As it appeared that the uncertainty surrounding the future of Paramount Global was clearing up, the company’s controlling shareholder Shari Redstone tossed another wrench into the works.
Skydance CEO David Ellison has been engaged in prolonged negotiations with Redstone to acquire the media empire, and last Sunday reports emerged that the two sides had finally reached a deal, with the approval of Paramount’s board of directors. However, Redstone may be having second thoughts about the sale and is said to be weighing other options.
Redstone’s wavering on the Skydance deal is upsetting to many in the industry, who feel that a Skydance-Paramount combination would result in the best outcome for the storied studio. Skydance has a history of partnering with Paramount and is said to be focused on keeping the company’s assets intact.
The most likely rival offer from Sony and private equity firm Apollo Management Group would result in the separation and sale of Paramount’s cable and streaming business, which account for more than one-half of the company’s overall assets. Redstone was originally reported to be in favor of the Skydance offer because Ellison intended to keep the company intact after the sale.
Redstone’s reception to Skydance’s latest offer has cooled based on a rebalancing of payouts to stakeholders, with the amount received by Paramount shareholders increasing at the expense of Redstone’s compensation. Skydance felt that it was necessary to make these adjustments after its initial offer was roundly criticized by shareholders, who threatened to file suit to block the proposal.
This latest development introduces an additional note of uncertainty into Paramount’s future. The company’s current leadership is signaling fundamental changes ahead, including $500 million in cost-cutting which may include dramatic changes in funding for its streaming platform Paramount+. Given this uncertainty, all parties may be well advised to consider the offer on the table from Skydance, which may well represent the best available path forward.