NEW YORK.- The entertainment giant Paramount to merge with Skydance, closing a decades-long run of the Redstone family in Hollywood and injecting desperately needed money into a study legacy that has struggled to adapt to a changing entertainment landscape.
It also marks the emergence of a new power player, David Ellison, founder of Skydance and son of billionaire Larry Ellison, founder of the software company Oracle.
Shari Redstone’s National Amusements has owned more than three-quarters of Paramount’s Class A voting stock through the estate of her late father, Sumner Redstone. She had fought to maintain control of the company that owns CBS, which is behind blockbuster films like Top Gun y The Godfather (The Godfather).
However, just weeks after rejecting a similar deal with Skydance, Redstone reached an agreement on terms that had not changed much.
“Given the changes in the industry, we want to strengthen Paramount for the future while ensuring that content remains king,” said Redstone, president of Paramount Global.
The new combined company is valued at around $28 billion.
Santa Monica, California-based Skydance has helped produce some of Paramount’s biggest hits in recent years, including Tom Cruise films like “Top Gun: Maverick” and installments of the Star Wars: The Force Awakens series. Mission Impossible (Are you Impossible?).
Skydance was founded in 2010 by David Ellison and quickly formed a production partnership with Paramount that same year. If the deal is approved by U.S. regulators, Ellison will become chairman and CEO of what will be called New Paramount.
The on-again, off-again merger comes at a tumultuous time for Paramount, which at an annual shareholder meeting in early June laid out a restructuring plan that includes significant cost cuts.
Paramount’s leadership has been volatile this year after CEO Bob Bakish, following a series of disputes with Redstone, was replaced by a three-man CEO office. Four of the company’s directors were also replaced.
Paramount, however, has struggled to find its footing for years, and its cable business has been hemorrhaging. To capture today’s growing streaming audience, the company launched Paramount+ in 2021, but losses and debt have continued to mount.
Sumner Redstone used National Amusements, his family’s movie theater chain, to build a vast media empire that included CBS and Viacom, which have merged and split several times over the years. Most recently, the companies joined forces again in 2019, undoing the split completed in 2006. The company, ViacomCBS, changed its name to Paramount Global in 2022.
Under Sumner Redstone’s leadership, Viacom became one of the titans of media, home to the pay-TV channels MTV and Comedy Central and the film studio Paramount Pictures.
It’s a company with a rich history as well as a deep bench of media assets, and Skydance isn’t the only one to have pursued Paramount in recent months: Apollo Global Management and Sony Pictures also made competing offers.
Late last year, Warner Bros.’ Discovery also made headlines for exploring a possible merger with Paramount. But by February, Warner had halted those negotiations.