The owner of Skydance Media has made a preliminary offer to acquire the parent company of Paramount Global, according to numerous reports published this week.
The offer would allow Skydance owner David Ellison to merge Paramount Global’s media assets with that of his company after taking over National Amusements, which owns the film and television company along with theme parks and other assets.
The report, published by Bloomberg and separately confirmed by CNBC and the New York Post, comes after the Wall Street Journal first revealed Ellison had approached National Amusements owner Shari Redstone about a potential all-cash deal to acquire the company.
CNBC said any deal would likely require additional financing on Skydance’s part, and that help could come from Ellison’s father, Oracle founder Larry Ellison, though the younger Ellison has not reached out to any other people or companies about financially supporting the acquisition.
Discussions are ongoing, and an acquisition isn’t guaranteed, the reports said.
Paramount has been under immense pressure from its investors to course correct after spending billions of dollars on content for its streaming endeavors, including its flagship service Paramount Plus with Showtime. While its slate of original shows and movies have been well-received by critics, few films have been box office blockbusters, and most of its original television shows developed for Paramount Plus have not resonated with audiences.
Instead, subscribers are flocking to Paramount Plus for familiar fare, like re-runs of “Spongebob,” reality shows like “Survivor” and live access to National Football League games aired on local CBS stations. Overall, Paramount’s big bet on original content turned out to be an expensive experiment that didn’t quite pan out.
Paramount’s woes are hardly unique — other media brands, including the Walt Disney Company and Comcast’s NBC Universal gambled with outsized content production budgets for their own streaming endeavors, and also found that their big bets on original content didn’t quite pay off the way they expected.
But Disney has a robust library of classic movies and acquired television shows to fall back on, and NBC Universal is just one part of Comcast’s overall business, which also includes broadband Internet service and advertising platforms. National Amusements, for the most part, banks most of its business on media — and when the media industry emerged from the pandemic with few hits after spending large amounts of money, Paramount’s situation stung a little worse.
Over the past year, Paramount has sought to recapitalize on its investments by putting certain media brands on the market. It has held discussions with numerous potential suitors for BET Media, the Black-centric brand that includes the BET Plus joint venture run with comedian and actor Tyler Perry. And at least one other company — Warner Bros Discovery (WBD) — has expressed interest in acquiring some or all of Paramount, though any such deal would likely face immense regulatory scrutiny and almost certainly require WBD to break off and sell some of its own business.