Tuesday, July 9, 2024

Jeff Shell To Be President At the New Paramount

Paramount Global agreed to merge with Skydance Media in a deal that hands control of the storied Hollywood studio to producer David Ellison, ending one of the industry’s most dramatic acquisitions.

As part of the complicated deal that was months in the making, Paramount Chair Shari Redstone agreed to sell her family’s National Amusements Inc., which controls about 77% of the voting stock in Paramount, for $2.4 billion, according to a statement from the company on Sunday.

Bloomberg reports the accord marks an abrupt turnaround after talks between Redstone and Ellison, the son of Oracle Corp. co-founder Larry Ellison, collapsed last month. Redstone’s decision at the time to end discussions shocked the board and frustrated employees and investors, sending the stock tumbling.

According to terms of the new deal, the Ellison familThe deal would allow non-Redstone voting shareholders to cash out for $23 a share or roll their shares into the new company. Non-voting shareholders would be able to receive $15 a share in cash or 1 share in the new company. Those terms represent a 48% premium for non-voting shareholders and a 28% premium for voting shareholders compared with Paramount’s share price as of July 1.

After the deal closes, which is expected in the first half of 2025, the Ellison-led group will own about 70% of Paramount’s shares outstanding. The sellers have 45 days to seek better offers. The Skydance deal includes a $400 million breakup fee if it falls apart.

Jeff Shell
New owners and additional capital could provide a fresh start to beleaguered Paramount, the parent of CBS and MTV. Laden with more than $14 billion in debt, the iconic Hollywood company has struggled to compete in streaming and has suffered as cable TV audiences canceled their subscriptions and abandoned traditional channels like CBS and Nickelodeon. The company had a net loss of $554 million, or 87 cents a share, in the first quarter.

Ellison, 41, will be chairman and chief executive officer. Jeff Shell, a former NBCUniversal executive, will be president. Ellison, who was raised around Silicon Valley luminaries like Steve Jobs, believes the company could thrive if it invests more in technology. Skydance will use artificial intelligence to “turbocharge content creation capabilities that improve overall productivity and lower costs,” the company said.

Ellison has been pursuing Paramount for months, sensing a rare opportunity to own one of Hollywood’s most iconic studios. Ellison said that Paramount, as a legacy media company, “needs to double down on storytelling, but it really needs to make the transition to being tech-hybrid as a company.” On a conference call with analysts, Ellison noted that big tech companies have been aggressively moving into the media space and that for Paramount to be successful, it needs to move toward being a tech company. “Bringing together tech and media, that’s what’s essential to chart a course forward in this environment,” he said.

Paramount, which was purchased by Shari Redstone’s late father Sumner in 1994, has been up for sale since late last year. National Amusements has held talks with various suitors, including Sony Group Corp. and Apollo Global Management Inc., which proposed a $26 billion deal. But that offer, which would have involved a foreign owner and the consolidation potentially of two large Hollywood studios, was seen as problematic and likely to face tough regulatory scrutiny.

No comments:

Post a Comment