Paramount Global and Skydance Media have agreed to merge, opening a new chapter for one of Hollywood’s oldest studios, Reuters reported.

KEY FACTS

• Shari Redstone, Paramount’s non-executive chairman, will sell the family’s controlling stake in the company in a complex deal that will end in a merger.
• The deal marks the end of an era for Redstone, whose late father Sumner Redstone transformed the family’s chain of car dealerships into a media empire that includes Paramount Pictures, as well as the CBS network and cable networks Comedy Central, Nickelodeon and MTV.
• The merger will combine Paramount, home of classics such as Chinatown, The Godfather and Breakfast at Tiffany’s, with a financing partner on several major recent films, including Top Gun: Maverick, Mission: Impossible – Fallout and Falling into Darkness.
• The deal will elevate David Ellison, the 41-year-old scion of tech tycoons who founded Skydance, into Hollywood’s newest giant. He will inherit a media company that faces a host of challenges while managing an entertainment business upended by the video streaming revolution.

KEY STORY

Paramount has wiped nearly $17 billion off its value since the end of 2019 as its traditional TV business eroded faster than video streaming service Paramount+ could turn a profit.

There was tension between the directors. CEO Bob Bakish was ousted in April after clashing with controlling shareholder Sherry Redstone over the Skydance deal. He was replaced by three executives who hold the CEO position as a group, proposing $500 million in layoffs, selling off certain assets and exploring a possible joint venture partner with Paramount+.

TANGENT

The deal between Paramount and Skydance is the culmination of months of negotiations that appeared to have reached an impasse when Redstone abruptly ended negotiations on June 11.

At the time, Skydance and its partners had agreed to acquire the Redstone family’s holding company National Amusements, which owned 77% of Paramount’s voting stock. However, the talks reached an impasse on other issues, including National Amusements’ demand that the deal be approved by a majority of non-Redstone shareholders, a condition Skydance believed impossible.