Logos for Paramount Global and Skydance Media. Logos for Paramount Global and Skydance Media.

Over the last year-plus, there’s been a lot of discussion about the future of CBS parent company Paramount Global. That’s included talk of a potential merger with/acquisition by Warner Bros. Discovery (or even Comcast, but that would be harder from an antitrust standpoint with that company owning NBC) and a number of takeover bids, including ones from Byron Allen and Apollo Global. Now, Paramount has entered exclusive merger talks with Skydance Media, and turned down an all-cash offer from Apollo to do so, as Jessica Toonkel and Miriam Gottfried of The Wall Street Journal reported Wednesday:

Here’s more from that piece:

Members of Paramount Global’s board agreed to enter exclusive merger discussions with Skydance, favoring it over a recent $26 billion all-cash offer from private-equity firm Apollo Global Management.

The move means the entertainment conglomerate is putting on pause any conversations with other bidders for 30 days while it tries to work out a deal with Skydance, a production company led by David Ellison, people familiar with the matter said.

The decision could give Skydance an edge over Apollo, which earlier had offered $11 billion for Paramount’s movie studio, but on Sunday offered to buy the entire company for $26 billion, including debt.

The Skydance move comes after that company previously agreed to buy National Amusements, which controls 77 percent of the Paramount Global voting stock, from Shari Redstone. But the plan here is to merge the Skydance and Paramount movie studios, and they need fuller control and a deal approved by independent Paramount directors for that. So that has them in these current talks.

There’s been a lot of uncertainty about Paramount Global over the past year-plus, and a lot of that has to do with debt. Per FactSet, they have market capitalization of around $9.5 billion and debt of $14.6 billion. That (plus a generally-tough media environment) was involved in their decision to lay off around 800 employees (three percent of their workforce) in February despite a record-setting Super Bowl broadcast.

There’s also been lots of discussion of Paramount’s challenges in competing with larger media behemoths, especially in streaming. That, and a heavy-consolidation environment, led to some of that past merger or acquisition talk. (And that environment is not getting easier in sports in particular with the announcement of the ESPN-WBD-Fox joint streaming venture, with CBS a notable omission there.)

A merger with Skydance certainly would give the new outlet some more scale, especially in movies. And these companies already have a history of working together there, with Skydance co-producing and co-financing films with Paramount from 2006 through 2021 and continuing to work with them on several notable franchises (including Top GunMission Impossible, and Star Trek) since then. Skydance would add to Paramount Global’s sports, too, with their 2021-launched Skydance Sports division already doing a lot of notable projects and striking a partnership with the NFL.

The 2006-founded Skydance is led by founder, chairman, and CEO David Ellison, son of Oracle’s Larry Ellison. David Ellison is the controlling shareholder, but Skydance also has funding from a lot of other prominent investors, including RedBird Capital Partners, CJ ENM, Tencent, and KKR. We’ll see if they can get this deal with Paramount done, and what that winds up meaning if they do.

[The Wall Street Journal]

About Andrew Bucholtz

Andrew Bucholtz has been covering sports media for Awful Announcing since 2012. He is also a staff writer for The Comeback. His previous work includes time at Yahoo! Sports Canada and Black Press.