Skydance-Paramount Deal Looms: Skydance Gets Special Committee Approval

The Paramount-Skydance deal is moving closer to closing as David Ellison’s Skydance Media has gained approval from the Paramount Global board’s special committee for their deal to acquire Shari Redstone’s National Amusements and merge Skydance with Paramount, according to multiple media reports.

The deal now goes to the full board for consideration, which is expected to meet Sunday. Bloomberg reported that a formal announcement of the deal is expected Monday.

TheWrap reported last week that Skydance and National Amusements had reached a tentative agreement that would next be referred to Paramount’s special committee. Under the new deal, Ellison would pay Redstone $1.75 billion to acquire her holding company, which controls about 77% of Paramount’s class A voting stock. It would also include a 45-day go-shop provision, which would allow other bidders the opportunity to make a better offer.

Given what happened last time a deal between Paramount and Skydance looked close, it’s prudent to remember it’s not over until a deal is signed. A previous bid, which Redstone scrapped a month ago, was opposed by the company’s minority shareholders, who argued it prioritized Redstone at the expense of the rest of Paramount’s investors.

This new deal, which was revived last week and will not go before shareholders, 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. Late Tuesday, the special committee met over the NAI agreement and advanced to the next stage, vetting the deal to merge Skydance with Paramount.

Others who have expressed interest in acquiring control of Paramount include “Baby Geniuses” producer Steven Paul and former Warner Music Group CEO and chairman Edgar Bronfman Jr, Sony Pictures Entertainment and Apollo Global Management, who submitted a$26 billion all-cash offer in May, 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 Skydance deal, which is backed by RedBird Capital Partners, investment firm KKR and Ellison’s father and Oracle co-founder Larry Ellison, would conclude a months-long saga that began in December, when Skydance began kicking the tires on the media conglomerate’s portfolio of assets, which includes Paramount+, Paramount Pictures, CBS and the MTV and Nickelodeon cable channels.

Representatives for Skydance and Paramount declined to comment. A representative for National Amusements did not immediately return TheWrap’s request for comment.

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 designed to reduce its $14.6 billion in long-term debt, accelerate streaming profitability, return to investment grade credit metrics after a downgrade to junk status, and drive revenue and earnings growth. That plan includes streaming partnerships, divesting assets and $500 million in cost cuts in areas including legal and corporate marketing.

At an employee town hall last month, the executives said they’ve hired bankers to help with asset sales. Last Tuesday, Paramount shares rose on a Bloomberg report that a group including 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. Other possible assets on the auction block could include Pluto TV and the famed Paramount lot, which would be leased back for the studio’s use, four individuals familiar with the matter previously confirmed to TheWrap.

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+.

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