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Inside the controversial offer to buy the studio behind The Godfather and Top Gun: Maverick – Monomaxos

About 30 years ago, the Paramount company was at the center of one of its greatest challenges the most infamous takeover battles in the company's history, with boldface names like Barry Diller, John Malone, Sumner Redstone, And Wayne Huizenga (google him – that's what he used to be a huge deal) fight each other for control of the legendary studio David Geffen, Michael Ovitz, And Ted Turner on the periphery.

However, now in 2024, Sumner's daughter will Shari Redstone, is looking to exit its majority stake in the company and has found few interested buyers, even though the company's stock price is near record lows (i.e. you could get it cheap, at least in theory).

One tricky thing about Paramount these days is that its business is still heavily tied to linear television, with over 50% of its revenue coming directly from the melting cable TV bundle. It's a problem that all traditional Hollywood studios face – and one that Netflix 100% doesn't have.

Private equity investor Apollo Global Management has reportedly made an offer of approx 26 billion dollars for the entire company (including Paramount Global's debt of over $14 billion). Nevertheless, the committee leading the sales process decided to focus on a competing offer from Skydance, a well-funded production company with additional gaming and feature animation divisions headed by David Ellison– yes, the Oracle Ellisons – and was valued at over $4 billion at its last fundraising in 2022.

Skydance and Paramount are actually already working together, as the former has co-financed films from the latter, including Top Gun: Maverick and last summer MI-7: Dead Reckoning. Skydance and Paramount are in the middle of a 30-day exclusive negotiation period, and if you think they're trying to keep things hush-hush, you probably also think the Kardashians are trying hard to keep all of their family secrets behind closed doors.

The latest details include a slew of financial details regarding voting shares, common stock and possible share buybacks. (For weird birds like me who find this stuff fascinating, see the details my last Wake up Newsletter at The Ankler).

Why is the Skydance offer preferred over the Apollo offer? An important factor is probably that the Skydance offer is focused on the first purchase Shari Redstone, President of National Amusements Inc., the majority shareholder of Paramount Global. The consortium led by Skydance is allegedly Redstone offered a large payment of $2 billion for its 77% voting shares, a premium to the stock's current value. Apollo's offer reportedly covered only the Paramount Global company and essentially only bought out common shareholders, in which Redstone holds about 10% of the shares.

Ellison's partners in this Skydance offering are private equity firms KKR and Redbird, with funding from the Ellison family patriarch Larry Ellison probably in the mix too. Suffice to say, they don't do this so they can finally fulfill their dream of appearing on MTV. Rather, Ellison's focus here is loud Bloombergappears primarily to gain control of Paramount's film studio and TV divisions, which include a massive library Bottom up To The Godfather To Beverly Hills police officer, a nice merch store from things like Nickelodeon and Paw Patrol, and the famous backstage lot on Melrose Avenue in Hollywood. In fact, it has been reported that Ellison plans to invest further in the studio (alongside KKR and Redbird money and possibly some money from Pa Ellison and Larry). So if this deal goes through, you'll likely continue to see big films from Paramount in theaters.

The trickier part is what to do with its declining linear TV assets, including CBS, free streaming service Pluto and loss-making Paramount+, all of which are owned by the company. P+, as it is known internally, lost over $1.6 billion in 2023. Yes, losses are expected to be less severe in 2024 and profitable domestically in 2025, but there is no set timeline for overall profitability.

According to the Wall Street Journal, Ellison has indicated to Paramount management that he would like to merge P+ with another streaming service, and Comcast's Peacock would be a suitable candidate, especially since Paramount+ is already merged with Showtime and Peacock programming in a joint venture in Eastern Europe called itself Sky Showtime. (These two services lost about $4.3 billion combined last year, so the financial rationale here seems unclear at best.) But if you're a big Paramount+ fan, there's a good chance you'll get a subscription This potential other combo service allows you to watch many of your favorites Taylor Sheridan Series and other P+ tariffs should this Skydance deal come about.



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Meet the author behind the lifestyle inspiration! Antonio brings a unique perspective to the world of lifestyle, weaving together words that captivate and ideas that resonate. With a keen eye for detail and a passion for embracing the richness of everyday life, Antonio invites you on a journey to explore the art of living well.

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