David Ellison: Top Gun Maverick’s Production Company May Take Flight with Paramount’s Deal

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Skydance Media, the production studio owned by billionaire Larry Ellison’s son David, is in advanced talks to acquire a significant stake in Paramount Global. While the exact nature of the deal remains undefined, including whether Skydance and its private equity backers RedBird Capital Partners and KKR will take a majority stake, negotiations between the two sides are progressing rapidly after entering exclusive talks last week.

Should the deal materialize, it would solidify David Ellison’s ascent as a Hollywood power player. For an upstart like Skydance, purchasing a stake in the typically regarded ailing Paramount Global would be a major coup. Skydance would gain ownership of Paramount’s iconic library, encompassing properties like The Godfather and Titanic, the entire CBS brand and its valuable news outlet, several cable channels such as Nickelodeon and Comedy Central, and the Paramount+ streaming service with 67 million subscribers, among other assets. Closing the deal would signify that the wealthy son of the world’s ninth-richest man—who would still provide some of the capital needed to fund the transaction—has truly arrived in Hollywood.

Ellison first entered the movie business as a fresh-faced 23-year-old, whom many studios and executives initially thought they could exploit for his family’s wealth. Instead, he took his inheritance and built a successful company that forged a long-lasting partnership with Tom Cruise, produced dozens of movies, and recently diversified into video games. Now, Ellison is poised to strike a deal for one of Hollywood’s Golden Age remnants in Paramount Global.

The current deal structure would involve Skydance’s contingent acquiring Shari Redstone’s holding company, National Amusements, which controls about 77% of Paramount Global’s voting shares but less than 10% of the total equity. Skydance and Redstone already have an agreement in principle, according to Bloomberg. The deal would see Skydance and its partners pay over $2 billion for National Amusements, effectively giving them control of Paramount. They are also in talks to buy a certain number of common shares. The combined number of shares would give Skydance and its partners control of about 45% to just over 50% of Paramount, according to CNBC.

By Thursday, negotiations between the two groups appeared to be accelerating. Executives from Paramount and Skydance are scheduled to meet sometime next week, while the investment firm RedBird, a media sector specialist, will begin due diligence at Paramount. If the merger with Paramount Global proceeds, the new company would be led by Ellison with a senior role for former NBCUniversal CEO and current RedBird executive Jeff Shell.

David Ellison and Paramount have a long-standing relationship, with Skydance financing and producing several Paramount pictures, including Star Trek and Mission: Impossible movies, in its early days. Eventually, Ellison branched out, founding Skydance in 2010. Since then, the company has produced several major hits, including Top Gun: Maverick and Mission Impossible: Dead Reckoning Part One.

While initially perceived as a wealthy heir, Ellison has shed that image, stating, “There was a period of time where people just looked at us as money, and we knew that. But there has been a shift. Our content, the ideas, the execution, has become more important than our capital.”

Skydance has since expanded into animations, video games, and VR content, attracting top talent like John Lasseter, formerly of Pixar, and securing licenses for major IP franchises like Marvel and Star Wars.

If Skydance succeeds in taking over Paramount Global, it would represent a personal triumph for Ellison and a corporate one for an independent movie studio that entered a deal with a legacy media company as a buyer, not a seller. Typically, successful independent companies have been absorbed by industry behemoths, like Pixar’s acquisition by Disney in 2006.

Whether the Skydance deal represents the best option for Paramount shareholders remains to be seen. Paramount had an independent committee comprising eight of its 11 board members tasked with finding the best possible deal, with three members and another director resigning their directorships on Thursday. Meanwhile, several shareholders oppose the deal, setting up a potential boardroom showdown. If the deal falls apart, Redstone and the Paramount board might have to settle for another offer, such as a $26 billion all-cash bid from private equity firm Apollo.