The transaction combines the Skydance Investor Group’s (Skydance IG) financial resources, deep operating experience, and expertise in cutting-edge technology with Paramount’s iconic IP, deep film and television library, proven hit-making capabilities, and linear and streaming platforms that reach millions of viewers. New Paramount will be a premier, creative-first destination for storytellers, dedicated to top-quality content and will be positioned to improve profitability, foster stability and independence for creators, and enable more investment in growth areas. The transaction will stabilise and strengthen Paramount as a world-class media enterprise, with a focus on technological advancements, across multiple entertainment platforms including animation, gaming, film, sports, news and television.
The management team of New Paramount, led by David Ellison as Chairman and Chief Executive Officer and Jeff Shell as President, will draw on a wealth of operational experience and proven expertise in driving creative and media company growth designed to improve Paramount’s performance and foster further advancement.
Shari Redstone, Chair of Paramount Global and Chair, President, and CEO of NAI, said: “In 1987, my father, Sumner Redstone, acquired Viacom and began assembling and growing the businesses today known as Paramount Global. He had a vision that ‘content was king’ and was always committed to delivering great content for all audiences around the world. That vision has remained at the core of Paramount’s success and our accomplishments are a direct result of the incredibly talented, creative, and dedicated individuals who work at the company. Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king. Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment. As a longtime production partner to Paramount, Skydance knows Paramount well and has a clear strategic vision and the resources to take it to its next stage of growth. We believe in Paramount and we always will.”
Importantly, the transaction preserves the over 100-year-old legacy of Paramount as one of Hollywood’s most iconic production companies and CBS’s stature as a cherished source of news and entertainment. It also preserves American jobs, fosters continued innovation and secures a prosperous future for the creative community at Paramount, while protecting the legacy that viewers across the globe know and love.
With a 15-year history of partnering on highly successful projects, the Skydance-Paramount combination will unite key intellectual property and enhance Paramount’s exposure in cutting-edge and next-generation digital businesses. Skydance’s exceptional pool of in-house creative animation talent, led by pioneer John Lasseter, will expand Paramount’s animation capabilities as well as consumer products opportunities over the long-term.
Skydance offers Paramount critical investment and significant entrees into burgeoning new entertainment and media verticals with clear economic upsides. For example, Skydance brings state-of-the-art interactive and gaming proficiencies, including two in-house game developer studios with industry-leading franchises, such as Skydance’s upcoming console games in Marvel and Star Wars and hit VR game, The Walking Dead. Skydance also brings an exciting partnership with the NFL, which complements the resources of CBS and its local affiliates, creating a premier global multi-sports studio. As a long-term global rights buyer with expansive distribution across both direct-to-consumer and linear channels, Paramount’s value proposition will be complemented as a result of the transaction.
David Ellison, Founder and Chief Executive Officer of Skydance, said: “This is a defining and transformative time for our industry and the storytellers, content creators and financial stakeholders who are invested in the Paramount legacy and the longevity of the entertainment economy. I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount. We are committed to energising the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come.”
Gerry Cardinale, Founder and Managing Partner of RedBird Capital, commented: “The recapitalisation of Paramount and combination with Skydance under David Ellison’s leadership will be an important moment in the entertainment industry at a time when incumbent media companies are increasingly challenged by technological disintermediation. As one of the iconic media brands and libraries in Hollywood, Paramount has the intellectual property foundation to ensure longevity through this evolution – but it will require a new generation of visionary leadership together with experienced operational management to navigate this next phase. RedBird is making a substantial financial investment in partnership with the Ellison family because we believe that the pro forma company under this leadership team will be the pace car for how these incumbent legacy media businesses will need to be run in the future.”
On behalf of the Special Committee, Charles E. Phillips JR, added: “We are pleased to have reached an agreement that we believe delivers to Paramount stockholders both immediate value and future upside opportunity. The Special Committee, with the assistance of independent financial and legal advisors, conducted a thorough review of actionable potential transactions to drive value for our stockholders. In addition to economic value, the Special Committee took into account the certainty of closing and regulatory approvals. Following extensive negotiations with Skydance, we believe this proposed transaction will position Paramount for success in a rapidly evolving industry landscape. Upon closing, it will deliver immediate cash consideration at a premium to both the minority Class A and Class B stockholders, who will also benefit from what we believe to be considerable upside through continued equity participation in New Paramount. The Special Committee would like to thank our Co-CEOs George Cheeks, Chris McCarthy and Brian Robbins for making significant progress on optimising company operations in a short period of time, positioning Paramount for a sustainable transformation and a path to profitable growth going forward.”
Transaction Overview
The proposed merger creates immediate value, upside opportunity and stability for all of Paramount’s stockholders and employees during a period of industry transition. Under the terms of the agreement, which has been approved by the Paramount Board of Directors, acting on the unanimous recommendation of the Special Committee, and by National Amusements, Inc. (NAI), majority owner of Paramount’s Class A stock, Skydance will merge with Paramount in a transaction valuing New Paramount at an enterprise value of approximately $28 billion (€25.8bn). Existing Skydance investors will receive 317 million newly issued Class B shares in New Paramount valuing Skydance at $4.75 billion based on $15 per Paramount Class B share.
Skydance IG, led by the Ellison Family and RedBird Capital Partners, will invest up to $6 billion to:
- Offer Class A stockholders other than NAI an election to receive in the merger $23 cash per share or 1.5333 shares of Class B stock of New Paramount;
- Offer Class B stockholders other than NAI an election to receive in the merger $15 cash per share or one share of Class B stock of New Paramount, subject to proration if Class B elections exceed $4.3 billion in the aggregate (approximately 48 per cent of the non-NAI float as of the date of this release);
- Use the additional capital to paydown debt and re-capitalise the balance sheet of New Paramount to support strategic initiatives.
The merger consideration represents a 48 per cent premium to the price of the Class B stock as of July 1, 2024, and a 28 per cent premium to the Class A stock on the same date. Also, by continuing to own shares of the new combined company, Paramount Class B stockholders will have the opportunity to participate in the new company’s long-term value creation potential.
NAI and its owners have entered into a definitive agreement to sell NAI to Skydance IG for $2.4 billion on a cash-free, debt-free basis. Following completion of the transaction, only Skydance IG will hold Class A shares.
Following the close of the transaction and the growth equity investment and assuming full participation in the cash election by Class B stockholders, Class B stockholders will own approximately 30 per cent of the outstanding equity of New Paramount and Skydance IG will own approximately 70 per cent of the outstanding equity of New Paramount.
Management Team and Synergies
When the transaction closes, David Ellison will become Chairman and Chief Executive Officer. Jeff Shell, Chairman of RedBird Sports & Media and former CEO of NBCUniversal, will be President. Mr. Ellison, as the founder and Chief Executive Officer of Skydance, brings hands-on experience in building a successful creative media and technology-enabled enterprise, with a proven track record of strong content development including runaway hits like Top Gun: Maverick. Shell brings deep operational expertise in leading and transforming media and entertainment businesses.
The transaction will strengthen Paramount and enhance its balance sheet flexibility, allowing the Company to invest in new initiatives and deliver greater cash flow growth. The transaction serves as a catalyst to re-imagine the Company’s operating model, transform its technology platform, streamline its organization and accelerate other initiatives already underway.
The overriding objective of the repositioned New Paramount platform and properties is to bring stability to the business, protect creative independence and to enable investment in growth initiatives.
Board Approval
On January 2nd, the Board of Directors of Paramount formed a Special Committee of independent directors to evaluate strategic alternatives, including third party proposals. The Special Committee reviewed, negotiated, unanimously approved and recommended the Skydance transaction for approval by the Board. Following formal approval by the Board, the Transaction Agreement was signed.
Transaction Approvals
NAI, which holds approximately 77 per cent of the Paramount Class A shares, has delivered a written consent approving the transaction. No further stockholder approval is required. The consummation of the transaction is not subject to any financing condition. Completion of this transaction is subject to regulatory approvals and other customary closing conditions. The transaction is anticipated to close in the first half of 2025.