Shari Redstone Rejects Skydance Deal for Paramount Global
No deal. Shari Redstone has rejected the latest offer for Paramount Global from the consortium led by Skydance and RedBird Capital, placing the future of the entertainment company into a fresh period of uncertainty, a source confirms to The Hollywood Reporter.
Redstone is now looking to sell holding company National Amusements, which controls Paramount, alone to another potential suitor, The Wall Street Journal reported on Tuesday. But the Skydance team has long been betting that other suitors will eventually drop out.
Skydance had secured approval from Paramount’s independent board committee, in a sweetened deal that would see Paramount’s non-voting shareholders have the option to cash out at $15 per share. It would also have seen Skydance acquire Redstone’s National Amusements for about $2 billion.
National Amusements is a regional movie theater chain, however Sumner Redstone turned it into a media behemoth by acquiring Viacom, Paramount and CBS. National Amusements only owns about 10 percent of Paramount’s equity, but it controls about 80 percent of its voting stock, giving it control of the entertainment firm.
Shari Redstone has run the company since her father’s death in 2020.
Paramount’s future has been the focus of intense speculation in recent months, with its streaming business still hemorrhaging cash, its linear TV business in continued decline, and with its credit rating on the ropes.
In addition to Skydance, Apollo and Sony have kicked the tires of the company, which ousted its CEO Bob Bakish in April, replacing him with a trio of executives in the “office of the CEO.”
Those three executives, Brian Robbins, George Cheeks and Chris McCarthy outlined their own “shared vision” for the company. That would include further cost cutting, the divestment of non-core assets (perhaps BET?) and seeking potential partners in streaming.
National Amusements, too, has faced challenges. The company took a $125 million strategic investment in May from BDT & MSD Partners, with the proceeds paying down debt and paying back loans.
S&P Global downgraded Paramount’s debt to BB+ in March, which is considered “junk” status.
“We downgraded Paramount due to the degradation of credit metrics from the accelerating declines in linear media and the shift toward a more competitive and less certain streaming model,” S&P’s Naveen Sarma wrote.
He added in a note after Bakish departed that the “shared management structure is not sustainable for Paramount Global, or for any publicly traded company, outside of a short transitional period.”
With the Skydance deal dead, it seems increasingly likely that it will lean into its leadership, unless a better deal is able to cross the finish line.
Kim Masters contributed reporting.
