Paramount is finally welcoming their new Skydance overlords

Power continues to consolidate and change hands over in ol’ Tinseltown. Paramount Global and Skydance Media have agreed to a merger. Skydance, the production company behind Star Trek Into Darkness, Top Gun: Maverick, and the later Mission: Impossible movies, has had a deal to co-produce and co-finance films with Paramount since 2010, making the company a somewhat natural fit to take the reins.

Partnering with private equity firm RedBird Capital, Skydance solidified its bid on Sunday after months of negotiations. The path to this marriage, however, wasn’t always smooth. Shari Redstone, Paramount’s non-executive chair, reportedly ended talks with Skydance CEO David Ellison last month, and early versions of the deal supposedly benefitted her personally but not the rest of Paramount’s shareholders. The version of the deal that brought the two companies back to the table gives Redstone a $2.4 billion buyout and an increased share for common shareholders, according to Variety.

In a memo, Redstone said the company aimed to “fortify Paramount for the future” while also remaining true to her father’s vision that “content is king.” In his own statement (via Variety), Ellison said that it’s “a defining and transformative time for our industry and the storytellers, content creators and financial stakeholders” who are invested in both Paramount and the “entertainment economy as a whole.” Thanking Redstone and her family, he pledged Skydance’s commitment “to energizing the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come.”

This marks the end of an era for the storied but beleaguered media empire. Since the late 1980s, the company has been a subsidiary of National Amusements, a movie theater chain that owner Sumner Redstone transformed into a mass media holding company. Under his leadership, National Amusements acquired Paramount, Viacom, and CBS (eventually merging the latter two). Today, Paramount Global includes the film studio, CBS, Nickelodeon, and MTV, and the streaming service Paramount+. Shari Redstone succeeded her father in 2020, and over the last year, she’s been looking for a way to offload the company as Paramount struggled to gain a foothold in the streaming era, dealing with the same challenges facing the entire industry.

Before sealing the deal with Skydance, all sorts of possibilities emerged to right the ship over at Paramount. The company was rumored to be in talks for a joint streaming venture with Comcast (which owns Peacock) and Warner Bros. Discovery (with Max). At one point, WBD CEO David Zaslav was reportedly interested in merging Warner and Paramount. Sony also entered the fray with a potential bid in partnership with private equity firm Apollo Global Management, and Byron Allen of Allen Media Group reportedly entered a bid, too.

Currently, Paramount Global has a trio of co-CEOS (George Cheeks, Chris McCarthy, and Brian Robbins), who say they’ll continue with their restructuring plan to reduce debt and increase profitability, which of course includes layoffs. Former NBCUniversal CEO Jeff Shell, who was fired from the Comcast company after an investigation corroborated allegations of sexual harassment against him, has been named by Skydance as the future president of Paramount. He’s said that the new company will cut around $2 billion in costs with the merger. (You can bet that plan will also likely include layoffs.) Per Variety, the “New Paramount” is looking towards possibly selling off “certain non-strategic assets” and continuing to explore a potential partnership for its streaming service.

The Paramount-Skydance deal is expected to close in 2025 if the two companies get regulatory approval. However, the deal also includes a 45-day window for shareholders “to actively solicit and evaluate alternative acquisition proposals.” That means there’s still time for a better offer to come out of the woodwork, so Skydance’s victory is not totally assured. Whatever the case, though, a new era for Paramount has officially begun.