Shari Redstone is one step closer to selling her media empire.
Paramount, home to one of Hollywood’s most historic movie studios as well as CBS and cable networks such as Nickelodeon, is discussing opening exclusive talks with media company Skydance about a potential deal, according to four people familiar with the discussions. Moving to exclusive talks would be a major step forward in a process that has been shrouded in uncertainty for months.
Whether the two sides will agree to exclusivity remains to be seen, especially with other investors still pursuing Paramount. Apollo Global Management, an investment firm with more than $500 billion under management, has made an $11 billion bid to acquire movie studio Paramount. Paramount’s board, however, is seeking a deal for the entire company — including cable channels and CBS — rather than pieces.
Apollo is still evaluating which proposal might appeal most to the company’s board, two people familiar with the situation said. Byron Allen, whose Entertainment Studios owns the Weather Channel, has also expressed interest in acquiring Paramount.
Ms. Redstone, the Paramount shareholder, began negotiations with Skydance to sell her stake in the company last year. It controls Paramount through National Amusements, a holding company that owns its voting stock in Paramount. Ms. Redstone has delayed a sale for years, betting that the company’s fortunes would improve as its flagship streaming service, Paramount+, gained momentum.
Terms of the deal being discussed would include Skydance buying National Amusements and merging with Paramount. That deal is subject to approval by Paramount’s board, which has been weighing its options with the help of advisers for weeks.
Late last month, David Ellison, the technical adviser who founded Skydance, met with a committee of Paramount’s board to discuss his vision for a deal, according to two people familiar with the talks. Founded in 2010, Skydance is best known for producing blockbusters for Paramount, including films in the “Mission: Impossible” and “Top Gun” franchises.
Representatives for Paramount and Skydance declined to comment, and financial terms of the deal could not be learned.
Paramount’s stock has fallen 18% since the start of the year amid headwinds for the media industry. The company trades at a deep discount to the combined value of Viacom and CBS, which merged to form Paramount in 2019. Paramount+ is still losing money, but its losses have slowed and it continues to add subscribers.
Ratings agency S&P Global downgraded Paramount’s debt to junk last week, citing “accelerating declines” in its traditional TV business and continued uncertainty in its push into streaming. Some analysts said the rating action could make the acquisition of Paramount easier because it could bypass a provision that would have required the buyer to immediately pay the company’s debt.
