Skydance & Paramount $26 Billion Merger
ENTERTAINMENTBUSINESS
The CEO of Skydance Media, David Ellison, has unveiled an ambitious vision for Paramount Global as a cutting-edge tech-media hybrid company post its merger with Paramount, the owner of Paramount Pictures movie and television studios, the CBS television network, and CBS News.
Skydance will initially pay $2.4 billion for National Amusements, which holds 77% of the voting shares of Paramount. Shareholders with non-voting stock will receive $15 per share or one share of non-voting stock in the new company. For Class A shareholders other than National Amusements, they will receive $23 per share or the right to obtain 1.5333 non-voting shares in the merged company. The merger with Skydance in an all-stock transaction values Paramount Global at $4.75 billion. The deal also allows other potential bidders for Paramount 45 days to submit a competing offer, aiming to address any concerns from shareholders who felt that Skydance's initial bid undervalued their stake in the media company and the transaction is subject to regulatory approval.
Paramount is currently offering several of its assets for sale, including BET and VidCon. This effort is expected to continue under Skydance Media, as Ellison aims to sell off non-core assets. According to Ross Benes, a senior TV and streaming analyst at eMarketer, it is likely that Paramount's assets will be divided up because Skydance probably won't want to keep everything that Paramount currently owns.
Former NBC Universal C.E.O and the incoming president of the newly merged company, Jeff Shell mentioned that Skydance has identified $2 billion in cuts, which will be implemented quickly and will involve reducing Paramount’s linear media operations. Shell pointed out the need to make tough decisions and said that certain parts of the Paramount portfolio will be sold so that Skydance Media can focus on the streaming service Paramount+, which wants to reduce its significant quarterly losses. Benes explained that, while Paramount+ is popular with consumers, it is losing a lot of money. As a result, Skydance is expected to take steps to reduce these losses, possibly including layoffs.
Ellison emphasized the need for Paramount to adapt to a rapidly shifting market by highlighting the crucial interplay between art and technology and leveraging the wisdom of Steve Jobs. The merger aims to enhance Paramount+ with artificial intelligence and revolutionize advertising technology to provide marketers with valuable insights into audience reach. Consequently, Ellison's extensive tech expertise and successful collaboration with Oracle, showcasing a cloud-based animation studio and AI integration in interactive gaming, were pivotal factors in the decision to merge with Paramount.
Shell has praised Ellison's distinctive skill set, foreseeing his pivotal role in defining the new Paramount's identity.
CEO of Skydance Media, David Ellison
