Skydance-Paramount deal won’t be happening

The Paramount-Skydance deal is now officially, finally dead. 

National Amusements, the company that owns the controlling stake in Paramount Global and Shari Redstone, whose family owns NAI, have announced the parties “have not been able to reach mutually acceptable terms regarding the potential transaction with Skydance Media for the acquisition of a controlling stake in NAI.”

Skydance Media, owned by Oracle co-founder Larry Ellison’s son David Ellison, first held merger talks starting in the beginning of 2024.

An initial offer sparked concern that it would more strongly benefit Redstone and top investors rather than those holding common shares, so Skydance and partner RedBird Capital came back to the table with an updated bid.

The complex deal involved Skydance buying a controlling stake in shares of Paramount, including Class B shares. This would allow investors holding those shares to hopefully realize a premium on the stock value.

Paramount would then turn around and buy Skydance using stock, potentially valued as high as $5 billion. Ellison was slated to run the combined company.

In between there, Paramount also fielded an offer for from Sony Pictures–Apollo Global Management for $26 billion. Paramount also lost CEO Bob Bakish amid the M&A efforts — he’s since been replaced by a trio of co-CEOs.

Simply put, it’s been a bumpy ride for Paramount that meant it lost its main leader, will pay out of a reported $50 million severance to him and saw its stock price fluctuate up and down as news of the on-and-off-again courtship with Skydance shifted. It’s also likely racked up a hefty legal bill.

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It’s not clear if Sony might continue talks, though some reports indicated hesitancy to sell to Sony, who had indicated it would break up Paramount’s assets after the sale. Apollo’s involvement in the offer was also reportedly a sticking point because of its use of venture capital and heavy cost cutting.

Paramount also held very early talks with Warner Bros. Discovery but those broke down. Allen Media Group also made a $30 billion offer, though it did not outline how it might finance such a deal. AMG has made other large offers for other media brands that never came to fruition. 

For now, it appears Paramount will move forward with its three-person leadership structure known as “The Office of the CEO” while continuing to pursue savings on its own. Other possibilities include a potential streaming joint venture.

Paramount continues to carry a significant amount of debt, estimated at around $15.8 billion. It also came under fire for spending heavily on streamer Paramount+. Any cost savings realized could help go toward paying down debt.

In its announcement, Paramount also mentioned that it will continue to partner with Skydance on projects as it has done in the past, such as with the “Mission: Impossible” franchise, which its studio division distributes.