Shari Redstone is one step closer to selling her media empire.
Paramount, home to one of Hollywood’s top movie studios as well as CBS and cable networks like Nickelodeon, is discussing entering into exclusive talks with media company Skydance for a potential deal , according to four people with knowledge of the discussions. The move to exclusive talks would be a significant step forward in a process that has been shrouded in uncertainty for months.
Whether the two sides agree to exclusivity remains to be seen, especially with other investors still chasing Paramount. Apollo Global Management, an investment firm with more than $500 billion under management, has submitted an $11 billion offer to acquire the Paramount movie studio. However, Paramount’s board of directors is seeking a deal for the entire company — including its cable channels and CBS — rather than pieces.
Apollo continues to evaluate what proposal might be most appealing 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, Paramount’s controlling shareholder, began negotiating with Skydance to sell his stake in the company last year. He controls Paramount through National Amusements, a holding company that owns his voting stock in Paramount. Ms. Redstone has held off on a sale for years, predicting that the company’s fortunes would rise as its main streaming service, Paramount+, gained momentum.
The terms of the deal being discussed involved the purchase of Skydance by National Amusements and a merger with Paramount. That deal is contingent on approval from Paramount’s board, which has been weighing its options with the help of advisers for weeks.
Late last month, David Ellison, the tech scion who founded Skydance, met with Paramount’s board committee to discuss his vision for a deal, according to two of the people familiar with the talks. Founded in 2010, Skydance is known for shepherding blockbusters for Paramount, including films in the “Mission: Impossible” and “Top Gun” franchises.
Representatives for Paramount and Skydance declined to comment, and the financial terms of the deal could not be learned.
Paramount’s stock has fallen 18 percent since the start of the year amid headwinds for the media industry. The company trades at a steep 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 a “precipitous decline” in its traditional television business and continued uncertainty over its push into streaming. Some analysts said the rating action could make Paramount easier to acquire, as it could circumvent a provision that would require a buyer to immediately pay off the company’s debt.
