Filthy rich film producer takes over Paramount
For decades, the Redstone family has controlled Hollywood studio Paramount. With the recent deal, this is the story: Film producer David Ellison, son of billionaire Oracle founder Larry Ellison, is stepping in and taking the majority stake. He and his partners are paying over eight billion dollars for the acquisition.
The traditional Hollywood studio Paramount is getting a new owner. In lengthy negotiations, producer David Ellison eventually emerged victorious. He and his partners are paying more than eight billion dollars for the acquisition.
At first glance, gaining control of Paramount seemed simple due to its stock structure. More than three quarters of the voting shares belonged to the previous owner, Shari Redstone. This theoretically would have been sufficient to acquire just her stake. However, potential lawsuits from the many owners of non-voting shares threatened if they felt disadvantaged.
According to the deal announced by Paramount, Redstone will receive 2.4 billion dollars for her shares. Paramount will merge with Ellison's production company Skydance Media. Additionally, Ellison, his family, and involved investors will bring an additional 4.5 billion dollars to buy out the non-voting shareholders. Finally, they will pay an additional 1.5 billion dollars to pay off Paramount's debts.
The 41-year-old Ellison will become the new CEO of Paramount upon completion of the deal. His father is Larry Ellison, the billionaire founder of the software company Oracle. With the sale of the majority shares by Shari Redstone, the decades-long powerful position in the entertainment industry held by her and her father comes to an end.
Paramount's Streaming Platform Struggles
Paramount is one of the names that made Hollywood great. The studio produced classics like "The Godfather" - and more recently, blockbusters from the Mission: Impossible film series. Skydance contributed to Paramount with money as a co-producer of the latest box office hit "Top Gun: Maverick".
The deal, announced on a Sunday evening, came about after a special committee of Paramount Global's directors approved the merger with Skydance. On Tuesday, the Redstones agreed to the sale of National Amusements, after they had rejected a similar deal with Skydance weeks earlier.
Skydance also owns an animation studio and a gaming division and has a joint venture with the National Football League. Skydance plans to "improve and revitalize" the Paramount and CBS brands, as well as improve profitability and increase investments in digital platforms. The company intends to improve the technology behind the streaming platforms Paramount+ and Pluto and strengthen the cable channels of the company.
Paramount has been facing problems for several years. The American TV network CBS, long a reliable revenue source, has been affected by the general decline in TV advertising spending and the loss of cable subscribers. Paramount+ suffered significant subscriber losses, but it lags far behind the industry leader Netflix in terms of user numbers. As a result, Paramount is sitting on a debt mountain of 14 billion dollars.
Following the sale, Paramount's transition into new ownership will impact the film industry economy significantly. The film industry may witness an increase in takeovers and mergers as prominent figures like David Ellison seek to expand their influence.
Post-acquisition, Paramount's new owner, Ellison, aims to revitalize the Paramount and CBS brands, with potential improvements in digital platforms and streaming services like Paramount+ and Pluto.
