Paramount, Skydance Merger Is on Again in $2.4 Billion Deal

The deal to sell Paramount Global that was thought to be dead resurfaced and headed unexpectedly toward the finish line on Tuesday when Shari Redstone’s National Amusements closed a tentative $2.4 billion deal with David Ellison’s Skydance Media.

The deal came a day after news leaked that billionaire mogul and once-Paramount executive Barry Diller had entered the competition for Paramount, and set off what could become an all-out bidding war. But insiders close to the tentative deal said the surprise Skydance agreement appeared to be moving forward apace. Late Tuesday the special committee met over the NAI agreement and advanced to the next stage, vetting the deal to merge Skydance with Paramount.

“National Amusements and Skydance have reached terms and the deal has been referred back to Paramount’s special committee,” an individual close to the deal told TheWrap.

Under the agreement, Ellison’s Skydance would pay $1.75 billion in cash to acquire NAI before merging with the Hollywood studio. The deal, which would have an enterprise value of about $2.4 billion, also includes a 45-day go-shop provision that gives other bidders the opportunity to make a better offer.

Should both stages of the two-step deal be finalized by Paramount’s special committee, it would likely put Ellison and former Universal chairman Jeff Shell in the executive leadership of Paramount, according to a knowledgeable insider.

But unlike the bid that fell through a month ago, this deal will not go before shareholders for approval. The head of the special committee, Charles Phillips, had previously voiced concerns about the deal; he is a former Oracle executive and has history with Ellison’s father Larry Ellison, the co-founder of Oracle. It is not known if he still has concerns.

The deal has propitious timing, coming just a week before the Allen & Co. conference in Sun Valley, Idaho, where media and tech moguls gather every summer and where deals are often hatched or concluded. Insiders speculated that Redstone’s camp may have leaked the Diller negotiation ahead of Sun Valley, which had been underway for weeks, to put pressure on Skydance.

Redstone and Diller are expected to be in Sun Valley. Ellison will not be in attendance, according to his representative.

Representatives for Paramount, Skydance and National Amusements declined to comment on the tentative deal. News of the deal was first reported by The Wall Street Journal.

Other interested bidders for Paramount besides Diller include “Baby Geniuses” producer Steven Paul and former Warner Music Group CEO and chairman Edgar Bronfman Jr., all of whom have the opportunity to make counterbids.

Other Paramount bidders include Sony Pictures and Apollo Global Management, who submitted a $26 billion all cash offer, and Allen Media Group founder Byron Allen, who placed a $30 billion bid including debt. Warner Bros. Discovery CEO David Zaslav also met with former Paramount CEO Bob Bakish about a potential merger in December, though those talks were later halted.

The new deal comes after Redstone scrapped the two-step deal with Ellison last month, which would have included $1.5 billion in cash to help reduce the company’s $14.6 billion in debt and the option for class B shareholders to cash out at $15 apiece. That deal was opposed by the company’s minority shareholders, who argued it prioritized Redstone at the expense of the rest of Paramount’s investors.

Shares of Paramount Global jumped over 8% in after-hours trading on Tuesday.

In the meantime, Paramount is currently being run by its new co-CEOs Brian Robbins, George Cheeks and Chris McCarthy, who replaced Bakish in April. The trio unveiled a long-term strategy last month that includes streaming partnerships, divesting assets and $500 million in cost cuts in areas including legal and corporate marketing.

At an employee town hall last week, the executives said they’ve hired bankers to help with asset sales. The stock rose this week on news that BET was once again in play with buyers. Other Assets on the auction block include Pluto TV, VH1 and the famed Paramount lot itself, which would be leased back for the studio’s use, four individuals familiar with the matter previously confirmed to TheWrap. According to Bloomberg, a group that includes BET CEO Scott Mills and CC Capital founder and senior managing director Chinh Chu are considering offering up to $1.7 billion to acquire BET.

Robbins, McCarthy and Cheeks are also advancing talks with potential partners in international markets that will “significantly transform the scale and economics” of its streaming business, which is currently on track to reach domestic profitability in 2025. The Office of the CEO said they could team up with other streamers or technology platforms on a joint venture or long-term partnership. CNBC reported on Monday that Warner Bros. Discovery is interested in a potential merger of Max and Paramount+.

Paramount, which has a market capitalization of $7.48 billion, has seen its stock price fall 25% in the past six months and 34% in the past year.

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