Skydance Media and Paramount Global officially announced Sunday that they are merging.
Shari Redstone, Paramount's non-executive chair, will relinquish the family's controlling stake through a complex transaction that will lead to the merger, according to Reuters.
It is the end of an era for the Redstone family, whose media empire was built by the late Sumner Redstone. His transformation of a chain of drive-in theaters into a conglomerate included Paramount Pictures, CBS, and cable networks like Comedy Central, Nickelodeon, and MTV.
The merger will unite Paramount — the studio behind classics such as "Chinatown," "The Godfather," and "Breakfast at Tiffany's" — with Skydance, its financial collaborator on recent hits like "Top Gun: Maverick," "Mission: Impossible-Dead Reckoning," and "Star Trek Into Darkness."
It will make David Ellison, the 41-year-old founder of Skydance, a significant figure in Hollywood. He will inherit a media company facing numerous challenges in an industry disrupted by the rise of streaming services.
Since late 2019, Paramount has lost nearly $17 billion in value, as traditional TV revenues declined faster than its Paramount+ streaming service could compensate.
The merger follows the departure of former Paramount Global CEO Bob Bakish, who was replaced by a group of executives proposing $500 million in cuts, asset sales, and seeking a joint venture partner for Paramount+. These plans, which could lead to further layoffs, are now uncertain.
The trio had proposed $500 million in cuts, asset sales, and seeking a joint venture partner for Paramount+. These plans, which could lead to further layoffs, are now uncertain.
Ellison is expected to bring veteran media executive Jeff Shell, former NBCUniversal CEO, into Paramount once the deal is finalized.
Negotiations for the Paramount-Skydance merger have been ongoing for months, initially breaking down on June 11. At that time, Skydance and its partners had agreed to acquire the Redstone family's holding company, National Amusements, which controls 77% of Paramount's voting shares. But, talks stalled over National Amusements' demand for non-Redstone shareholder approval, which Skydance opposed.
Other potential bidders, including producer Steven Paul, Seagram heir Edgar Bronfman with Bain Capital, and IAC Chair Barry Diller, expressed interest. However, discussions between Ellison and Redstone quietly resumed and progressed, according to the Reuters report.
Skydance improved its offer, increasing the Redstone family's payout for National Amusements to $1.75 billion and providing stronger legal protections against shareholder lawsuits.
Ellison and his financial partners, including RedBird Capital, also committed $1.5 billion to strengthen Paramount's finances and proposed buying 50% of its nonvoting shares at $15 each. Class A voting stockholders would receive $23 per share.
The deal includes a 45-day period for Paramount to consider better offers.
