Paramount, Skydance deal falls through
Future uncertain for the studio
A merger between Paramount Global and Skydance has collapsed as controlling company National Amusements has ended talks.
National Amusements, Inc. (NAI) is the controlling shareholder of Paramount Global, owned by Shari Redstone, daughter of the late Sumner Redstone, who ran NAI and controlled the former Viacom. She reportedly had a deal with Skydance, run by David Ellison and producer of Paramount blockbuster 2022 movie Top Gun: Maverick. Skydance also produces animation projects, TV shows, and sports documentaries such as Hard Knocks (which features the Chicago Bears in an upcoming edition) and The Pick Is In, a documentary following four teams on NFL Draft night, including the Bears.
Skydance and Paramount were in on-again, off-again talks and had an exclusive negotiating period with each other. But despite the months of negotiations, a deal never came together because it simply became too complicated – Skydance wanted to pay cash to buy out Redstone’s shares of National Amusements, then use the proceeds to buy Paramount in an all-stock deal, an idea Paramount shareholders rejected. Redstone must’ve listened to those shareholders and changed her mind about the whole thing as she once favored the plan.
Things even got more messy when Redstone sought a vote from Paramount’s shareholders who were not affiliated with National Amusements – a plan Skydance opposed.
“NAI is grateful to Skydance for their months of work in pursuing this potential transaction and looks forward to the ongoing, successful production collaboration between Paramount and Skydance,” said an NAI spokesperson in a statement. “NAI supports the recently announced strategic plan being executed by Paramount’s Office of the CEO as well as their ongoing work and that of the Company’s Board of Directors to continue to explore opportunities to drive value creation for all Paramount shareholders.”
The deal’s collapse now leaves Paramount with an uncertain future – Paramount Global is still saddled with nearly $15 billion in debt as other entities are looking to swoop in, including Sony/Apollo and ex-Warner Music Group and Seagram CEO Edger Broteman, Jr. with Bain Capital. A Sony deal could trigger anti-trust concerns, and its foreign ownership could create an issue for CBS, as broadcasters are not allowed to be owned by foreign conglomerates (Sony is based in Tokyo, Japan.) Paramount also has a portfolio of cable networks, with virtually all of them in decline. And its Paramount Plus premium streaming service continues to lag behind its competitors.
Paramount Global was trading down Tuesday when news of the failed merger broke, hovering around $11 per share. On April 29, Paramount fired CEO Bob Bakish and split his duties between three executives, rechristening it as “The Office Of The CEO”.