Meet the ex-Goldman Sachs partner behind the scenes of the Skydance-Paramount deal negotiations
Crystal Cox/Insider
- Skydance, the film studio owned by David Ellison, is vying to buy Paramount.
- Skydance's biggest backer is private equity firm RedBird, a top player in sports and media.
- Meet the mastermind behind RedBird, ex-Goldman Sachs partner and Yankees dealmaker Gerry Cardinale.
Paramount's CEO Bob Bakish was ousted on Monday night, putting the entertainment giant one step closer to accepting a merger deal. The would-be buyer, film studio Skydance Media, is owned by David Ellison, son of billionaire Oracle founder Larry.
A key player in the negotiations is private equity firm RedBird Capital Partners. An investor in Skydance since 2020, RedBird is the media company's largest shareholder other than the Ellison family. In the 10 years since its founding, RedBird has emerged as a top dealmaker in sports and entertainment with $10 billion in assets.
Founder and chief executive Gerry Cardinale made his name at Goldman Sachs as the banker to the New York Yankees, the Dallas Cowboys, and the NFL. RedBird, owner of football club AC Milan since 2022, has been on a shopping spree. In February, it bought All3Media, the TV and film production company behind "Fleabag," for £1.15 billion (some $1.4 billion). It attempted to buy the UK newspaper, the Telegraph, before withdrawing on Tuesday.
Skydance and RedBird have been wooing Paramount for months. Paramount's special committee received a revised proposal on Sunday, according to a source close to the negotiations. Under the agreement, Skydance would merge with Paramount, and the combined company would stay public, two sources close to the negotiation said.
David Ellison would be installed as CEO and Jeff Shell, ex-NBCUniversal CEO and current chairman of sports media at RedBird, would report to Ellison as president. The Skydance consortium, including RedBird and smaller shareholder KKR, would inject $3 billion into Paramount with the majority going toward buying back stock and the remainder to paying down debt. The exclusive negotiating period is due to end on May 3. Meanwhile, private equity titan Apollo has reportedly teamed up with Sony for a potential $26 billion offer but has yet to make an official bid.
The deal is typical of Cardinale's playbook. RedBird isn't a typical buyout firm, instead installing new management and leveraging intellectual properties to build larger businesses. Skydance has already successfully co-produced the "Top Gun" reboot with Paramount and holds the rights to produce and finance other Paramount properties, including Transformers.
"I think it's my biggest competitive advantage that I don't get emotionally attached," Cardinale told Business Insider in 2022. "They're all pieces of intellectual property that have a legitimate right to be monetized as long as they balance the fan-social contract at the same time."
(Paramount did not reply to a request for comment in time for publication. At Tuesday's earnings call, executives took no questions and instead played the "Mission: Impossible" theme on a loop.)
Business Insider spoke with 27 of Cardinale's colleagues and peers to learn more about his winning strategy. One of his superpowers, many said, is his relationship savvy. Many of RedBird's business partnerships date back to his Goldman days.
"He had a knack for developing relationships with entrepreneurs, particularly those with more of a maverick style," said Jon Winkelried, the CEO of TPG and the former copresident of Goldman Sachs. "There arse a lot of smart investors who can run the numbers, who can figure out the cash flows, but it is very hard to get high-powered people who have accomplished a lot to want to allocate some of their valuable time to you. People want to spend their time with Gerry."
READ THE FULL STORY: How Gerry Cardinale became the go-to dealmaker for the Yankees, AC Milan, and Ben Affleck
Editor's note: KKR is the largest shareholder of Business Insider's parent company Axel Springer.