David Ellison Snaps Up Redstone’s Paramount-Controlled Powerhouse – You Won’t Believe It!

David Ellison, a notable figure in the tech world, is on the verge of acquiring National Amusements Inc., the Redstone family’s holding company. This acquisition would grant his company, Skydance Media, control over Paramount Global, as confirmed by three anonymous sources who are privy to the situation.

This preliminary agreement, which was inked on Tuesday, marks yet another surprising turn of events by Shari Redstone, the media tycoon who controls National Amusements and its 77% voting shares in Paramount Global.

Redstone has always admired Ellison’s aspirations and accomplishments as a Hollywood producer, but she surprisingly withdrew a potential two-stage deal for National Amusements and Paramount led by Ellison last month due to last-minute disagreements.

Despite this setback, Ellison and his team continued to negotiate an agreement, making significant strides in his months-long pursuit to take over Paramount. This deal is anticipated to herald a new era for the struggling media company and its parent, one of Hollywood’s oldest movie studios, which have been grappling with the transition to streaming and competition from financially robust rivals.

The deal, which is yet to be given the green light by Paramount’s independent board members, would put Ellison, the son of Oracle Corp. co-founder and billionaire Larry Ellison, in charge of a media conglomerate that includes Paramount Pictures, CBS broadcast network, and cable channels like MTV, Comedy Central, and Nickelodeon.

The rapid transformations in the industry have, in many ways, led Redstone to part ways with her treasured family legacy, handed down from her late father, Sumner Redstone. According to insiders, it was a hard decision for her, given her family’s long-standing pride in owning Paramount, formerly known as Viacom.

Previously, Skydance and its financiers had intended to pay over $2 billion for National Amusements. After settling the company’s debts, the Redstone family would have netted approximately $1.7 billion.

The revised deal sweetens the pot with an additional $50 million for the Redstone family, bringing the total to roughly $1.75 billion for their Massachusetts-based holding company. Besides the family’s Paramount shares, National Amusements also encompasses a regional movie theater chain established during the Great Depression.

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To make the deal more appealing to Redstone, Skydance, RedBird Capital Partners, and private equity firm KKR agreed to more robust provisions to protect the family from potential shareholder lawsuits.

The Wall Street Journal was the first to report the agreement.

Skydance and its financial associates will contribute a $1.5-billion cash infusion to assist Paramount in reducing its debt. The deal also reserves over $4 billion to purchase shares from Paramount investors looking for an exit.

During the recent negotiations, Redstone withdrew a proposal that would have allowed non-voting class shareholders to vote on the matter. This extra step, which was not mandatory since Redstone controls the voting shares, was a sticking point for Ellison, RedBird, and KKR.

The preliminary agreement also provides a 45-day window for other interested parties to make bids for Paramount.

The proposed handover signifies the conclusion of the Redstone family’s nearly four-decade reign as one of America’s most renowned and contentious media dynasties. At its peak, Sumner Redstone’s National Amusements was valued at nearly $10 billion. However, the pandemic-induced theater shutdowns, last year’s Hollywood labor strikes, and a significant debt load have taken a toll on its fortunes.

The deal is now awaiting approval from a special committee of Paramount’s board. The committee received the terms of the National Amusements-Skydance deal around 5 p.m. Eastern on Tuesday. The voting date for the latest proposal by the board members remains unclear.

The independent board members of Paramount had provisionally approved the Paramount portion of the deal in late May after months of negotiations. Roughly a week later, that deal was cancelled by Redstone. National Amusements expressed optimism about the trio of division heads tasked with running the company as its “Office of the CEO” at the time. Last week, this trio held a town hall meeting with Paramount employees to share their future plan, which includes $500 million in cost-cutting measures, including layoffs.

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Paramount is home to some of the most iconic brands in entertainment, including the 112-year-old Paramount Pictures movie studio, known for producing milestone films such as “The Godfather” and “Chinatown.” The company also owns the CBS television network and stations such as KCAL-TV (Channel 9) and KCBS-TV (Channel 2). However, its once-thriving cable channels like Nickelodeon, TV Land, BET, MTV, and Comedy Central have been losing ground in terms of viewership.

In May, Paramount’s independent board committee agreed to consider a competing $26-billion bid from Sony Pictures Entertainment and Apollo Global Management. The offer, which would have bought out all shareholders and paid off Paramount’s debt, initially received a warm reception from many investors.

That bid, however, lost momentum as Sony executives grew increasingly skeptical about acquiring a company that relies on declining traditional TV channels.

In recent months, other potential buyers for National Amusements emerged, complicating the decision for Redstone, who has managed the family’s empire since her father’s health started deteriorating eight years ago. Sumner Redstone passed away in 2020. The other bidders had proposed paying the family more than what was included in the Skydance proposal.

The list of potential buyers includes former top Seagram and Warner Music executive Edgar Bronfman Jr., Hollywood producer Steven Paul, and Barry Diller, who famously lost a bidding war for Paramount to Sumner Redstone in 1994.

Many in Hollywood, including film producers, writers, and agents, are backing the Skydance takeover, believing it offers the best chance to maintain Paramount as an independent company. Apollo and Sony were expected to dismantle the enterprise, with Sony integrating the movie studio into its Culver City operation.

Shari Redstone has always favored the deal offered by Ellison, hoping to keep the media empire intact.

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Ellison first broached the subject of a deal with Redstone last summer, and the talks became public in December. His interest in the deal was piqued, in part, by his past collaborations with Paramount Pictures and the prospect of merging their intellectual properties, as well as the prestige of owning a historic studio.

Besides classic films like “The Godfather” and “Ferris Bueller’s Day Off,” Paramount’s illustrious history includes popular franchises such as “Transformers,” “Star Trek,” “South Park,” and “Paw Patrol.”

Larry Ellison, David’s father, is expected to financially contribute to the deal.

Once the deal is finalized, Ellison plans for Paramount to acquire his Santa Monica-based Skydance Media, which encompasses sports, animation, gaming, television, and film production.

Ellison is anticipated to assume the role of Paramount’s chief executive.

The transition to Skydance would necessitate regulatory approval.

Paramount’s stock surged 7% to $11.47 per share in after-hours trading.

Paramount Global has not yet issued a formal response.

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