Media

Paramount not expected to reach deal with Skydance by 30-day deadline: report

Paramount Global’s exclusive talks with Skydance Media are not likely to result in a deal, according to a report.

Paramount, home of Paramount Pictures, MTV and CBS, entered into a 30-day period of exclusive talks with Skydance, which has produced blockbusters for Paramount like “Mission: Impossible — Dead Reckoning,” and “Top Gun: Maverick.

The two companies will not likely strike a deal by May 3, which is when the exclusive window expires, CNBC’s David Faber said Wednesday.

A deal between Paramount and Skydance will not likely be reached before the end of the exclusive window, CNBC said. Getty Images

“They are not going to have a deal done by then,” Faber said on the business network. “I don’t think the market expected that that would be the case. It’s going to take more time than that, and it may be more twists and turns from here.”

Faber added that Skydance, which is led by CEO David Ellison, son of Oracle co-founder Larry Ellison, believes there could be as much as $3 billion in cost-cutting in a possible combination with Paramount.

Paramount declined to comment. Skydance did not immediately return requests for comment.

Paramount shares closed up 3.6% at $10.81 on Wednesday.

Controlling shareholder Shari Redstone has come under fire for negotiating a deal that just includes selling her stake in Paramount-parent National Amusements, the privately held company that owns almost 80% of the voting shares of Paramount Global, for around $2 billion.

Shari Redstone is under fire from Paramount Global shareholders for entering into exclusive talks with Skydance. Getty Images

Such a deal would likely not give a premium to shareholders who owned voting stock to the dismay of Paramount investors. In recent days, shareholders have come out against the deal.

Last week, The Post reported that Wall Street titan Mario Gabelli — whose firm through super voting shares and common Paramount stock is the second leading voting shareholder next to Redstone — said he’d “rather see no sale.”

“I’m a firm believer in what [Paramount Global CEO Bob] Bakish is doing and I think he can pull it off and the stock will be worth substantially more,” Gabelli said, of the exec’s turnaround strategy.

“The notion of National Amusements getting a premium for their voting stock is totally warranted,” Gabelli told The Los Angeles Times last week. “The question is how much. My clients want to be treated the same as the voting stock. All voting stock should be treated equally.”

David Ellison is hoping to strike a deal with Redstone for her stake in Paramount Global-parent National Amusements. AFP via Getty Images

Gabelli also came out against a $26 billion offer by private equity firm Apollo Global Management

Other shareholders begged Redstone to consider that deal, however.

Calling a potential deal with Skydance “detrimental,”Matrix Asset Advisors said it was “especially galling” that the Paramount board has not seriously considered Apollo’s offer due to reported concerns about deal financing.

Skydance has produced blockbusters for Paramount like “Mission: Impossible — Dead Reckoning,” and “Top Gun: Maverick.” Rafael Henrique/SOPA Images/Shutterstock

Like Gabelli, Matrix, and others worry about dilution in a deal that rewards Redstone at the expense of Class B shareholders.

“My expectation in some ways is that the special committee is going to look for some sort of compensation for the B shareholders,” Faber said on CNBC. “I don’t know what it would be, but there’s got to be an expectation that this thing gets one more turn before they finally figure out if they can get there or not.”