelling in the industry, including the number one US broadcast network with CBS and our leading free-to-air networks in the UK, Australia, Argentina, and Chile; iconic brands like Nickelodeon, MTV, BET, and Showtime; a top five SVOD service in the US with Paramount+; and a leading global free ad-supported streaming service in Pluto TV. And of course, Paramount Pictures continues to create genre-spanning films that deliver at the box office, most recently with A Quiet Place: Day One – the latest addition to our 100-year-old film library.   

This transaction would combine Skydance’s financial resources, deep operating experience, and cutting-edge technology with Paramount’s iconic IP, deep film and television library, proven hit-making capabilities, and linear and streaming platforms that reach millions of viewers. And, we already know Paramount and Skydance, led by David Ellison, can achieve incredible results together, as evidenced by our strong, 15-year collaboration that has delivered highly successful films and franchises like Top Gun: Maverick and Mission: Impossible – Fallout.   

The Paramount that we know today would not be possible without the leadership of Shari and the Redstone family. It is because of their vision and support over the many years that we are one of the leading global entertainment companies in the world, with the best team in the business. We would like to sincerely thank Shari and her entire family for their unwavering support and leadership. We would also like to thank our Board of Directors, who have helped guide us along the way. We appreciate all that they do on behalf of Paramount.  

And most importantly, we want to thank all of you, our Paramount Global team, for all you have done and continue to do to drive Paramount to new heights.   

We know you will have questions and we’ll share as much information as we can throughout this process. In the meantime, you can read more about the agreement in the press release here. 

Thank you,  

George, Chris and Brian