Shari Redstone’s National Amusements Scraps Skydance-Paramount Merger

Discussions halted Tuesday after the media conglomerate’s controlling shareholder and David Ellison failed to reach “mutually acceptable terms”

Skydance Media CEO David Ellison and National Amusements President Shari Redstone
Skydance Media CEO David Ellison and National Amusements President Shari Redstone (Getty Images / Illustration by TheWrap)

Shares of Paramount Global dropped 7% at close on Tuesday after Shari Redstone decided to end talks on a merger deal with David Ellison’s Skydance Media after failing to reach “mutually acceptable terms.”

The decision comes after months of negotiation with Skydance, who proposed a two-step deal that would’ve seen the studio acquire National Amusements, which controls 77% of Paramount’s voting stock. The second step would’ve seen the studio merge with Paramount to form a combined company.

“NAI is grateful to Skydance for their months of work in pursuing this potential transaction and looks forward to the ongoing, successful production collaboration between Paramount and Skydance,” the company said in a statement.

A representative for Skydance declined to comment. News of the talks ending was first reported by The Wall Street Journal.

Paramount’s independent special committee evaluating bids had reportedly previously recommended Skydance’s latest revised offer in May, which aimed to make the deal more equitable for the media conglomerate’s class B shareholders. Those investors argued that the bid was prioritizing Redstone at the expense of the rest of the company’s shareholders.

In a statement, the special committee said it met on Tuesday to discuss progress on the discussions with Skydance, but was informed by National Amusements that it did not have an agreement on a deal and didn’t anticipate a path forward.

While the two parties agreed to the deal terms last week, The New York Times reported that Redstone was seeking legal protection from potential lawsuits through indemnification as well as potentially giving minority shareholders a vote.

Skydance, which is valued at more than $4 billion, has been a co-producer with Paramount on projects including the “Mission: Impossible” franchise and “Top Gun: Maverick.” Its investors include RedBird Capital Partners, KKR, Chinese tech giant Tencent and Oracle cofounder Larry Ellison.

In addition to Skydance, Sony Pictures Entertainment and Apollo Global Management submitted a joint $26 billion all-cash offer for the company, which would see the former take a majority stake and operational control and the latter take a minority stake. While the pair signed NDAs to begin discussions with Paramount, The New York Times reported that they have since backed away from the original offer.

Former Paramount Global CEO Bob Bakish also met with Warner Bros. Discovery CEO David Zaslav in December about a potential merger, though those talks later halted. Additionally, Allen Media Group founder Byron Allen also placed a $30 billion bid including debt, though it was unclear how that would have been financed.

Bakish stepped down from the CEO role in April and was replaced with an Office of the CEO, comprised of Paramount Pictures and Nickelodeon CEO and president Brian Robbins, CBS CEO and president George Cheeks and Showtime/MTV Entertainment Studios and Paramount Media Networks CEO and president Chris McCarthy.

During Paramount’s annual meeting last week, the trio unveiled a long-term strategic plan designed to reduce its $14.6 billion in long-term debt, return to investment grade metrics after a credit downgrade to junk status and drive revenue and earnings growth. That plan includes partnerships in streaming, $500 million in cost cuts and divesting assets.

The executives plan to address Paramount’s employees at a town hall on June 25. They will also unveil more details about the strategic plan during Paramount’s second quarter earnings call in August.

NAI expressed support for the Office of the CEO’s plan on Tuesday as well as their ongoing work and the work of the board of directors to “explore opportunities to drive value creation for all Paramount shareholders.”

With the Skydance talks over, Redstone will likely pursue a sale of solely National Amusements.

NAI has received an expression of interest from an investor consortium led by “Baby Geniuses” producer Steven Paul, an individual familiar with the matter previously told TheWrap. Additionally, The Journal reported that former Warner Music Group CEO and chairman Edgar Bronfman Jr. and Bain Capital are eyeing a bid for the holding company.

Paramount, which has a market capitalization of $7.69 billion as of Tuesday’s close, has seen its stock fall 32% in the past six months, 23% year to date and 33% in the past year.


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