“The Godfather, Part III” is universally regarded as the disappointing third sibling of “The Godfather” franchise, but outside of unofficially ending Sofia Coppola‘s acting career, it is known for one famous line. At a pivotal moment in the film, Michael Corleone (Al Pacino), mutters, “Just when I thought I was out, they pull me back in.” That phrase is more than appropriate to describe the dance between Shari Redstone and Skydance Media over control of the studio that released the Francis Ford Coppola drama, Paramount.
According to multiple reports, Redstone and Skydance now have a deal that will allow the remaining matriarch of the once-proud Viacom empire, now known as Paramount Global, to walk away with $1.75 billion. Skydance Media, run by David Ellison, would take control of the combined company in a two-step process thanks to an unusual corporate setup on the Paramount side.
Redstone, who controls National Amusements, who controls 77% of Paramount’s voting stock, abruptly walked away from a previous deal to merge the two companies just three weeks ago. She did this as the board of Paramount was preparing to approve that deal for shareholders. Moreover, a prospective merger between the two companies was considered so dead, that Ellison sent a long thank you to Skydance employees for their patience in watching the matter unfold in the media.
Meanwhile, the recently installed co-chairman trifecta of Brian Robbins, George Cheeks, and Chris McCarthy held a “tough love” town hall with employees last week informing them that bankers had been hired to ascertain the value of “certain Paramount-owned assets” and layoffs were on the horizon to reach at least a half billion dollars in savings. And, earlier today, there were reports a long-rumored sale of Paramount’s BET assets was back on the table.
Despite the fact that Skydance will no doubt look to unload some assets and initiate some layoffs, the Ellison company has made it clear it wants to invest in the fabled studio. There will be a slight sense of relief across Hollywood when the deal goes through. Other potential bidders, including Sony Pictures and private equity firm Apollo Global Management, would have turned the studio into a defacto distribution label and sold the almost 100-year-old Hollywood lot. In an optimistic scenario, Skydance will invest more into Paramount Pictures which only had nine scheduled releases for 2024. The bigger question is surrounding Paramount+ with rumors flying that it could merge with Warner Bros. Discovery’s Max, and other media companies, to form a new joint venture. It is unclear what Skydance’s stance is on that possible scenario.
Paramount Global controls several popular entertainment entities including Paramount Pictures, CBS, the MTV Networks (including MTV, Nickelodeon, Comedy Central, and CMT), BET (for the moment), and the struggling streaming service, Paramount+ with Showtime. Paramount Pictures recently saw “A Quiet Place: Day One” open to a franchise record $52 million and almost $100 million worldwide last weekend. However, in a sign of how cash-strapped the company is, “Day One” already has a PVOD date of July 30, less than six weeks after release.
Skydance Media is a television, film, and video game company controlled by Ellison and RedBird Capital Partners, among others. Over the years, Skydance co-financed several Paramount Pictures releases including the last four “Mission: Impossible” movies, “Top Gun: Maverick,” the last two “Star Trek” installments, and the “G.I.Joe” franchise. The company also produced “6 Underground” and “The Old Guard” for Netflix and sold the Chris Pratt Sci-Fi flick “The Tomorrow War” to Prime Video at the height of the pandemic. The company’s television credits include “Grace and Frankie,” “Jack Ryan,” “Foundation” and “Reacher.” Skydance also has animation and sports divisions.
Ellison’s sister, Megan Ellison, founded Annapurna Pictures, which produced several acclaimed films such as “Her,” “If Beale Street Could Talk,” “Phantom Thread,” “Zero Dark Thirty,” and “American Hustle,” among others. It was an independent distributor for a short period before partnering with the former MGM Studios in the late ’10s. The siblings are the sires of Larry Ellison, who co-founded Oracle and is currently ranked as the eighth richest person in the world.