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Paramount Agrees to Merge with Skydance

Entertainment giant Paramount, known for iconic films like “Top Gun” and “The Godfather,” has decided to merge with Skydance. This deal values the new combined entity at around $28 billion. Shari Redstone, chair of Paramount Global, emphasized the merger’s importance by stating, “Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king.”

Shari Redstone’s National Amusements holds over three-quarters of Paramount’s Class A voting shares, a legacy left by her late father, Sumner Redstone. She has fiercely battled to retain control of the company. Skydance, based in Santa Monica, California, has been instrumental in producing some high-grossing Paramount hits, including “Top Gun: Maverick” and various “Mission Impossible” films featuring Tom Cruise.

Founded in 2010 by David Ellison, son of Oracle founder Larry Ellison, Skydance quickly formed a production partnership with Paramount. David Ellison is set to be the chairman and chief executive officer of the new entity, referred to as New Paramount. The agreement still awaits regulatory approval to proceed.

The merger comes during a challenging period for Paramount. In an annual shareholder meeting in early June, the company unveiled a restructuring plan that includes significant cost reductions. Earlier this year, Paramount also went through a leadership shakeup, highlighting the company’s struggles in an evolving media landscape. The decline of its traditional cable business has been particularly troubling for Paramount.

In an attempt to capture the growing streaming audience, Paramount launched Paramount+ in 2021. However, financial losses and rising debts have continued to plague the company. Sumner Redstone had originally used National Amusements, the family-owned movie theater chain, to create a sprawling media empire that included CBS and Viacom. Over the years, CBS and Viacom experienced multiple mergers and separations, the most recent being a re-merging in 2019. In 2022, ViacomCBS was rebranded as Paramount Global.

Under Sumner Redstone’s leadership, Viacom emerged as a media powerhouse, housing pay TV channels like MTV and Comedy Central and the movie studio Paramount Pictures. Although Skydance secured the deal, they were not the only interested party. In recent months, Apollo Global Management and Sony Pictures also made competing offers to merge with Paramount. Additionally, Warner Bros. Discovery explored a potential merger late last year, but reportedly halted those talks by February.

Source: Associated Press