Larry Ellison's Skydance Media set to buy Paramount

Skydance Media, the production studio owned by Larry Ellison's son David, is in advanced negotiations to take a significant stake in Paramount Global. The exact nature of the deal has not yet been defined, including whether or not Skydance and its backers RedBird Capital Partners and KKR will take a majority stake. But discussions between the two parties are moving forward quickly, following Skydance and Paramount. conclude an agreement to engage in exclusive discussions last week.

If the deal were to go through, it would cement David Ellisons increase as a powerhouse actor in Hollywood.

For a newcomer like Skydance, the purchase of Paramount Global, usually considered a company in difficulty, would represent a coup d’état. Skydance reportedly owns Paramounts historic library, which includes properties like The Godfather And Titanicthe entire CBS brand and its valuable news media, several cable channels like Nickelodeon and Comedy Central, and a streaming service with 67 million subscribers in Paramount+ among its assets. The conclusion of the affair would announce that the rich son of ninth richest man in the worldwhich would still provide part of the capital necessary to finance the affair may indeed have succeeded in Hollywood.

Ellison first appeared in the film industry as a fresh-faced 23-year-old who many studios and executives thought could make money. Instead, he took his family's money and put it to work building a successful business that created a lasting relationship with Tom Cruise, produced dozens of films, and recently launched in video games. Ellison is now close to closing a deal for one of dying embers of the Golden Age of Hollywood at Paramount Global.

Paramount and KKR declined to comment. RedBird and Skydance did not respond to a request for comment.

The current outline of the deal would be structured so that the Skydance contingent would acquire Shari Redstones' holding company, National Amusements, which controls approximately 77% of Paramount Global's voting shares, but notably less than 10 % of total capital. Skydance and Redstone already have an agreement in principle, according to at Bloomberg. The deal would see Skydance and its partners pay more than $2 billion for National Amusements, giving them control of Paramount. They are also in talks to purchase a number of common shares. The combined number of shares would give Skydance and its partners approximately 45% to just over 50% control of Paramount, according to CNBC.

On Thursday, it appeared that negotiations between the two groups were accelerating. Executives from Paramount and Skydance are expected to meet next week, according to a CNBC report on Thursday, while investment firm RedBird, which specializes in the media sector, will begin due diligence at Paramount.

Skydance would then merge with Paramount Global. If that were to happen, the new company would be led by Ellison with a lead role for former NBCUniversal CEO and current RedBird executive Jeff Shell.

Ellison and Paramount have had a long-standing relationship. When the young scion was just breaking into Hollywood, he financed and produced several Paramount films, including Star Trek And Impossible mission movies. Eventually, he struck out on his own, founding Skydance in 2010. Since then, the company has produced several major hits, including Top Gun: Maverick And Mission Impossible: Dead Reckoning, part one.

In the first days it was hard to shed the rich-kid aura, Ellison said. There was a time when people just thought of us as money, and we knew it, it said THE New York Times in 2021. But there has been a change. Our content, our ideas, their execution have become more important than our capital.

Since then, Skydance has expanded to include animation, video games, and VR content. This also began to attract some of the best talent in the industry. The animation division is headed by John Lassetera man who is already familiar with the encroachments of Silicon Valley on Hollywood, after launching Pixar alongside Steve Jobs. Cruise, who has worked with Skydance on several projects, sang Ellisons' praises effusively in a 2015 film. GQ profile. The Skydances video game division has secure licenses for major IP franchises like Marvel and Star Wars.

If Skydance were to succeed in purchasing Paramount Global, it would not only represent a personal triumph for Ellison, but a corporate triumph for an independent film studio that entered into a deal with a traditional media company as a buyer, not a buyer. as a seller. More often than not in the history of the entertainment industry, successful independent companies were eventually absorbed by the giants that dominated the industry. One need look no further than Pixar, where Lasseter made his name, purchased by Disney for $7.4 billion in 2006. Skydance could also have been operated by a technology company in the same way that Amazon bought MGM for $8.5 billion in 2021.

It remains to be determined whether or not a deal with Skydance represents the best option for Paramount shareholders. Paramount had an independent committee made up of eight of the board's 11 members, charged with finding the best possible deal for the company. On Thursday, three people from this committee, as well as another member of the board of directors, have left their positions as directors. In the meantime, several shareholders are Rebell about the deal, setting up a potential showdown in the boardroom. If the deal falls through, Redstone and the Paramount board may have to settle for another deal, which at the moment appears to be a problem. 26 billion dollars all-cash offering from private equity firm Apollo.

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