Hollywood’s Largest Deal of the Year Has Finally Landed On the Big Screen: Paramount Is Merging with David Ellison’s Skydance - The Average Joe

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    Hollywood’s Largest Deal of the Year Has Finally Landed On the Big Screen: Paramount Is Merging with David Ellison’s Skydance

    Noah Weidner

    July 8, 2024

    No, that wasn’t the latest “Succession” season you were watching over the past six months — it was the Paramount ($PARA) deal drama, and it has (finally) come to an end. The entertainment giant has spent most of 2024 sifting through offers, redlining term sheets, and negotiating its future. This weekend, it finally signed on the dotted line.

    Done deal: Movie and TV giant Paramount has agreed to merge with David Ellison’s Skydance Entertainment, marking the end of an era for the 112-year-old family-owned company and one of Wall Street’s worst-performing stocks. The $8B deal will take the company private under new management and private equity suitors, just weeks after a tentative agreement was called off by the company’s largest shareholder. But a little money and a few contract changes made it happen.

    • Over the last five years, $PARA has fallen 78% due to massive losses, prompting the family ownership to consider selling the business.
    • It was a hot commodity, attracting competitive offers like a $26B bid from Sony and Apollo and a $14.3B offer from media entrepreneur Byron Allen.

    Of Paramount Importance

    Assuming no surprises, the deal is expected to close in 2025. Skydance’s David Ellison is anticipated to become the company’s CEO, and former NBCUniversal CEO Jeff Shell will serve as President. With their media and tech experience, analysts are optimistic about the company’s future under new leadership.

    • Ellison and Shell say that the newly organized Paramount will be able to “double down on core competency” of film and TV while embracing technology and new resources.
    • After losing $563M in the first quarter of 2024, the revamped Paramount aims to cut more than $2B in costs — with over 50% of efficiencies expected in the first year.

    Streaming struggles: Paramount might soon have new leadership, but it’ll still face old problems, especially with its streaming platform, Paramount+. Despite boasting over 70M subscribers, the platform has been one of the company’s biggest losers. This has pushed the company to raise the price of its streaming service by $1 to $2 per month. However, charging more is a band-aid solution for bigger problems, including the future of its linear TV business, film business, and 22K employees.

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