Paramount Global is on track to have a new owner and financial resources, announcing Sunday a definitive agreement to merge with David Ellison’s Skydance Media.
Under the two-step deal, Skydance and deal partners including the Ellison family and RedBird Capital will first acquire National Amusements Inc., which is Paramount’s controlling shareholder led by Shari Redstone, at $1.75 billion equity value or $2.4 billion enterprise value. After that, Skydance will merge with Paramount where the Ellison family’s Skydance IG and RedBird will invest up to $6 billion, including offering $4.5 billion in stock or cash to shareholders (other than NAI), alongside additional $1.5 billion investment to pay down debt and support strategic initiatives for the new Paramount. The merger with Paramount is an all-stock deal that values Skydance at $4.75 billion and results in a combined company with an enterprise value of $28 billion. Skydance IG will own around 70% of the outstanding equity of new Paramount.
A deal for Paramount has been in the works with several months of messy push and pull, including an abrupt temporary end to negotiations last month. On Sunday Paramount confirmed its Special Committee of the Board of Directors, formed in January to evaluate potential transactions involving both NAI and Paramount, unanimously approved the merger.
Ellison, founder and CEO of Skydance, is set to serve as chairman and CEO of the new Paramount, while former NBCUniversal CEO Jeff Shell will be its president.
The transaction is expected to close by September 30, 2025, but leaves a 45-day window for Paramount to field a better offer. If it gets a superior bid that Skydance doesn’t match, Paramount would have to pay a break-up fee.
Paramount’s existing assets include its movie studio, linear television networks such as CBS, MTV, Nickelodeon, Comedy Central, BET, streaming service Paramount+ and free ad-supported streaming TV service (FAST) Pluto TV. Its content library includes over 200,000 TV episodes and 4,000 films.
In announcing the deal, the company said plans are to “enhance and reinvigorate marquee Paramount and CBS brands,” including by utilizing best in-class tech and modernized infrastructure to offer “scalability and ingenuity focused on delivering content through wholly-owned DTC platforms of Paramount+ and Pluto” while also boosting the CBS and Paramount linear networks.
Skydance, meanwhile, is a full-service independent film and TV studio that finances, owns and produces content. It has partnered with Paramount Global on nearly 30 productions and Skydance is co-owner of key Paramount franchises such as Top Gun, Jack Ryan, Reacher, Mission: Impossible, Star Trek, and Transformers.
“This is a defining and transformative time for our industry and the storytellers, content creators and financial stakeholders who are invested in the Paramount legacy and the longevity of the entertainment economy,” Ellison stated in the announcement, adding he’s grateful to Redstone and family for entrusting Skydance to lead Paramount. “We are committed to energizing the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come.”
The companies said Skydance offers Paramount critical investment (as the media company has faced struggles amid shifts in the media landscape and efforts to build a profitable streaming business), along with easier entry into new media and entertainment verticals. One benefit of the combined company is expanding Paramount’s animation capabilities, bringing Skydance’s in-house creative team, which it said also provides longer-term opportunities for consumer products. The announcement noted Skydance’s interactive and gaming expertise with two in-house game developer studios and franchises, like upcoming Marvel and Star Wars console games. And it brings relationships with the NFL through a 2023 joint venture with Skydance Sports, which complement CBS and its local affiliates.
According to presentation slides released alongside an investor call Monday, the companies expect bottom-up initiatives at the new Paramount to deliver $2 billion in run-rate cost savings. They aim to drive Adjusted OBIDA growth over the next couple of years and to quickly delever the Paramount balance sheet.
And Skydance is combining with Paramount after a bumpy period for the media company. In April, Paramount ousted then-CEO Bob Bakish and replaced him with a trio of executives dubbed “office of the CEO.” Paramount has seen its value decrease by nearly $17 billion since late 2019, per Reuters, as legacy TV business declined and wasn’t offset by streaming efforts.
There had been earlier calls to remove Bakish including by analysts at LightShed Partners, who took issue with strategic moves undertaken by the chief executive and believed launching the Paramount+ app was a mistake, urging Redstone in a March blog to make immediate changes.
The newly confirmed deal marks the end of an era for the Redstone family’s control of the entertainment company, which Sumner Redstone began growing with his acquisition of Viacom in 1987.
“Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king. Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment,” stated Shari Redstone in the deal announcement. “As a longtime production partner to Paramount, Skydance knows Paramount well and has a clear strategic vision and the resources to take it to its next stage of growth. We believe in Paramount and we always will.”