Shari Redstone has taken a major step in her quest to sell her troubled Paramount Global media empire, agreeing to enter an exclusive M&A negotiating window with David Ellison and his Skydance Media.
Citing numerous unnamed sources, The New York Times reported Tuesday that Redstone's National Amusements, Paramount's parent company, was prepared to enter exclusive talks with Skydance, and The Wall Street Journal reported Wednesday that the decision had been made to make it happen.
Neither Paramount or Skydance has officially confirmed the talks yet.
Paramount is pausing discussion with other potential suitors, including private equity firm Apollo Global Management, which rendered an $11 billion bid for the studios portion of the conglomerate's business last month. Media mogul Byron Allen also made a $30 billion cash-and-debt offer in January for all of Paramount Global's businesses.
Redstone owns 77% of National Amusements, which controls Paramount, home of the CBS Television Network; cable channels, including Nickelodeon; a major Hollywood film studio; and the Paramount Plus subscription streaming platform.
With the linear assets fading fast, Redstone and National Amusements have hoped that Paramount Plus, which touts around 70 million subscribers, might rekindle Paramount Global's growth. Paramount's stock is down more than 18% from the start of 2024.
Losses from direct-to-consumer streaming have narrowed for Paramount of late, with fourth quarter “operating income before depreciation and amortization” (OIBDA) coming in at a $490 million loss versus $575 million in red ink a year earlier.
But Paramount Plus’s arrival as a money-making engine still isn’t close at hand. “DTC losses are abating, but even if one squints real hard, it is difficult to see a path towards long-term streaming success for Paramount Plus,” MoffettNathanson analyst Robert Fishman recently wrote.
Ellison and Skydance have been key production partners for Paramount for years, shepherding big feature-film projects through Paramount Pictures including those from the Mission Impossible and Top Gun franchises.
It was reported in January that Redstone and Ellison had already explored a possible deal. And last month, Ellison appeared before the Paramount board of directors, pitching his vision for the tie-up.
