Paramount Global, one of the industry’s oldest and most storied companies, has agreed to merge with independent film studio Skydance Media. The merger, valued at an estimated $28 billion (£21.9 billion), marks a significant shift in the media landscape and the end of an era for the Redstone family, whose late patriarch, Sumner Redstone, built Paramount into a media empire.
Under the terms of the deal, Shari Redstone, Paramount’s non-executive chair, will sell her family’s controlling stake in the company. This complex transaction will see the formation of a new firm, combining the strengths of both Paramount Global and Skydance. Shari Redstone expressed optimism about the merger, stating, “Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment.”
Founded in 1914, Paramount Pictures Corporation has a rich history, having produced iconic films such as Chinatown, Breakfast at Tiffany’s, The Godfather, Star Trek, and the Mission: Impossible series. Despite its storied past, Paramount Global has faced significant challenges over the past decade, with its shares plummeting by more than 75% in the last five years.
The group, which includes television networks CBS, Comedy Central, Nickelodeon, and MTV, boasts a global reach of over 4.3 billion subscribers across more than 180 countries. However, the rapid evolution of the entertainment industry, driven by the rise of video streaming, has necessitated a strategic shift.
Skydance Media, owned by David Ellison, son of Oracle founder Larry Ellison, has emerged as a formidable player in the film industry. The company has financially backed several of Paramount’s recent blockbuster hits, including Top Gun: Maverick and Star Trek Into Darkness. Under the merger agreement, Skydance will invest approximately $8 billion in Paramount, including a $2.4 billion payment for National Amusements, the entity controlling Paramount.
The merger is expected to close by next summer and is anticipated to position Paramount for renewed success amid the ongoing transformation of the global entertainment industry. The deal follows eight months of negotiations, during which Redstone engaged with several potential partners, including Sony and private equity firm Apollo. The merger also follows the departure of Paramount’s chief executive Bob Bakish, who left the company in April after clashing with Ms. Redstone over the Skydance deal.
By combining their resources and expertise, Paramount Global and Skydance aim to create a powerhouse capable of competing in the increasingly competitive entertainment market. The merger is seen as a strategic move to leverage Paramount’s rich legacy and global reach with Skydance’s innovative approach and financial backing.
