Skydance Investors in Talks to Gain Control of Paramount Global Via National Amusements Takeover

Skydance Media and Paramount Global’s controlling shareholder are engaged in talks that could fold the home of CBS, Nickelodeon and Comedy Central into a new entity controlled by the people who produce starry Hollywood franchises such as “Mission Impossible” and “Tranformers.”

Shari Redstone, who controls Paramount’s corporate parent, National Amusements Inc., is in early discussions with a consortium of investors led by Skydance founder David Ellison (pictured above), according to a person familiar with the matter. The talks may not come to fruition, this person cautions, but if they do, the investors would purchase a controlling stake in National Amusements that they would subsequently use to merge Skydance with Paramount Global.

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Representatives for Skydance did not respond to a query seeking comment. National Amusements and Paramount declined to comment. Skydance has for several years produced many of the biggest films released by Paramount’s movie studio, including “Top Gun: Maverick” and “Transformers: Rise of the Beasts.”

The Wall Street Journal previously reported that the companies were engaged in discussions.

The deal would seem poised to effectively end the Redstone family’s direct control of Paramount and its many media assets, which also include CBS, MTV, Nickelodeon, VH1, Comedy Central, BET Networks and other channels. But Paramount Global overall has seen its market cap and financial performance decline sharply since the company was created out of 2019 merger of CBS Corp and Viacom Inc. — both of which were controlled by the Redstone family.

The company’s Paramount Pictures movie studio has been in turnaround mode for several years and some of its top cable networks have been starved of fresh content for a similar period of time. MTV and Comedy Central, for example, largely subsist on marathons of repeats punctuated by an occasional original. Paramount’s position has grown weaker amid the rise of streaming video, which has pulled viewers away from networks that once has sizable audiences for live linear viewing, even CBS.

Still, Paramount has assets that any media investor would covet. It has lucrative sports rights deals with the NFL and the NCAA through CBS, and boasts a roster of late-night programs that continue to win attractive audiences. Nickelodeon remains a popular kids’ destination, and young viewers’ media habits have proven a deciding factor in what streaming outlets consumers choose. Warner Bros. Discovery has also expressed interest in possibly acquiring Paramount assets, according to people familiar with the situation. But WB Discovery is also weighed down with billions of dollars in debt and may not be able to finesse an acquisition on an accelerated timetable if the Skydance conversations progress quickly.

But a Skydance transaction could also prove difficult. Paramount Global has a dual-stock structure, giving the Redstone family control of nearly 80% of the voting power in Paramount Global although it holds only about 10% of the equity in the company. A source close to the situation said Ellison’s Skydance group has yet to do extensive due diligence on the state of Paramount’s operations, the person familiar with the matter cautioned. It remains possible that the Skydance investors could walk away from a deal.

The major assets in Paramount Global were acquired under the direction of legendary entertainment mogul Sumner Redstone, father of Shari Redstone. Under his guidance, CBS and Viacom were merged in 2000 but then separated again in 2006 based on Sumner Redstone’s conviction both companies would be more highly valued by Wall Street as separate entities. Shari Redstone waged a long and tough campaign with the boards of National Amusements, CBS and Viacom to orchestrate the re-merger of the companies in late 2019.

As potential suitors circle, Shari Redstone has major sway in any transaction given her preferred voting shares. Redstone’s personal reps, Paramount Global and National Amusements have made no public comment about the swirl of rumors surrounding the company’s future.

(Pictured: Skydance’s David Ellison)

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