Paramount's final fate starts to take shape

Paramount Global has reportedly entered exclusive merger talks with Skydance, putting a 30-day pause on talks with other potential suitors, including Apollo Global, which put in a $26 billion all-cash bid for the media giant.

Jeff Baumgartner, Senior Editor

April 4, 2024

2 Min Read
Paramount Studios in Hollywood, California
(Source: Graham Jepson/Alamy Stock Photo)

The circus surrounding Paramount Global has begun to calm down a smidge amid multiple reports Wednesday (April 3) that the media giant has entered exclusive merger talks with Skydance, David Ellison's production company.

That tentative agreement means that Paramount will not engage with other possible suitors for 30 days, The Wall Street Journal reported. That also means that Paramount favors a combination with Skydance over a recent $26 billion all-cash offer from Apollo Global Management. Byron Allen's Allen Media Group has also taken a run at Paramount, hoping to retain Paramount's TV networks (including MTV and Nickelodeon) and the Paramount+ streaming service, and sell off the Paramount studio.

Speaking on CNBC, LightShed Partners analyst Rich Greenfield said some investors are baffled that Paramount would say no to Apollo's all-cash bid and pursue an alternative deal with Skydance.

"Something doesn't add up. It just doesn't make sense to me or any of the investors I'm talking to," Greenfield said.

Paramount's directors leaned toward Skydance because of concerns about how Apollo would finance its bid, the WSJ said, citing people familiar with the company. The paper said Larry Ellison, co-founder of Oracle and father of Skydance's David Ellison, is expected to help fund the deal.

Skydance has previously held talks with Paramount Global's controlling shareholder, Shari Redstone, about acquiring National Amusements, a company that owns nearly 80% of Paramount's voting shares.

The WSJ noted that combining Paramount Global and Skydance will require a second deal that will need the green light from an independent committee of directors at Paramount.

Looming Charter renewal

The Paramount-Skydance connection comes together as Paramount Global, like many of its peers, focuses on turning streaming into a profitable business.

Paramount's talks with Skydance are also moving ahead as Paramount works on a new distribution deal with Charter Communications.

It's possible that Charter will seek to strike a deal similar to the one it forged with Disney last fall that could see the cable operator attempt to drop some "long tail cable networks" in Paramount's stable and bundle in Paramount+ at a discounted wholesale price, MoffettNathanson analyst Michael Nathanson speculated in a research note (registration required).

"One thing that is clear from yesterday – Paramount has real offers on the table that will continue to be evaluated in the weeks ahead," Nathanson noted.

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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