Paramount/Skydance Deal Runs Into New Snag, And Now Another Bidder Has Emerged – TrekMovie.com

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Paramount/Skydance Deal Runs Into New Snag, And Now Another Bidder Has Emerged – TrekMovie.com


After a long road, it seemed like this might be the week when a deal was going to be struck for the sale and merger of Paramount Global, who controls the Star Trek franchise. However, there is a sticking point with the deal with Skydance, and a new bidding group has emerged.

Awaiting Shari on Skydance

Even after the exclusive negotiation window ended with Skydance Media at the beginning of May, talks had continued with David Ellison’s company and RedBird Capital, the private equity firm backing the Skydance bid. Things were looking up after news broke over the weekend that the special committee of the Paramount Global board overseeing deals recommended the Skydance bid after the deal was revised, which included offering regular (class B) shareholders an option of a 26% premium on their shares. While some media outlets jumped the gun in announcing the deal was done, it was still pending the key final decision by Shari Redstone, chair of Paramount Global and owner of a majority of the controlling (class A) shares. However, the annual shareholder meeting on Tuesday had no announcement about a deal, and, more ominously, an employee town hall event for the same day was postponed due to the “ongoing speculation regarding potential M&A.” That event has been rescheduled for June 25, possibly indicating an expected time when things will become clearer.

Even though a deal with Skydance was always seen as the one Redstone most favored, there have been reports that she was “displeased” with the latest version of the deal, which also included a reduction in the bid for National Amusements, her holding company. Redstone is also reportedly particularly concerned over shareholder lawsuits that could hit her personally, as the complicated Skydance deal would see her benefit more than other shareholders. According to the reliable industry newsletter Puck (UPDATE: And now also Deadline) Redstone now wants a provision calling for approval of the deal from the majority the other holders of voting stock. Redstone holds around 77% of the Paramount Global class B shares. She feels this will protect her from litigation; after she pushed through the remerger of Viacom and CBS in 2019, the company ended up paying out over $290 million in shareholder lawsuit settlements. And according to Puck, this issue could be the “breaking point” for the Ellison/RedBird team, who are concerned this vote could kill the deal.

It’s possible this can be resolved either through Redstone dropping this last-minute ask, or with SkyDance/Redbird indemnifying her over litigation and/or finding a way to ensure the support of the other class A shareholders. They have spent a lot of time crafting what would be a very complicated multi-step deal, so it’s likely they will try to find a way. Before this new sticking point emerged, they were already reportedly laying out plans for how Paramount Global would be managed, with Ellison taking over Paramount Pictures (merged with Skydance), RedBird partner (and former NBCUniversal CEO) Jeff Shell taking over as CEO of Paramount Global, and his RedBird partner (and former CNN president) Jeff Zucker stepping in to head CBS. Those plans will now have to wait for Shari to make her decision.

Skydance’s David Ellison at the premiere of Star Trek Beyond in 2016

Another bidder

Adding to the complication, there is now reporting that a new bidder has been talking to Redstone. Producer Steven Paul (known for the Baby Geniuses franchise) has assembled a group of investors to buy out Redstone, offering more than Ellison. The group of deep-pocket backers includes John Paul DeJoria, the billionaire co-founder of Patrón tequila and Paul Mitchell hair care products. In addition to offering more than Ellison, this deal would also not involve a merger, avoiding regulatory issues. However, it’s unclear what plans this group has for Paramount Global.

A number of other interested parties, including Sony/Apollo, would see Paramount Global split up, potentially turning Paramount into just a brand while the assets, and even the real estate, would be sold off to the highest bidders. That Sony/Apollo deal is still under consideration with due diligence ongoing. One of the reported reasons Redstone had favored the Skydance deal is it would keep Paramount (and her family’s legacy) relatively intact.

Go it alone?

There is always the possibility that Redstone won’t find the deal she wants with any of the potential suitors, and will decide to continue going it alone. This would be a challenge for the company without the capital of its media rivals and the burden of a large amount of debt. For their part, at the stockholder meeting on Tuesday the new “Office of the CEO” (comprised of CBS’ George Cheeks, Paramount Pictures’ Brian Robbins, and MTV’s Chris McCarthy) outlined a turnaround strategy that involves cutting $500 million in non-content costs—likely involving thousands of layoffs. They also made it clear that the streaming strategy is changing and they were looking to form a joint “significant” venture beyond just a simple marketing bundle. Paramount has recently been in talks with Comcast to form a joint venture with their Peacock streaming service, so it appears that or something like it is being planned.

They touted how the company will be focused on “billion dollar brands,” including Star Trek, which Robbins described as one of the “iconic properties” that occupies both film and television, noting how there is a new Star Trek movie “coming soon.”

From Paramount Global 2024 Shareholder Meeting

You can see Star Trek shown above and below during the presentation as both a past and future “billion dollar brand” for Paramount.

From Paramount Global 2024 Shareholder Meeting

During the online event, Redstone touted the new management trio, acknowledging it wasn’t a “traditional management structure,” and said she has faith they will “take quick action” in “driving value for all our shareholders.” Shari also came out to support the trio earlier this month at the premiere of the movie IF (see below).

Embed from Getty Images

In summary, the future of the company that holds the future of Star Trek in its hands is still in flux. As always, TrekMovie will report on the latest in business news that impacts the franchise.


Keep up with all the corporate news that can impact Star Trek here at TrekMovie.com.

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