A Paramount merger is back on (probably)

This is starting to feel like Wayne and Garth shouting “game off” and “game on” as cars interrupt their street hockey. I know I am dating myself with this reference, but it feels the most apt for the start-stop nature of whatever the f-ck is happening at Paramount. Just last week, we learned that a potential deal between David Ellison’s Skydance Media—which already produces a lot of movies for Paramount—and National Amusements, Inc., the parent company of Paramount, was scuppered at the actual last minute by Shari Redstone, the majority shareholder of NAI. 

Now, however, it seems like the deal is back on, with Skydance, with an assist from Redbird Capital, entering a tentative agreement with NAI for the sale of Paramount Global. Paramount Global has a special committee made up of board members set to review the deal, and Redstone and NAI will allegedly have 45 days to see if anyone can top Skydance’s offer. This latest merger talk is “extremely serious” but also not a done deal.

Besides potentially merging with Skydance, Paramount is also still flirting with Warner Bros. Discovery, particularly to merge their streaming platforms, Max and Paramount+. Both platforms have loaded their parent companies with vast debt, and neither is particularly notable (Max is demonstrably worse since it merged with Discovery+). Combining them into one digital hellscape makes a lot of sense. Might as well go the extra mile and call it something regrettable like Paramax or Maxmount. Shari Redstone is also still mulling a separate sale of BET Networks.

Whether or not this is good for the film industry is almost moot because it seems inevitable Paramount sells to someone eventually. Skydance is probably the least harmful option, because at least Skydance boss David Ellison likes movies and likes making movies, and they’re already in a co-financing deal with Paramount which has resulted in films such as Top Gun: Maverick and the later entries into the Mission: Impossible franchise. There’s already a working relationship between companies in place, so this deal kind of keeps everything—including Tom Cruise—in the family.

I would love an oral history of how this merger got back on track, because the report last week made it sound like Redstone and the leadership at Paramount were determined to go their own way despite industry turmoil. But perhaps reality set in, and that is that Paramount simply isn’t healthy enough to survive on its own. A Quiet Place: Day One is doing well, they have some popular shows on CBS, and Jon Stewart has brought The Daily Show’s ratings back up, and 20 years ago, that might have been enough to forge ahead until more hits roll in. But now? 

It’s just too volatile. We are approaching a rather dismal reality wherein only a very few media companies survive, everything else is gobbled up through mergers (this is also happening in the retail space, as Saks Fifth Avenue is poised to buy fellow department store chain Neiman Marcus). Basically, studios are going to be forced to merge, if not outright via sale, then by cobbling together streaming platforms to share libraries and resources to compete with the massive presence of Netflix, and to an only slightly lesser extent, Prime Video and Disney+. At least if Paramount actually goes through with a deal with Skydance, it doesn’t get swallowed up by another studio, a la Disney and Fox. There will still be something like the existing Paramount operating in the world, for a little while longer, anyway. 

Here is Paramount and Skydance’s best boy, Tom Cruise, at the heliport on his birthday.

Source