Let The Shell Game Begin

Our long national nightmare–well, at least the one that may have been keeping Shari Redstone’s now-former employees awake–is over.  UPI’s Paul Godfrey was among the many that broke the news earlier this morning:

Paramount Global, the owner of Paramount Pictures, CBS television, Comedy Central, Nickelodeon and MTV said Monday it had accepted a $8 billion takeover bid from U.S. independent film, animation and gaming production company Skydance.

A special committee of the Board of Directors of the NASDAQ-listed Paramount Global confirmed that after a six-month search for a buyer, it had unanimously approved a merger agreement between Paramount and Santa Monica, Calif.,-based Skydance Media, Paramount said in a news release.

Under the agreement, Skydance which is owned by David Ellison, son of Oracle founder Larry Ellison, and Red Capital, will inject around $8 billion into Paramount, including paying $2.4 billion for parent company National Amusements and $1.5 billion in capital to create “New Paramount,” billed by Skydance as “a next-generation media and technology leader.”

And while the fine print does note that the previously reported 45-day “go shop” period where the parties can entertain alternatives to what was set into something close to stone (rock?) yesterday, DEADLINE’s Anthony D’Alessandro reported this morning that in parsing Sharileh’s evening missive to her minions, it’s essentially a fait accompli:

Good evening. Just moments ago, it was announced that we have entered into an agreement under which Skydance Media will acquire National Amusements and merge Skydance’s business with Paramount Global. I wanted to take this opportunity to reach out to you directly not only to share the news, but to express my tremendous gratitude to each and every one of you for what we have been able to accomplish together for the past several decades.

The agreement we entered into today is subject to closing conditions, and we expect the deal to be completed in the first half of 2025. Until then, George, Chris, and Brian will continue to lead the Company, and they will be sharing more with you shortly. I of course will also be here to cheer you on, and assist in any way that I can. It has truly been my honor to work with all of you these past several years, and to see so many of our dreams come to fruition. I want to express my deepest thanks to you for your commitment, hard work, and most importantly your support of my family and me.

Not quite as memorable a farewell address as Douglas Macarthur’s, but what the heck, at least it seemed ingenuous.  And, at least in her mind, final.

So now the Skydance era begins and with all due respect to the reality that David Ellison and his family will be bringing the creative chops and, of course, the cache to the table the de facto task of trying to restore the amalgamation of glory legacy brands like Paramount Studios, CBS and MTV Networks to a level that will allow some of the 46% year/year loss in stock value to recover will fall squarely on the shoulders of Jeff Shell.  And indeed Shell’s already making his presence known.  As this musing was being composed THE WRAP’s Lucas Manfredi reported that the dynamic duo has already given this more than a smattering of thought:

On a conference call with investors, the pair said they would “rebuild” the Paramount+ platform to increase time spent and reduce churn and utilize artificial intelligence to turbocharge content creation capabilities that improve overall productivity and lower cost. They also plan to leverage Skydance and Paramount’s combined portfolio of animation and sports content.

“The key thesis behind this transaction is our desire to inject Skydance as a pure play content company, to double down on Paramount’s prowess as one of the world class storytelling enterprises and also ensure the company is positioned to be able to expand into a tech hybrid to be able to transition to meet the demands and needs of the evolving marketplace,” Ellison said.

“It’s been a long time since a creative executive ran a one of the big Hollywood companies. And I think it’s really important when creative is the core working with artists as the business staff,” Shell added.

Methinks Shell is being a tad too modest and quiet.  I saw first-hand his deference to creatives during the four years I was blessed to be in his orbit.  He will be one of the first to admit his tastes are a tad eclectic and never gave any notes of consequence to anyone.  But not a single decision on greenlighting was made without his approval and his informed judgement that they were risks worth taking, spin and passion be damned.

And don’t anyone even try and put a number by him that you haven’t triple checked for its accuracy and context.  He has a remarkable ability to retain key data points and will consistently test you on making sure you’re at least as facile as he is on the ones germane to your area.  And if you happen not to be, he will not hesitate to solicit input from others to serve as a sounding board, and pretty soon you’ll find yourself being forced to work with that colleague.  And judging by what Manfredi added as other key points from this morning’s call, any such pairing might be temporary at best:

The executives have identified $2 billion in cost efficiencies and synergies as they look to manage Paramount’s declining linear business. Paramount is expected to reach $3.4 billion in EBITDA and produce $2.8 billion of revenue in 2025, $4.1 billion in EBITDA, $2.5 billion of revenue and return to investment grade status with all credit rating agencies in 2026 and deleverage from approximately 4.3 times to 2.4 times by 2027.

So were I anyone in a key position anywhere within Paramount Global, I’d get as familiar with Shell’s legacy and playbook as possible.  He relocated to Europe when he joined Comcast and learned who were the key international players and what translated best globally.  He championed one Bela Bajaria, who built Universal’s global footprint and eventually took her talents to Netflix, where her acumen and leadership has been integral to their overwhelming success.  He integrated the Sky News operation he became familiar with at FOX and more fully integrated it into NBC News to reinforce its European content and appeal.   And he further grew the digital footprint of that brand by taking talent from its owned-and-operated stations–most notably, its Miami and Washington outlets, not New York or Los Angeles, and built up an impressive roster of the next generation of talent and distribution in the successful launching of NBC NEWS NOW.  So you hard-working journalists at, say, KTVT or WWJ–take heart.

I’m not blind to the reality check these are nerve-wracking times for many.  And I really don’t relish the idea that a lot more talented people may find themselves on the outside looking in.  And no, I don’t expect any calls myself any time soon.  The most I can offer is sage advice, and an assurance that far better times are more than likely ahead for those who are able to play the Shell game successfully.

I mean, look what you’ve survived?

Until next time…

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