Paramount, a prominent entertainment giant, has announced a merger with Skydance, signaling the end of the Redstone family’s longstanding reign in Hollywood. This strategic move will infuse much-needed capital into Paramount, which has been facing challenges adapting to the evolving entertainment landscape.Paramount, a prominent entertainment giant, has announced a merger with Skydance, signaling the end of the Redstone family’s longstanding reign in Hollywood. This strategic move will infuse much-needed capital into Paramount, which has been facing challenges adapting to the evolving entertainment landscape. The merger also signifies the rise of David Ellison, the founder of Skydance and the son of billionaire Larry Ellison, the founder of software giant Oracle. Shari Redstone’s National Amusements had previously held a majority stake in Paramount, but after initial resistance, she agreed to the deal with Skydance. The new combined company, valued at approximately $28 billion, will receive an investment of $8 billion from a consortium led by the Ellison family and RedBird Capital. Skydance, known for producing successful Paramount films like “Top Gun: Maverick” and “Mission Impossible” installments, will be integrated into the newly formed New Paramount, with David Ellison taking over as its chairman and CEO. Ellison outlined the vision for New Paramount, prioritizing core competencies and a “creative first” approach. He emphasized the need for the company to transition into a “tech hybrid” to remain competitive in the media industry, which has seen the rise of powerful technology companies entering the space. Plans are in place to revamp the Paramount+ streaming service, expanding the direct-to-consumer business, increasing engagement, and reducing churn. The company also aims to shift production to cloud-based platforms and incorporate generative artificial intelligence for efficiency. The merger comes at a critical time for Paramount, which has faced challenges in recent years, including declining cable business and restructuring plans. Paramount’s leadership has also undergone changes, with the replacement of CEO Bob Bakish. Paramount boasts a rich history dating back to 1914, having released iconic films such as “Sunset Boulevard,” “The Godfather,” and “Raiders of the Lost Ark.” Despite a decline in theatrical production, the wild success of “Top Gun: Maverick” in 2022 provided a significant boost to both theaters and the industry’s post-pandemic recovery. The merger between Paramount and Skydance has been a topic of interest within the industry, with multiple companies expressing interest in acquiring Paramount. Apollo Global Management and Sony Pictures were among the potential suitors. Warner Bros. Discovery also explored a possible merger, but those talks were eventually terminated. With this merger, Paramount aims to strengthen its position and adapt to the ever-changing entertainment landscape, leveraging Skydance’s expertise and the influx of capital to regain its competitive edge.
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Entertainment giant Paramount is merging with Skydance, ending the Redstone family’s decades-long Hollywood exploitation and injecting much-needed cash into a legacy studio struggling to adapt to a changing entertainment landscape.
It is also a sign of the rise of a new power: David Ellison, the founder of Skydance and son of billionaire Larry Ellison, the founder of the software company Oracle.
Shari Redstone’s National Amusements has owned more than three-quarters of Paramount’s Class A voting stock through the estate of her late father, Sumner Redstone. She had fought to retain control of the company that owns CBS, behind such blockbusters as “Top Gun” and “The Godfather.”
Just weeks after Redstone turned down a similar deal with Skydance, he agreed to a deal with very few changes in terms.
“Given the changing nature of the industry, we want to strengthen Paramount for the future while ensuring that content remains king,” said Redstone, chairman of Paramount Global.
The new combined company is valued at approximately $28 billion. In connection with the proposed transaction, which is expected to close in September 2025 pending regulatory approvals, a consortium led by the Ellison family and RedBird Capital will invest $8 billion.
Skydance, based in Santa Monica, California, has helped produce some of Paramount’s biggest hits in recent years, including Tom Cruise films like “Top Gun: Maverick” and episodes of the “Mission Impossible” series.
Skydance was founded in 2010 by David Ellison and quickly formed a production partnership with Paramount that same year. If the deal is approved, Ellison will become chairman and CEO of what is being called New Paramount.
Ellison outlined the vision for New Paramount during a conference call discussing the transaction on Monday. In addition to doubling down on core competencies, particularly with a “creative first” approach, he emphasized that the company must transition to a “tech hybrid” to remain competitive in today’s evolving media landscape.
“You’ve seen some incredibly powerful technology companies enter the … media space and do it very successfully,” Ellison said, adding that it was “essential” for New Paramount to chart a similar course going forward.
That includes plans to “rebuild” the Paramount+ streaming service, Ellison noted — pointing to broader goals to expand the direct-to-consumer business, such as increasing engagement time on the platform and reducing user churn. He also said the company is aiming to transition to more cloud-based production and use generative artificial intelligence to increase efficiency.
Executives also outlined further restructuring plans for New Paramount during Monday’s conference call, with RedBird Sports and Media Chairman Jeff Shell noting that they had identified approximately $2 billion in cost savings and synergies that they “will look to realize fairly quickly.”
Shell and others have addressed the slowing growth of linear TV. That will still be a big part of the company’s business, he said, but learning how to run that part of the business differently will be key.
The on-and-off merger comes at a tumultuous time for Paramount, which has struggled for years to find its feet and is bleeding its cable business. At an annual shareholders meeting in early June, the company also unveiled a restructuring plan that included major cost cuts.
Leadership at Paramount was also volatile earlier this year after CEO Bob Bakish, following a number of disputes with Redstone, was replaced by an “office of the CEO” run by three executives. Four of the company’s directors were also replaced.
Paramount is one of Hollywood’s oldest studios, founded in 1914 as a distributor. Throughout its storied history, Paramount has had a hand in releasing films — from “Sunset Boulevard” and “The Godfather,” to “Raiders of the Lost Ark” and “Titanic.”
The studio also distributed several early Marvel Cinematic Universe films, including “Iron Man” and “Thor,” prior to its acquisition by Disney. In addition to “Mission: Impossible” and “Top Gun,” Paramount’s current franchises include “Transformers,” “Star Trek” and “Jackass.”
While Paramount hasn’t topped the annual domestic box office charts in more than a decade, the wild box office success of “Top Gun: Maverick” in 2022 (nearly $1.5 billion worldwide) was a major boon for both theaters and the industry’s post-pandemic recovery.
Still, theatrical production has declined somewhat in recent years. Last year, it released just eight new films and ranked fifth in total box office with about $2 billion — behind Universal (24 films), Disney (17 films), Warner Bros. and Sony.
This year’s release calendar is similarly modest, especially with the absence of “Mission: Impossible 8,” which was delayed until 2025 due to strikes. They’ve had some success, with “Bob Marley: One Love” and “A Quiet Place: Day One,” and Ridley Scott’s “Gladiator” sequel is still on the way.
The National Association of Theatre Owners, a trade group representing more than 35,000 theaters in the U.S., said in a statement Monday that it plans to carefully review the details of the merger to determine whether there will be more or fewer theatrical performances.
“We are encouraged by the commitment that David Ellison and the Skydance Media team have shown to theatrical production in the past,” said Michael O’Leary, president and CEO of the National Association of Theatre Owners. “A merger that results in fewer films produced will not only hurt consumers and result in less revenue, but will also have a negative impact on people who work in all sectors of this great industry – creative, distribution and exhibition.”
Sumner Redstone leveraged his family’s movie theater chain, National Amusements, to build a vast media empire that included CBS and Viacom, which have merged and split several times over the years. The companies most recently rejoined in 2019, reversing a 2006 split. The company, ViacomCBS, changed its name to Paramount Global in 2022.
Under Sumner Redstone’s leadership, Viacom grew into one of the country’s largest media giants, including pay channels MTV and Comedy Central and film studio Paramount Pictures.
It’s a company with a rich history and a deep bank of media assets. Skydance wasn’t the only company to bid for Paramount in recent months. Apollo Global Management and Sony Pictures also made competing offers.
Late last year, Warner Bros. Discovery also made headlines by exploring a possible merger with Paramount. But in February, Warner reportedly called off those talks.
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AP film writer Lindsey Bahr contributed to this report.
