Shareholders Becoming More Vocal Over Skydance Deal

 As Paramount and Skydance edge closer toward a deal that would grant David Ellison’s media company control through Shari Redstone and National Amusements’ stake, shareholders are voicing concerns. 

They fear that this deal could diminish their ownership stakes and limit better alternatives for a sale1. The situation is complex, with Paramount’s special committee tasked with balancing competing interests among the different companies. 

While Shari Redstone, Paramount’s majority shareholder through her stake in National Amusements, seeks to maximize her own value, other shareholders advocate for fairness and a level playing field. Apollo Global Management’s competing bid is also in the mix, raising questions about whether it’s being unfairly overlooked.

David Katz, president and chief investment officer of Matrix Assets Advisers, which owns over 350,000 Paramount shares, expressed concern: “Shari Redstone is literally only looking out to maximize the value of Shari Redstone, which is terribly disconcerting.” 

Shareholders like Mario Gabelli (CEO of Gabelli Asset Management) and John W. Rodgers Jr. (from Ariel Investments) share similar worries1. Justin Evans of Blackwood Capital Management even wrote to the Paramount board, criticizing the impending deal and expressing concern about the company’s future1.

If Redstone proceeds with the Skydance deal against the special committee’s recommendation, shareholders might resort to legal action, which could be both “nasty and expensive” according to Stefano Bonini, an associate professor of finance at Stevens Institute of Technology. 

The special committee’s recommendation holds significant weight, making it challenging for the board or majority owner to overrule it without a compelling reason1. The committee includes Nicole Seligman, a prominent lawyer and former EVP and general counsel of Sony Corporation, and Dawn Ostroff, the former chief content officer of Spotify and a former president of Conde Nast Entertainment1. The stakes are high, and the outcome remains uncertain as the drama unfolds in the entertainment industry.