Matt Sayles/CBS/Paramount/Viacom
Following tonight’s announcement of Skydance Media’s $8 billion deal to acquire Paramount Global, the current co-CEO troika of Brian Robbins, George Cheeks and Chris McCarthy issued a statement to staff that “until the transaction closes, it will be business as usual.” The transaction is not expected to close until the first half of 2025 due to regulatory approvals.
While it remains to be seen which of the triad will continue in the new Skydance-owned Paramount, what was certain tonight is that Skydance Media’s David Ellison will be the new chairman and CEO of the new conglomerate, with former NBCUniversal executive Jeff Shell serving as president.
In a memo to employees, Shari Redstone, Paramount Global’s majority shareholder, spoke of the troika, saying, “I think we can all agree on their enormous contributions to this company,” while explaining why the company has moved toward a CEO troika while simultaneously being courted by Skydance.
“At the same time, as you know, our board has been focused on ensuring that we take every opportunity to best position the company for the future and maximize value creation for all shareholders,” Redstone said.
The troika added in its note to employees: “We will continue to operate as an independent company and move forward with the strategic plan we presented at our public meeting. This includes measures to modernize our organization by streamlining teams, eliminating redundant functions and reducing the size of our workforce. We will also continue to explore opportunities to transform global streaming and optimize our asset mix by divesting some of our assets.”
Paramount Global has already held discussions with potential partners to take a financial stake in Paramount+, in addition to preparing BET Media for a sale. Plans are underway to achieve half a billion dollars in overhead savings.
Additionally, the co-CEO, as you can read below, praised the union of Skydance and Paramount Global combining “Skydance’s financial resources, deep operational experience and cutting-edge technology with Paramount’s iconic intellectual property, vast film and television library, proven hit-making capabilities and linear and streaming platforms that reach millions of viewers.”
While much has been written about Paramount Global’s nearly $15 billion in long-term debt, this isn’t some kind of lump sum payment that’s due next year. Wall Street has been tough on Paramount Global regarding its future viability as a streamer with high overhead costs, and that’s a challenge most major studios faced when they first entered the OTT space.
Paramount’s special committee of the board has 45 days to evaluate the other offers on the table, but tonight’s news surely indicates that all winds are blowing in Skydance’s favor.
At the time of publication, shares of Paramount Global were up +0.17% in after-hours trading at $11.83.
Here is the note from the co-CEOs:
Hello everyone,
Today marks an important milestone for Paramount as we announced a definitive agreement with Skydance Media. By combining Skydance and Paramount, we will build on our historic legacy to create an even stronger next-generation media and technology leader positioned to win in today’s rapidly changing media landscape.
As Shari noted, we expect this transaction to close in the first half of 2025, as it is subject to regulatory approvals and other necessary steps to close. The agreement also includes what is known as a “go-shop” provision, meaning that the special committee of the Paramount board of directors and its designees will be permitted to solicit and actively evaluate alternative acquisition proposals for a period of 45 days.
Until the transaction closes, it will be business as usual: we will continue to operate as an independent company and implement the strategic plan we presented at our public meeting. This includes actions to modernize our organization by streamlining teams, eliminating redundant functions and reducing the size of our workforce. We will also continue to explore opportunities to transform global streaming and optimize our asset mix by divesting certain of our assets.
We are on a journey to transform Paramount for the future, and thanks to your hard work, Paramount brings tremendous value to this combination with Skydance. Paramount continues to be home to invaluable intellectual property that powers the best in entertainment to audiences around the world, and a vibrant creative culture. And our assets are among the most compelling in the industry, including the number one broadcast network in the U.S. with CBS and our leading free-to-air networks in the U.K., Australia, Argentina and Chile; iconic brands like Nickelodeon, MTV, BET and Showtime; a top five SVOD service in the U.S. with Paramount+; and a free, ad-supported global streaming service with Pluto TV. And of course, Paramount Pictures continues to create genre-defining films that thrive at the box office, most recently with A quiet place: first day – the latest addition to our century-old film library.
This transaction would combine Skydance’s financial resources, deep operational experience and cutting-edge technology with Paramount’s iconic intellectual property, vast library of films and television series, proven hit-making capabilities and linear and streaming platforms that reach millions of viewers. And we already know that Paramount and Skydance, led by David Ellison, can achieve incredible results together, as demonstrated by our strong 15-year collaboration that has produced highly successful films and franchises like Top Gun: Maverick And Mission: Impossible – Fallout.
The Paramount we know today would not have been possible without the leadership of Shari and the Redstone family. It is because of their vision and support over the years that we are one of the largest entertainment companies in the world, with the best team in the business. We want to sincerely thank Shari and her entire family for their unwavering support and leadership. We also want to thank our Board of Directors, who have helped guide us along the way. We appreciate all they do on behalf of Paramount.
And most importantly, we want to thank each and every one of you, our Paramount Global team, for everything you have done and continue to do to drive Paramount to new heights.
We know you will have questions and we will share as much information as possible throughout this process. In the meantime, you can read more about the agreement in the press release here.
THANKS,
George, Chris and Brian
