Shari Redstone, president of National Amusements and vice president of CBS and Viacom, speaks at the WSJTECH live conference in Laguna Beach, California, USA, on October 21, 2019.
Mike Blake | Reuters
David Ellison's Skydance Media and its financial backers are exploring a deal to privatize all global paramountpeople familiar with the matter told CNBC.
Skydance, the film and television studio run by Ellison, has exchanged preliminary information with Paramount, said the people, who asked not to be identified because talks about the deal are private. Full due diligence has not begun, the people said.
Skydance has been working with private equity firms RedBird Capital Partners and KKR and company. in a deal to buy National Amusements, the holding company owned by Shari Redstone. He controls 77% of Paramount's voting shares.
But that deal depends on Skydance's merger with Paramount, and the likely structure for a merger would be a complete private takeover of the largest media company, the people said.
Redstone is considering selling as the media landscape shifts away from traditional television toward streaming. While Paramount Global has run a profitable business for decades, it is smaller than Netflix, Google's YouTube, Apple, Amazon and other larger streaming services that have larger balance sheets to afford sports and entertainment content.
No acquisition is assured and talks could fail.
It is unclear whether Redstone would demand a different premium for the sale of National Amusements than Paramount Global's remaining shareholders would get.
Skydance would need additional capital to acquire Paramount, which has a market capitalization of $8.2 billion and about $15 billion of debt. Some of that funding could come from Skydance's private equity partners and Larry Ellison, the billionaire co-founder of Oracle and the father of David Ellison. Skydance has not yet sought outside funding as it has not decided whether it wants to move forward with a deal, the people said.
Skydance is not interested in a deal in which it would acquire only National Amusements but not all of Paramount, the people said. While such a deal would give Skydance control of Paramount, it would not resolve Paramount's problems as a publicly traded company, which include managing the growing but loss-making Paramount+ streaming service and operating linear cable assets. in decline like MTV, VH1, Comedy. Central and Nickelodeon.
Spokespeople for RedBird, Skydance, Paramount Global and National Amusements declined to comment.
Warner Bros. Discovery It has also had preliminary talks about acquiring Paramount Global, according to people familiar with the matter. If Redstone sells to Skydance, a motivating factor would be his fear that Warner Bros. Discovery would prefer to merge with Comcast's NBCUniversal, one of the people said.
Puck first reported on Skydance's interest in acquiring National Amusements. The Wall Street Journal reported last week that Skydance was interested in a two-party deal that would include the merger of Skydance and National Amusements. The company's initial information exchange was first reported by Bloomberg.
Disclosure: Comcast NBCUniversal is the parent company of CNBC.
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