Skydance’s deal to buy National Amusements, which owns 77 percent of the voting stock in Paramount, also allows a 45-day “go-shop” period in which Paramount can seek a better offer.
Even with an agreement reached between Skydance and Paramount negotiators, much remains unresolved, according to Jamie Lumley, a media analyst for Third Bridge Group. The previous attempt at a Skydance deal collapsed just weeks ago, Lumley noted.
“The renewed hope that the two sides will be able to reach an agreement on the line is tempered by the concerns that we’ve had here before,” Lumley said Wednesday in emailed comments to the Washington Post.
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If the deal is finalized, it would signal a new era for Paramount, which has faced significant challenges as it adapts to the hypercompetitive entertainment landscape and resolve some uncertainty about media legacy the future. Media observers have been stunned by the uneasy negotiations, which have dragged on for months.
Paramount declined to comment. Representatives for Skydance could not immediately be reached.
The proposed acquisition reflects Skydance’s growth ambitions and Paramount’s efforts to address $14.6 billion in long-term debt and take on rivals Netflix and Disney. National Amusements is led by Shari Redstone, daughter of media mogul Sumner Redstone, who died in 2020.
Paramount has been hemorrhaging money in its bid to capture a corner of the streaming market, but the company has said it expects Paramount Plus to turn a profit in the US next year. The owner of CBS, Showtime, Black Entertainment Television, Nickelodeon and MTV has seen his market value has fallen by more than half since 2019.
Shares of Paramount rose more than 6 percent on Wednesday in the afternoon.
In April, amid a takeover battle, Paramount ousted CEO Bob Bakish and replaced him with an “Office of the CEO” made up of three executives who run some of the company’s key assets: CBS CEO George Cheeks; MTV, Showtime and Paramount Media Networks CEO Chris McCarthy; and Nickelodeon and Paramount Pictures CEO Brian Robbins. They have been tasked with cutting Paramount’s costs as the company tries to cut its debt.
Santa Monica, California-based Skydance was founded in 2010 by David Ellison, son of billionaire Oracle co-founder Larry Ellison. He quickly established himself in Hollywood, helping to produce such blockbusters as “Mission: Impossible – Ghost Protocol” (2011), the action thriller “Jack Reacher” (2012) – both starring Tom Cruise – and “World War Z ” (2013), starring Brad Pitt.
Recently, the company has ventured into animation and sports content.
The tentative deal comes less than a month after the two sides announced they had ended talks about a potential merger, according to the Associated Press.
Other big names in entertainment have reportedly sniffed around National Amusements in recent months and could throw a wrench into the deal during the go-shop period, including Barry Diller, the media mogul who tried unsuccessfully to bought the studio in the 1990s. Diller’s digital media conglomerate, IAC, has signed nondisclosure agreements with National Amusements, the New York Times reported this week, a prelude to the deals.
The Wall Street Journal first reported news of a Skydance deal on Tuesday.