As news of Skydance Media’s merger with Paramount Global sank in across the media business, top execs from Skydance and chief backer RedBird Capital on Monday lifted the veil on negotiations, streaming plans, their regulatory outlook, Larry Ellison’s role and a host of other topics.
Top Of The Mountain: David Ellison’s Skydance Taking Over Paramount After $8 Billion Investment
One question on the minds of many: After years of struggle, with deep-pocketed tech titans able to pay more to lure away talent, how will the recapitalized Paramount make its pitch to the creative community?
“When you create that culture of creativity and set a high bar, it’s our hope that the most talented people in the whole world will want to call Paramount home,” Skydance CEO David Ellison said.
Jeff Shell, a senior RedBird exec and former NBCUniversal CEO who is in line to become president of Paramount when the deal closes, cited a stream of back-and-forths with talent on emails and texts in recent months. “Just about everybody has reached out to us,” he said.
Asked what changed in order for Paramount controlling shareholder Shari Redstone to return to the negotiating table with Skydance after walking away nearly a month ago , RedBird founder Gerry Cardinale replied, “Nothing changed. If you step back, the minute-by-minute reporting of the deal creates this impression that something changed. … A deal like this needs to be iterative.”
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Negotiators for Skydance and RedBird “didn’t really stop dialogue with her or her family all the way through this … The construct of the deal always remained the same. Yes, we evolved it but what was very important to Shari and her family was to protect her family’s legacy.” Cardinale didn’t name names, but he drew a bright line between the company’s approach and those with competing proposals. The Skydance mantra? “You don’t take it private, break it up and kill it,” he said.
Cardinale said the principals don’t anticipate any issues with the regulatory process, though they have set aside about a year for it to unfold. The climate has been less hospitable of late to a number of deals as Biden Administration appointees have taken a tougher line on M&A, though there would be a dramatic shift if the president is not re-elected.
Skydance Chief David Ellison Says Paramount Must “Not Be Paralyzed” During Long Run-Up To Merger Close; Asset Sales Can Continue In Interim
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Without addressing the larger political issues at play, Cardinale described the deal as “pro-growth” and said it is based on “keeping all the assets intact” and “not predicated on any restructuring.”
The lack of foreign ownership or existing FCC license holder trying to buy the parent of CBS will also be helpful, he said. Sony Pictures Entertainment explored a bid for Paramount alongside private equity giant Apollo, but Sony’s foreign control presented a potential hurdle.
RELATED: Paramount President-To-Be Jeff Shell Says Linear TV Will Remain “A Strong Business For Decades To Come”
Asked how the new owners would “turn around” Paramount+, RedBird exec Jeff Shell, who will become president of Paramount at deal close, pushed back a bit on the premise of the question. “I don’t think it needs to be turned around, necessarily. They’ve done a good job,” he said. Instead, he went on, the main questions will be, “How much more are you investing, how much money is it losing? Our strategy is to focus on cash flow.” In addition, he conceded, “We could be a little bit smarter about licensing” rather than “blindly” putting titles on P+.
The role of Oracle billionaire Larry Ellison in the Paramount transaction has never been made explicit, though Sunday’s announcement confirmed that “Ellison Family” funds were part of the financial underpinnings of the deal. Asked about the topic on Monday, David Ellison said, “My father and I talk all the time. He’s obviously an incredible advisor across the board with this entire process … I’m grateful for his support and leadership and advice.”
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