Entertainment giant Paramount Global announced its long-anticipated merger with Skydance Media on Monday, ending months of back-and-forth negotiations and transferring control of Hollywood’s oldest studio from the Redstone family to film industry up-and-comer David Ellison.

Under the complicated merger agreement finalized by all parties late on Sunday, Paramount Chair Shari Redstone will sell her family’s National Amusements Inc., which controls 77 percent of Paramount’s voting stock, to Skydance for $2.4 billion.

(Photo by Evan Agostini/Invision/AP, File)
(Photo by Evan Agostini/Invision/AP, File)

Redstone, daughter of late media mogul Sumner Redstone, who ran Viacom, CBS, and Paramount for decades, had turned down a similar arrangement with Skydance just weeks earlier, abruptly ending talks in a decision that frustrated investors and sent Paramount stock tumbling. The terms of the new deal do not seem to have changed much in the intervening time.

“Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king,” said Redstone.

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“We are pleased to have reached an agreement that we believe delivers to Paramount stockholders both immediate value and future upside opportunity,” said Paramount board member Charles E. Phillips Jr. in a statement. “Following extensive negotiations with Skydance, we believe this proposed transaction will position Paramount for success in a rapidly evolving industry landscape.”

The joint venture between the two companies, referred to as “New Paramount,” is valued at $28 billion, presenting a lucrative opportunity for both parties.

In recent years, Paramount has struggled to remain competitive as the film industry moves towards streaming. It is grappling with $14.6 billion in long-term debt, and the company’s market value has dropped by more than 50 percent since 2019 despite the blockbuster success of movies like 2022’s “Top Gun: Maverick.”

(Photo by Evan Agostini/Invision/AP)
(Photo by Evan Agostini/Invision/AP)

Meanwhile, Skydance, founded by David Ellison, son of Oracle Corp. co-founder Larry Ellison, has been on the upswing thanks to its partnerships with other studios, including Paramount. The company had a hand in several hits, including the aforementioned “Top Gun,” as well as several installments in the “Mission: Impossible” franchise.

If the merger agreement receives regulatory approval, Ellison will be named chairman and CEO of New Paramount, and he has already pledged to help the company transition to a “tech hybrid” to adapt to the modern media landscape. This will include revamping the Paramount+ streaming service, embracing cloud-based production, and capitalizing on generative AI.

“This is a defining and transformative time for our industry, and the storytellers, content creators, and financial stakeholders who are invested in the Paramount legacy and the longevity of the entertainment economy,” said Ellison. The new owners “are committed to energizing the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come.”

Connor Walcott is a staff writer for Valuetainment.com. Follow Connor on X and look for him on VT’s “The Unusual Suspects.”

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