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This is a landmark deal that will shake up the entertainment industry. Sally Redstone Agreed to sell control Paramount Worldwide Leading consortium Dance in the airthe production company led by David Ellison, and Gerry Cardinale’s RedBird Capital, the firm behind RedBird IMI, led by Jeff Zucker.
Assuming the sale is approved by regulators and completed (and assuming no better offer emerges), Skydance will acquire Redstone’s majority stake in National Amusements, which will gain control of Paramount, the owner of Paramount Pictures Studios, Paramount+, CBS and cable channels like Nickelodeon, MTV and Comedy Central.
The deal is the culmination of months of “will they or won’t they” speculation, with the Skydance consortium beginning talks late last year but falling short due to Redstone’s decision to withdraw its funding. Rejected the deal It arrived at the last minute last month.
However, the two sides continued to negotiate and reached a new agreement that was approved by Redstone.
After the deal closes, Paramount plans to acquire Skydance, which will install its own leadership team at the storytelling entertainment company, according to sources. Ellison will serve as CEO, and former NBCUniversal CEO Jeff Shell (currently at RedBird) will run the company’s day-to-day operations.
Skydance must increase its deal offer in hopes of securing more value for Paramount’s non-voting shareholders. complain The original deal offer guaranteed Redstone a premium, but it diluted Redstone’s stake, putting them at a disadvantage.
National Amusements was a regional theater chain, but Sumner Redstone built it into a media giant by acquiring Viacom, Paramount, and CBS. National Amusements only owned about 10% of Paramount, but controlled about 80% of the voting stock, giving it control of the entertainment company.
Shari Redstone Death of father In 2020.
By acquiring a majority stake in National Amusements, Skydance will be able to control Paramount, including the famous studio (and all of its related BroadCast Unitedlectual property), broadcast networks, streaming services, 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 continuing to decline and its credit rating in jeopardy.
In addition to Skydance, Apollo and Sony have also tested the company, which Removal of CEO In April, the company fired Bob Bakish and replaced him with three executives in the “Office of the CEO” role.
National Amusements also faced challenges. The company took $125 million In May, it received strategic investment from BDT and MSD Partners, and the proceeds were used to repay debt and loans.
S&P Global downgraded Paramount’s debt to BB+, considered “junk” territory, in March. “We downgraded Paramount’s ratings due to weakening credit metrics driven by the accelerating decline in linear media and the shift to a more competitive and uncertain streaming model,” S&P’s Naveen Sarma wrote.
He added in a note following Bakish’s departure that “a shared management structure is not sustainable for Paramount Worldwide or any public company beyond a brief transition period.”
However, co-CEOs Brian Robbins, George Cheeks and Chris McCarthy have unveiled their own plan for the company and told employees last month they were already executing it.
As Skydance prepares to take over Paramount and install new leadership and strategies, all of Hollywood and Wall Street will be watching.
More.
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