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Paramount Global is being acquired by Skydance Media. The complex deal, worth over $8 billion, will happen in a two-step transaction that involves Skydance first acquiring Paramount’s controlling company, Shari Redstone’s National Amusements, and then merging Skydance and Paramount.

The deal will have huge ramifications for the animation industry, including a major new role for Skydance’s head of animation, John Lasseter.

Here’s a breakdown of the deal:

  • The new company is being billed as a “next-generation media and technology leader” and will combine Skydance’s “financial resources, deep operating experience, and expertise in cutting-edge technology” with Paramount’s “iconic IP, deep film and television library, proven hit-making capabilities, and linear and streaming platforms.”
  • Ellison’s vision is to make his version of Paramount a “premier, creative-first destination for storytellers, dedicated to top-quality content and will be positioned to improve profitability, foster stability and independence for creators, and enable more investment in growth areas. The transaction will stabilize and strengthen Paramount as a world-class media enterprise, with a focus on technological advancements, across multiple entertainment platforms including animation, gaming, film, sports, news and television.”
  • The new Paramount will be led by David Ellison as chairman and chief executive officer and Jeff Shell as president. Ellison is the son of Oracle co-founder Larry Ellison, the fifth-richest person on the planet whose current net worth is $180 billion. Shell is the former head of NBCUniversal, who was fired last year after an internal investigation found that he had acted inappropriately towards a female employee. The female employee had accused Shell of sexual harassment and sex discrimination, and Shell had apologized for an “inappropriate relationship with a woman in the company.”
  • The Ellison Family and RedBird Capital Partners are the key investors in the Paramount takeover. They are investing $2.4 billion to acquire National Amusements for cash and $4.5 billion for the stock/cash merger consideration, as well as $1.5 billion of primary capital to be added to Paramount’s balance sheet. Their total investment is around $8.4 billion. Post transaction close, Skydance’s investment group will own 100% of the new Paramount Class A shares and 69% of outstanding Class B shares.
  • The deal will have a huge impact on the animation world, though it is unclear yet what will happen. Skydance’s animation unit is run by former Disney and Pixar chief creative officer John Lasseter, who is likely to take on a more significant role in Paramount’s animation operations. Lasseter’s expanding role was clearly outlined in the official announcement with this sentence: “Skydance’s exceptional pool of in-house creative animation talent, led by pioneer John Lasseter, will expand Paramount’s animation capabilities as well as consumer products opportunities over the long-term.”
  • Paramount owns numerous animation studios including Nickelodeon Animation Studios, Paramount Animation, and CBS Eye Animation Productions. Paramount also owns a deep library of cartoon and comic characters including Spongebob Squarepants, Garfield, Beavis & Butt-head, Ren & Stimpy, Fairly Oddparents, Daria, Dora the Explorer, Doug, and Avatar: The Last Airbender. It also owns the Terrytoons library, which includes characters like Mighty Mouse, Heckle and Jeckle, Gandy Goose and Sourpuss, Deputy Dawg, Flebus, and Tom Terrific.

Here are statements from some of the key players in the deal.

Shari Redstone, chair of Paramount Global and chair, president, and CEO of National Amusements, said:

In 1987, my father, Sumner Redstone, acquired Viacom and began assembling and growing the businesses today known as Paramount Global. He had a vision that “content was king” and was always committed to delivering great content for all audiences around the world. That vision has remained at the core of Paramount’s success and our accomplishments are a direct result of the incredibly talented, creative, and dedicated individuals who work at the company. Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king. Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment. As a longtime production partner to Paramount, Skydance knows Paramount well and has a clear strategic vision and the resources to take it to its next stage of growth. We believe in Paramount and we always will.

David Ellison, founder and chief executive officer of Skydance, said:

This is a defining and transformative time for our industry and the storytellers, content creators and financial stakeholders who are invested in the Paramount legacy and the longevity of the entertainment economy. I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount. We are committed to energizing the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come.

Gerry Cardinale, founder and managing partner of RedBird Capital, said:

The recapitalization of Paramount and combination with Skydance under David Ellison’s leadership will be an important moment in the entertainment industry at a time when incumbent media companies are increasingly challenged by technological disintermediation. As one of the iconic media brands and libraries in Hollywood, Paramount has the intellectual property foundation to ensure longevity through this evolution – but it will require a new generation of visionary leadership together with experienced operational management to navigate this next phase. RedBird is making a substantial financial investment in partnership with the Ellison family because we believe that the pro forma company under this leadership team will be the pace car for how these incumbent legacy media businesses will need to be run in the future.

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