Oracle co-founder Larry Ellison is set to acquire a controlling majority stake in Paramount Global as his son, David Ellison, and RedBird Capital Partners close an $8 billion deal to acquire the studio, according to a recent regulatory filing with the Federal Communications Commission. The filing, required due to the transfer of broadcast licenses associated with the CBS Television Network and local TV stations, indicates that Larry Ellison will own 77.5% of National Amusements through a trust and a series of corporations. The remaining 22.5% of NAI will be held by RB Tentpole LP, led by RedBird Capital Partners founder Gerry Cardinale, if the deal is finalized.
The two-step transaction will involve David Ellison’s Skydance Media acquiring National Amusements, currently controlled by Paramount shareholder Shari Redstone, before merging with Paramount Global. The deal is anticipated to close in the first half of 2025, pending regulatory approvals and other customary conditions. David Ellison is set to become Paramount’s chairman and CEO.
Larry Ellison, the fifth-richest person globally, is providing $6 billion in financing for the deal, with the remaining amount supported by RedBird Capital Partners. Under the terms of the Skydance merger, the newly formed Paramount will have an enterprise value of $28 billion, while Skydance is valued at $4.75 billion. National Amusements will receive $2.4 billion, including $1.75 billion for equity and the assumption of $650 million in debt, and non-NAI shareholders will receive $4.5 billion. Additionally, $1.5 billion in new capital will be allocated to reduce Paramount’s $14.6 billion in long-term debt and recapitalize its balance sheet.
Class A shareholders have the option to receive $23 per share in cash or 1.5333 shares of Class B stock in the new Paramount. Class B shareholders can choose between $15 per share or one share of Class B stock, with proration applying if these elections exceed a total of $4.3 billion.
Existing public shareholders of Paramount who opt for Class B non-voting shares instead of cash are expected to hold about 28.3% of the Class B non-voting shares of the new Paramount, assuming full participation in the cash election by Class B stockholders. If the preference for shares over cash reduces the cash requirement below $4.3 billion, the $1.5 billion designated for Paramount’s balance sheet could increase up to a maximum of $3 billion.
The filing stated that the new owners plan to "preserve and enhance the legacy" of the CBS TV network and the company’s 28 owned and operated local stations, ensuring that the content in news, sports, and entertainment continues to represent a diversity of independent viewpoints.
“With an improved balance sheet, new Paramount will be able to make strategic investments in the legendary newsgathering and reporting efforts of the national CBS television network and the company’s O&O local stations. These investments will ensure that both the national network (which reaches all television markets) and the O&Os will continue to serve as trusted sources of news,” the filing stated. “The investment in the CBS television network similarly will help ensure popular live sports and highly rated entertainment programming remain available to viewers over-the-air and will benefit CBS affiliate stations.”
The filing added that the Skydance deal will “not result in any diminution of competition in the broadcasting marketplace.”
However, the deal has encountered resistance from investors who are concerned it may favor Redstone at the expense of Paramount’s minority shareholders. Mario Gabelli, the largest Class A shareholder after Redstone, whose firm GAMCO Investors Inc. represents clients owning 5 million Class A shares and 1 million Class B shares, has submitted a books and records request for more details on the transaction.
The Employees’ Retirement System of Rhode Island has petitioned a Delaware court to compel Paramount to release documents and communications related to its negotiations with Skydance, citing concerns that Redstone may be compromising the board’s ability to secure the best deal for shareholders.
Additionally, Paramount investor Scott Baker has filed a proposed class action lawsuit, alleging that the Skydance deal breaches Redstone and the Paramount board’s fiduciary duties and will result in $1.65 billion in damages for non-NAI Class B shareholders.
Paramount’s shares have declined 23% over the past year and 27% year to date, though they have risen 2.3% in the last six months.
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