NEW YORK (AP) — Entertainment giant Paramount is merging with Skydance, ending the Redstone family’s decades-long run in Hollywood and injecting badly needed cash into the long-established studio that has struggled to adapt to a changing entertainment landscape.
It also signals the rise of a new strongman: David Ellison, the founder of Skydance and son of billionaire Larry Ellison, the founder of the software company Oracle.
Shari Redstone’s National Amusements owns more than three-quarters of Paramount’s Class A voting stock through the estate of her late father, Sumner Redstone, and she has fought to maintain control of the company, which also owns CBS, which produced blockbuster films such as “Top Gun” and “The Godfather.”
But Redstone agreed to the deal on less-than-similar terms just weeks after turning down a similar deal with Skydance.
“As the industry evolves, we want to strengthen Paramount for the future while ensuring content remains king,” said Redstone, who also serves as chairman of Paramount Global.
The combined company will be valued at approximately $28 billion.
Santa Monica, California-based Skydance has produced some of Paramount’s biggest hits in recent years, including the Tom Cruise film “Top Gun: Maverick” and the “Mission: Impossible” series.
Skydance was founded by David Ellison in 2010 and entered into a production partnership with Paramount Pictures shortly thereafter. Ellison will become chairman and chief executive officer of what will be called New Paramount if the deal is approved by U.S. regulators.
The on-and-off merger journey comes at a turbulent time for Paramount, which announced a restructuring plan that included significant cost-cutting at its annual shareholders’ meeting in early June.
Paramount’s management has been in a state of flux since CEO Bob Bakish was replaced by a three-man “Office of the CEO” after numerous disputes with Redstone earlier this year. Four directors have also been replaced.
But Paramount has struggled for years to find its footing, with its cable business in decline. To capture today’s growing streaming audience, the company is looking to expand its network of streaming services. Paramount+ launched in 2021But losses and liabilities continue to mount.
Sumner Redstone Paramount Global used its family-owned cinema chain National Amusements to build a vast media empire that also includes CBS and Viacom. The two companies have merged and separated multiple times over the years, most recently in 2019, reversing a separation that was completed in 2006. ViacomCBS changed its name to Paramount Global in 2022.
Under Sumner Redstone’s leadership, Viacom became one of the nation’s largest media companies, including pay-television channels MTV and Comedy Central and the film studio Paramount Pictures.
Skydance is a company with a rich history and extensive media assets, and it is not the only company targeting Paramount in recent months, with Apollo Global Management and Sony Pictures also making competing bids.
Late last year, Warner Bros. Discovery was also in the spotlight for discussing a possible merger with Paramount. But by February, Warner had Reportedly Those negotiations were called off.
