Paramount and Skydance Media have agreed to a transaction to create a combined company worth about $28 billion, adding to a string of high-profile mergers in the entertainment industry.
The combined company was referred to as “New Paramount” in a news release from Skydance, which was founded by Larry Ellison’s son David Ellison in 2010. Shari Redstone’s National Amusements owns the vast majority of voting shares of Paramount and agreed to the terms of the deal.
“Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king,” Redstone said in a statement. “Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment.”
The merger was framed as a way to preserve Paramount’s century-old legacy in Hollywood and CBS’s place in the entertainment world.
“It also preserves American jobs, fosters continued innovation and secures a prosperous future for the creative community at Paramount, while protecting the legacy that viewers across the globe know and love,” a press released added.
The merger includes a 45-day period in which Paramount’s board is allowed to search for a better deal.
The deal also cements David Ellison as a key player in the entertainment industry. If regulators approve the massive deal, he is set to become chairman and CEO of New Paramount.
Paramount has struggled in recent years as the traditional cable model of watching TV and movies has fallen in stature in response to a raft of new streaming services, such as Netflix, Hulu, and Max. Paramount launched its own such platform in 2021, Paramount+, but has nevertheless struggled.
Paramount’s stock is down nearly 30% from a year ago and has declined a precipitous 78% over the past five years amid the streaming wars.
The 41-year-old David Ellison described the planned merger as coming at a “defining and transformative time” for the industry.
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“I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount,” he said.
“We are committed to energizing the business and bolstering Paramount with contemporary technology, new leadership, and a creative discipline that aims to enrich generations to come,” Ellison added.
