Skydance-Paramount Merger: End of a Legacy
Skydance’s merger with Paramount is a reality, and surprisingly a traditional company in the film industry will sooner or later lose its presence.
The complex transaction values Skydance at US$4.75 billion.
In this sense, Skydance will first acquire National Amusements before merging with Paramount.
Ellison’s company will invest $2.4 billion in cash to acquire National Amusements, along with $4.5 billion in stock and cash to merge Skydance with Paramount.
In addition to another $1.5 billion to strengthen Paramount’s capital.
The deal marks the end of Shari Redstone’s control of Paramount Pictures, a legacy forged by her father, Sumner Redstone, through decades of aggressive acquisitions since the 1980s.
Ellison and former NBCUniversal chief Jeff Shell will lead the combined entity, with Ellison as CEO and Shell as chairman.
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Skydance-Paramount Merger
During a call with investors, Ellison and Shell laid out a plan to position Paramount as a technology leader in the competitive streaming space.
They announced $2 billion in cost cuts as a strategic move.
Reflecting on Paramount’s current state, Shell acknowledged the challenges.
“We love the creative engine of this company, but obviously a big part of the company is in the linear world – and we know that linear is challenged and in decline.”
The merger between Skydance and Paramount ends a complex saga that began in December, leading to exclusive negotiations in April.
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The high-stakes talks resulted in the departure of longtime CEO Bob Bakish and the interim leadership of Brian Robbins, Chris McCarthy and George Cheeks, at the helm of Paramount Pictures, Showtime and MTV Entertainment Studios, and CBS, respectively.
With streaming replacing traditional television, Paramount, which owns cable channels such as MTV and Comedy Central, faced immense challenges.
Paramount’s efforts to embrace streaming with Paramount+ came late, struggling to gain traction, and the company’s valuation plummeted, with the stock dropping more than 75% in five years.
