Rumored Trump deal under scrutiny with Paramount's new leadership questioned
In a significant move, David Ellison's Skydance Corp has agreed to acquire Paramount Global in a deal worth $8 billion. The merged company, to be named Paramount, will trade under the PSKY ticker and aims to become a leading global streaming service.
The deal, scheduled to close on Aug. 7, will see Paramount Global's shareholders receive $4.5 billion. National Amusements Inc., owned by the Redstone family, will receive $2.4 billion as part of the Skydance buyout. After paying off debts, the Redstone family is expected to come away with about $1.75 billion.
The merged company will strive to transform Paramount into a tech-forward company that blends the creative heart of Hollywood with the innovative spirit of Silicon Valley. Ellison, the new chairman and CEO of Paramount, expressed his commitment to this vision.
Paramount+, despite having popular shows, has lagged in the streaming competition led by Netflix and Amazon Prime. Ellison aims to change this, promising to make Paramount+ a leading global streaming service.
The acquisition was approved by federal regulators three weeks after Paramount paid $16 million to settle a lawsuit. President Trump had expected $20 million in free advertising and programming as part of a settlement to end his lawsuit over CBS "60 Minutes" edits. However, it is important to clarify that this settlement was paid by Paramount Global, not Skydance Media. Ellison stated that Skydance was not involved "in any way."
The merger brings together Paramount Global's assets, including CBS, MTV, Comedy Central, and Paramount Pictures, with Skydance's production capabilities. RedBird founder Gerry Cardinale stated, "Our investment in Paramount and long-term partnership with the Ellison family reflects our deep conviction in the value of world-class intellectual property and the potential to unlock substantial growth."
The first question Ellison fielded from reporters during his news briefing was about the purported public service announcements (PSAs) for President Trump. Ellison neither confirmed nor denied any such deal, emphasizing that they would not politicize the matter. It remains unclear if Skydance will participate in such a deal.
Skydance and RedBird Capital Partners have agreed to inject $1.5 billion into Paramount's balance sheet to help pay down debt. The news of the acquisition has caused a slight dip in the shares of the new company, with shares falling nearly 1%, to $11.74.
[1] Source: Ellison's news briefing [2] Source: Paramount Global's official statement
- The merged company, named Paramount, aspires to become a leading global streaming service, aiming to blend the creative heart of Hollywood with the innovative spirit of Silicon Valley.
- After paying off debts, the Redstone family is expected to receive approximately $1.75 billion from the deal.
- The acquisition brings together Paramount Global's assets, such as CBS, MTV, Comedy Central, and Paramount Pictures, with Skydance's production capabilities.
- Despite Paramount+ having popular shows, it has lagged in the streaming competition led by Netflix and Amazon Prime. Ellison aims to change this, promising to make Paramount+ a leading global streaming service.
- The merger was approved by federal regulators three weeks after Paramount paid $16 million to settle a lawsuit. However, it is important to note that this settlement was paid by Paramount Global, not Skydance Media.
- Ellison has expressed his commitment to transforming Paramount into a tech-forward company, focusing on world-class intellectual property and unlocking substantial growth, as stated by RedBird's founder, Gerry Cardinale.
