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Shari Redstone has agreed to sell Hollywood group Paramount to independent film studio Skydance, ending her family’s involvement in the company her grandfather founded in 1936.
The merger, which values the new company at $28 billion, marks the end of a tumultuous eight-month process that saw Redstone hold talks with a series of potential buyers, including private equity group Apollo and Sony.
It came just weeks after Redstone blocked a last-minute deal with Skydance, which is run by billionaire David Ellison and backed by US private equity groups including RedBird.
The sale will see the Paramount film studio, which produced classic film titles including The Godfather, Titanic, Chinatown and Raiders of the Lost Arkfrom the Redstone family to Ellison’s company. His father is Oracle co-founder Larry Ellison, one of the richest people in the world.
Under the terms of the agreement, Skydance will invest about $8 billion to acquire Paramount, including paying $2.4 billion to buy out National Amusements, the Redstone company that controls the group behind brands like MTV and CBS. The deal is expected to close in the first half of 2025.
“Given the changing nature of the industry, we want to strengthen Paramount for the future while ensuring that content remains king,” Redstone said. “Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment.”
Redstone controls Paramount through National Amusements, which owns about 10 percent of the company but has nearly 80 percent of the voting rights.
Skydance, an independent studio founded in 2010 by Ellison, 41, has produced blockbusters including Top Gun: Maverick, Star Trek Into Darkness And Jack Reacher: Never go back.
Though it took months to finalize the deal, Ellison and Redstone found common ground early in their talks. Both had demanding fathers — Sumner Redstone repeatedly said his daughter would never run his company — and they both had a fondness for the Paramount studio on Melrose Avenue in Hollywood, according to people close to the executives.
“I am incredibly grateful to Shari Redstone and her family for giving us the opportunity to lead Paramount,” said Ellison, who will become CEO and chairman of the group.
After her father’s death in 2020, Redstone took over the company and championed the idea of challenging Netflix and other streaming services with the launch of Paramount+, which has lost billions.
The future of Paramount+ is one of the pressing questions facing former NBC CEO Jeff Shell, who will become president of the new, merged company.
As losses mounted last year, then-CEO Bob Bakish cut the company’s dividend, unsettling investors and hitting Redstone’s own finances. She quickly began exploring her strategic options.
During a chaotic and highly public process involving multiple competing bids, Bakish and four board members left the company over disagreements with Redstone.
As part of the agreement reached Sunday, Paramount’s advisers have 45 days to consider competing bids for the company.
In the weeks since the previous Skydance deal collapsed, other potential bidders have emerged, including media magnate Barry Diller and Edgar Bronfman Jr, the media executive and heir to the Seagram business. US private equity group Apollo had also joined Sony in offering to buy Paramount for a $26 billion valuation.
“The recapitalization of Paramount and the merger with Skydance under the leadership of David Ellison will be a significant moment in the entertainment industry, at a time when established media companies are increasingly challenged by technological disintermediation,” said Gerry Cardinale, founder of RedBird and Ellison’s lead partner in the deal.