In the end, maybe David just needed to call Tyler.
The merger between Shari Redstone’s famed but fading Paramount Media empire and Hollywood studio Skydance may finally be inked, but it’s not quite set in stone yet. Before the signings dry up, it’s worth asking about the possibility of another bust.
Last month, after Redstone appeared to have dissolved the partnership after months of on-and-off negotiations, Skydance Chief Executive David Ellison called Shari’s son, Tyler Kolff, in an attempt to reconcile with the family and get negotiations back on track, and it appears to have worked, On the Money has learned.
Though it hasn’t been widely reported, Kolff, a lawyer and rabbi, spent years helping his mother run the media empire she inherited from her father, the notoriously mercurial media mogul Sumner Redstone (and, of course, Tyler’s grandfather).
Ms. Kolff had been a key adviser to her mother during months of negotiations with Skydance, and was present at the meetings with Mr. Ellison in December when the complex deal for Skydance to take control of Paramount through its purchase of a stake in Paramount’s parent company, National Amusements, was first planned.
In a strange twist, the deal also includes a multibillion-dollar infusion from Skydance into Paramount, effectively buying Skydance, the boutique studio that Ellison founded with the help of his father, Larry Ellison, founder of Oracle, who is now worth $177 billion, according to Forbes magazine.
Indeed, insiders say it was very much a family affair, with Kolff, 39, an heir to a media empire, and Ellison, 41, the scion of a Silicon Valley icon, developing an intriguing relationship amid the drama of the deal: They had a personal rapport that helped keep the deal afloat despite the drama, they were told.
Still, things can always get messy in any family drama — and they did: Shari and Tyler were reluctant to part ways with the family business and hand the Sumner legacy over to an up-and-coming producer (Ellison’s credits include “Top Gun: Maverick”).
The venture will also be run by Redbird Capital, a private equity firm led by media banker Jerry Cardinale, which has provided Ellison with some capital and new management expertise. Cardinale will sit on the new company’s board of directors. As I’ve reported, Jeff Shell, the longtime NBCUniversal chief executive who will work with Cardinale on Redbird, will serve as chief executive of the company formerly run by the Redstone family.
Conversely, the current management team that Team Shari has assembled will be gone. Shari is in Idaho this week for the Sun Valley Conference, which may be her last public appearance as a media mogul before she becomes just another semi-rich person.
It’s a hard truth to swallow, but there’s a reality about today’s media landscape that wasn’t there when Sumner was scrambling to build Paramount in the 1990s: it sucks.
Sure, Paramount has great legacy assets like its big studios, its CBS network, its sports programming, MTV and BET. But a look at its balance sheet shows that they’re all melting ice, losing viewership and advertising dollars fast in an era of cable-churn. Paramount+ streaming is a tough business. People aren’t going to the movies as much as they used to.
In reality, the family fortune is dwindling, and Ellison has the money to protect it.
Meanwhile, as the difficult deal negotiations dragged on from winter to spring to summer, something important was being overlooked: money. Shari was trying to protect her family’s fortune and believed she had been duped by executives on the other side who expected nearly $2 billion for a controlling stake in Paramount. Skydance Redbird, meanwhile, thought she’d be settled for closer to $1.7 billion.
I’m told last month, as final approval was just about to be completed, she saw the fine print and became frustrated, venting her frustration at missing out.
That’s where David Ellison and Tyler Korff came in. Ellison was frantically negotiating with not only Cardinale but also his father, who knew how to make deals, so he resumed dialogue with Tyler, 39, and his mother, and a compromise was reached.
In the end, the dividend on Redstone’s shares was increased to $1.75 billion and a compensation compromise was made to protect the family from shareholder lawsuits, because public shareholders, as opposed to the family, would get nothing up front except a new company with a better balance sheet, and here things could go wrong again.
