Barry Diller Says IAC Bid for Paramount Is Over

IAC chairman Barry Diller signaled on Friday that he’s calling it quits on the company’s pursuit of Paramount Global.

Earlier this month, IAC signed nondisclosure agreements with National Amusements to explore a possible bid, an individual previously confirmed to TheWrap.

But the Ellison family and RedBird Capital Partners ultimately reached a two-step, $8 billion deal with Paramount’s controlling shareholder Shari Redstone that would see the former acquire her holding company National Amusements before merging David Ellison’s Skydance Media with Paramount Global. Approximately $6 billion of that total financing is coming from David’s father and Oracle co-founder, Larry Ellison.

“It’s hard to predict, but I think it is over,” Diller told CNBC in an interview on Friday. “It is unwise to get in an auction with someone who has a pretty much unlimited balance sheet.”

Under the terms of the agreement, which is expected to close in the third quarter of 2025 subject to regulatory approval and other customary closing conditions, NAI will receive $2.4 billion, including $1.75 billion for the equity and the assumption of $650 million in debt, while non-NAI shareholders will receive $4.5 billion. Meanwhile, $1.5 billion in new capital will be used to pay down Paramount’s $14.6 billion in long-term debt and recapitalize its balance sheet.

Class A shareholders can elect to receive $23 cash per share or 1.5333 shares of Class B stock of new Paramount. Class B shareholder can elect to receive $15 per share or one share of Class B stock of new Paramount, which is subject to proration if those elections exceed $4.3 billion in aggregate. If shares are elected over cash, reducing the cash required to under $4.3 billion, the $1.5 billion of cash going to Paramount’s balance sheet could grow up to a cap of $3 billion.

Skydance’s consortium of investors, which include RedBird Capital Partners and the Ellison family, will control 70% of shares outstanding and have 100% voting ownership in new Paramount, which will remain public. New Paramount will have an enterprise value of $28 billion, while Skydance is being valued at $4.75 billion.

The deal also includes a  45-day go-shop provision, in which Paramount would pay a $400 million breakup fee in the event that the company receives a better offer from another bidder.

“They’ve stolen the company, essentially – ‘stolen’ is a harsh word,” Diller said of the deal. “But the method of how they got this cheap price, which is this wild valuation for a private production company, that averages their price wildly down. Structurally, to compete with that, you have to put cash in. So if you have to put cash in, unfortunately, the structural disadvantage they have becomes an advantage because he can simply say, ‘Another billion? Another two?’ And I did an auction for Paramount once. I don’t think I would do it again.”

In addition to Diller and Skydance, others who have expressed interest in Paramount include Byron Allen, former Warner Music Group CEO Edgar Bronfman Jr. and “Baby Geniuses” producer Steven Paul.

“It probably takes $9 billion in capital. And even if you did that, there’s a really good chance that he’ll say, ‘I’ll pay the nickel more,’” Diller said when asked if another bidder could be successful during the go-shop period. “There’s no question Paramount has been mismanaged for many, many years, probably going back to Philippe, whatever … Mr. Dauman, or whatever his actual, real name was. If you go back and see how it was mismanaged and the company is still breathing, it’s a great opportunity. And the fact that [the Ellisons have] actually been able –
looks like they have been able – to buy it at such a low value, I would think that you’d have to be not really very good to pull it off.”

Skydance’s months-long pursuit of Paramount has been criticized by many of Paramount’s minority shareholders, who have previously argued that it would prioritize Redstone at the expense of the media giant’s other investors.

On Wednesday, Scott Baker, who owns over 40,000 Class B shares, filed a proposed class-action lawsuit in the Delaware Court of Chancery seeking to block the deal, arguing it could cost Paramount’s shareholders $1.65 billion in damages. He alleges that Skydance, Redstone and Paramount’s board of directors have breached their fiduciary duty to shareholders and that the impetus behind the transaction is to “cash out Redstone’s floundering Paramount investment—and at a substantial premium to what will be received by other stockholders.”

In addition to Baker, GAMCO Investors Inc. chairman Mario Gabelli filed a books and records request in Delaware earlier this month seeking more specifics on Redstone’s payout in the deal. Gabelli is the largest class A shareholder behind Redstone, with GAMCO representing clients that own 5 million Class A shares and 1 million Class B shares.

Additionally, the Employees’ System of Rhode Island filed its own records request in May , with the pension fund expressing concern that Paramount’s board not preventing Shari Redstone from diverting corporate opportunities or interfering with Paramount’s ability to seek the best deal for Paramount and its other stockholders.” A ruling in that case has been scheduled for Aug. 2.

Representatives for Paramount declined to comment. Skydance and National Amusements did not immediately return TheWrap’s request for comment.

In addition to Paramount, Diller also said he thinks Warner Bros. Discovery “definitely” has a case after threatening to take “appropriate action” after the NBA rejected its matching rights proposal and moved forward with 11-year deals with Amazon, NBC and Disney.

The deals, which are reportedly worth a collective $76 billion, start in the 2025-26 season and run through 2036. Some 75 regular-season games will be on broadcast TV each season, up from the minimum of 15 games under the current agreement.

“I don’t know how it’ll turn out, but when you’ve got matching rights, or first refusal rights or whatever, and you exercise them, then when you get into it, when people say, ‘Oh no, you didn’t quite come up to what we thought it was,’ that’s a real litigable matter. And so he’s got a very good chance to at least muck it up so that they settle.”

Diller expects the two parties to reach a settlement, which he said needs to include games.

“If [David Zaslav] doesn’t get games out of it, then he’s not a pretty smart executive that I think he is. Money is not going to do him any good. He needs games,” Diller said.

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