Skydance Media, led by David Ellison, is in talks about a potential deal to acquire Paramount Global, as per sources familiar with the matter. The discussions involve taking private all of Paramount and merging Skydance with the media company. This acquisition move is under the scrutiny of RedBird Capital Partners and KKR & Co., which are providing support for the potential merger with National Amusements, a company controlled by Shari Redstone.
The Shift in the Media Landscape
Redstone, considering the evolving media landscape that leans towards streaming over traditional TV, is contemplating the sale as industry giants like Netflix, YouTube, Apple, Amazon, and others command the space with substantial financial prowess to invest in sports and entertainment content, an advantage that Paramount Global seeks to compete effectively.
Although Paramount Global stands as a profitable entity historically, its size in comparison to the dominating streaming platforms has prompted a need for strategic shifts. As conversations about the potential acquisition unfold, it remains uncertain if Redstone will weigh in on different premiums for selling National Amusements, relative to the remaining shareholders of Paramount Global.
Financing and Considerations
To execute the acquisition, Skydance would require additional capital, considering Paramount’s $8.2 billion market capitalization and approximately $15 billion of debt. While potential financing sources include Skydance’s private equity partners and billionaire Larry Ellison, the co-founder of Oracle and David Ellison’s father, it is crucial to note that Skydance has yet to reach out for external funding, as the final decision on the deal remains pending.
Complete Acquisition as the Preferred Option
It’s essential to mention that Skydance is focused on a complete acquisition of Paramount rather than a partial deal. From their perspective, solely acquiring National Amusements would not address Paramount’s challenges as a publicly traded company, particularly managing the Paramount+ streaming service and overseeing declining linear cable assets such as MTV, VH1, Comedy Central, and Nickelodeon.
Ruminations of Other Potential Suitors
While Skydance explores this potential acquisition, there have been preliminary discussions about Warner Bros. Discovery also expressing interest in acquiring Paramount Global. If Redstone opts to sell to Skydance, a significant motivation behind her decision is the concern that Warner Bros. Discovery might lean towards merging with Comcast’s NBCUniversal, as disclosed by sources familiar with the matter.
The Path Forward and Possible Outcomes
Acknowledging that no acquisition is a certainty and recognizing the possibility of the talks crumbling, it’s important to emphasize the ongoing shifts and considerations within the media industry that are influencing these discussions. The acquisition landscape is complex, and various factors will shape the path forward, ultimately influencing the outcomes for the parties involved.
The potential acquisition of Paramount Global by Skydance Media underpins the dynamic nature of the media industry and the strategic maneuvers undertaken by key players to position themselves advantageously in the shifting landscape. As discussions unfold and speculation surrounds the deal, the implications of the acquisition on the media landscape and the involved entities merit close observation.