Paramount merger off the table

Paramount’s controlling shareholder has ended negotiations with Skydance Media about a potential merger after more than six months of discussions.

Shari Redstone’s National Amusements controls 77% of voting shares in Paramount, and was in protracted talks to Skydance Media over a prospective merger. The news “shocked the entertainment industry”, Variety reports, as a deal was expected to be imminent.

In a statement, the company said: “National Amusements, Inc., the majority voting shareholder of Paramount Global, today announced that they have not been able to reach mutually acceptable terms regarding the potential transaction with Skydance Media for the acquisition of a controlling stake in NAI.

“NAI is grateful to Skydance for their months of work in pursuing this potential transaction and looks forward to the ongoing, successful production collaboration between Paramount and Skydance.

“NAI supports the recently announced strategic plan being executed by Paramount’s Office of the CEO as well as their ongoing work and that of the Company’s Board of Directors to continue to explore opportunities to drive value creation for all Paramount shareholders.”

Since former chief Bob Baskin stepped down in April, Paramount Global has been under the direction of three executives under the lofty Office of the CEO title.

George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO, Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, president and chief executive officer of Paramount Pictures and Nickelodeon, wrote a memo to staff yesterday addressing the merger collapse.

“As you heard yesterday, the proposed transaction with Skydance Media is not moving forward,” the memo reads.

“So, what does this mean for Paramount? While the Board will always remain open to exploring strategic alternatives that create value for shareholders, we continue to focus on executing the strategic plan we unveiled last week during the Annual Shareholder Meeting, which we are confident will set the stage for growth for Paramount.”

The CEOs pointed to a focus on three pillars: transforming Paramount’s streaming strategy to accelerate its path to profitability, streamlining the organisation and reducing non-content costs; and optimizing our asset mix, by divesting some of our businesses to help pay down our debt.

The memo continued: “As we advance each of these initiatives, we will continue to prioritise investment in our world class franchises, films, series and sports, which are the core of our business.

“As we look ahead, we are confident about what’s in store for Paramount. We believe in you and we believe in Paramount. We have the content, the people, and the right plan to ensure a strong future. And, we look forward to discussing our strategy in more detail at our Global Town Hall on June 25.”

Paramount Global shares crashed by 7.9% within half an hour of the merger announcement.

Mumbrella has reached out to Paramount Australia for comment.


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