David Ellison's company, Skydance Media, and its financial partners are currently considering a move to purchase all of Paramount Global. This development comes on the heels of a preliminary bid made by Ellison to acquire National Amusements Inc., the holding company for the Redstone family. If successful, Ellison will gain control of Paramount Global.
The changing media landscape, with its shift from traditional television to streaming platforms, is a significant reason why Redstone is considering the sale. Although Paramount Global has been profitable for years, it lags behind competitors such as Netflix, YouTube, Apple, and Amazon, who have more substantial financial resources for sports and entertainment content.
The possibility of a deal is heightened due to the financial stress experienced by Paramount, which is due to losses from streaming, the steady decline of linear television, and a weak advertising market. The company is also considering significant job cuts.
Apart from the acquisition, Ellison has considered merging Skydance Media with Paramount once he secures control. It is important to note that Skydance is not interested in acquiring only National Amusements without Paramount as well. Another option under consideration involves Ellison and his partners privatizing all of Paramount Global. Although this move would drastically shift the economics of the deal due to Paramount's current net debt of $15 billion.
At present, both sides have hired advisors, are sharing financial details, and Ellison generates financial support from Skydance's investors, including his father Larry, in addition to private equity firms RedBird Capital Partners and KKR & Co. However, a final decision on whether to proceed with the deal or not is yet to be made.
