Skydance’s Proposed Deal With Paramount Global Appears To Be Falling Apart

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After months of M&A talks, Paramount Global and controlling shareholder Shari Redstone might be going it alone after all — for now.

Insiders tell that the expectation at the company is that neither of the two offers in play — Skydance Media-RedBird Capital Partners and Sony Pictures Entertainment-Apollo Global Management — will come to fruition. And Redstone is said to have reluctantly concluded that a deal with David Ellison’s Skydance, a longtime partner of Paramount Pictures, will not be possible.

As of Friday morning, the special committee established by Paramount Global’s board to evaluate M&A proposals had not notified Skydance one way or the other about its best and final offer, which would involve Skydance acquiring Redstone’s National Amusements Inc. and merging Skydance and Paramount Global, per a source familiar with the talks. The exclusive negotiating window between Skydance and the Paramount Global board’s special committee established to review M&A offers is set to expire at midnight Friday.

Meanwhile, the Paramount board’s special committee will review the joint Sony-Apollo offer, floating a $26 billion all-cash buyout premium, after the May 3 expiration of the Skydance negotiating window. But that may be so the board fulfills its fiduciary duty to consider all credible M&A proposals. Insiders expect the proposal to ultimately be a deal-breaker, given anticipated regulatory hurdles required to complete such a transaction.

Moreover, Redstone — who has final say-so over what deal to accept — is known to be loath to sell her family’s media company to a private-equity-backed buyer. Those familiar with Redstone’s thinking say she remains open to any deal that’s in the best interests of shareholders and that she supports the Paramount special committee’s review of the Sony-Apollo overture. That said, the Sony-Apollo offer appears more attractive to Paramount Global’s Class B (nonvoting) shareholders than the Skydance deal. If the Sony-Apollo offer is deemed unworkable, the most likely outcome is that Paramount Global will not proceed on either front given the threat of investor legal action were the company to move forward with Skydance.

Reps for Paramount Global, Skydance and National Amusements have declined to comment, as has a spokesman for the Paramount board’s special committee reviewing M&A offers. Reps for Apollo and Sony have not responded to requests for comment.

The situation remains fluid, and no definitive decisions have been made about Paramount or Redstone’s next moves.

But if the M&A talks are abandoned, Paramount Global would indeed be run for the foreseeable future by the three-headed “Office of the CEO” — CBS’s George Cheeks, Paramount Pictures’ Brian Robbins and Chris McCarthy, head of Showtime/MTV Entertainment Studios and Paramount Media Networks — after Bob Bakish was shown the door. The trio have told employees they’re prepping a “long-term plan” for Paramount Global. As part of cutting the company’s debt load, insiders speculate that strategic plan might include selling BET Media Group (which media mogul Byron Allen has expressed interest in acquiring) and the famed 62-acre Paramount Pictures Studio lot on Melrose Avenue in L.A. The go-forward strategy might also see the company try to combine the Paramount+ streaming service with NBCUniversal’s Peacock in some way.

At this point, Paramount Global is preparing “to go it alone,” LightShed Partners analysts Rich Greenfield, Brandon Ross and Mark Kelley speculated in a blog post Friday. “While Skydance could come back later in 2024 or next year, we sense National Amusements sees too many legal headaches with proceeding, given the special committee’s view of the proposed transaction.”

Regarding the Sony-Apollo bid, the LightShed analysts noted, “National Amusements does not want to see a breakup of the company and can stop any transaction they do not desire.” They suggested that regulatory approval of such a deal, given restrictions on studio and TV station consolidation and foreign ownership, would take at least 12 months “and potentially far longer if the administration turns over in November.”

Skydance Media Exclusive Talks With Paramount Global Conclude As Apollo And Sony Make Bid To Acquire The Company

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Skydance Media is prepared to walk away from its offer for Paramount Global unless it receives a firm commitment from controlling shareholder Shari Redstone, following the latest offer from Apollo Global Management and Sony Pictures, according to a person familiar with the matter.

The exclusivity window for discussions between David Ellison's Skydance, backed by private equity firms RedBird Capital and KKR, and Paramount ends Friday and won't be extended, people familiar with the matter mentioned Paramount shares rose following the report.

The consortium has been waiting for word from Paramount's special committee on whether the panel will recommend its bid to acquire the company to Redstone. Now, with Apollo and Sony formally expressing interest in acquiring the company for about $26 billion, the Skydance group is looking for Redstone to reaffirm her commitment to the deal.

The Skydance consortium is not keen to hang around to be a stalking horse offer for Apollo and Sony, one of the people said. Still, depending on what Redstone says, Ellison may be willing to work with her, a second person said.

Spokespeople for Skydance, Redstone's National Amusements and Paramount's special committee declined to comment on Friday.

Apollo and Sony made their latest offer Thursday, CNBC previously reported. The special committee is currently considering the bid, the people said.

As part of Skydance's latest deal on the table, Redstone may take less than $2 billion for her controlling stake in Paramount, which is lower than Skydance's initial offer. The consortium is contributing additional capital to pay common, Class B shareholders at a nearly 30% premium to the undisturbed trading price of about $11 per share. In total, Redstone and Skydance would contribute $3 billion, with the vast majority going to Class B shareholders, according to people familiar with the matter.

Skydance's valuation as part of the deal remains around $5 billion, the people said. It's unclear if the Apollo-Sony offer gives Redstone the same premium.

Previously, Redstone rejected an offer by Apollo in favor of exclusive talks with Skydance. Redstone has preferred a deal that would keep Paramount together, as Skydance's offer would. A private equity firm is likely to break up the company.

Development Alert: Danilo Carrera And Isabella Castillo Will Be Protagonists Of Telemundo's Upcoming Telenovela Thirst For Vengeance (Sed De Venganza)

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Telemundo Studios announced its next original production, Sed de Venganza, which will begin filming at the state-of-the-art Telemundo Center studios in Miami this summer. This new drama follows the life of Fernanda Ríos, a beautiful and resourceful woman determined to escape the terrible abuse she experienced in her childhood. 

Thirst for Vengeance is a series written by Eric Vonn, directed by Camilo Vega and Miguel Varoni, under the executive production of Ximena Cantuarias and Rafael Uriostegui. Danilo Carrera (Dangerous Liaisons) and Isabella Castillo (The Lord of the Skies, Malverde: The Patron Saint) will lead an all-star cast for this fascinating story of revenge, love and deception. 

Sed de Venganza marks the first leading role for both actors in a Telemundo series. 

Ronald Day, President of Entertainment and Chief Content Officer of Telemundo, said they are focused on creating high-quality Spanish-language content made by Hispanics, for Hispanics. "The stellar cast, led by talented actors Danilo and Isabella, along with our exceptional teams behind the cameras, will undoubtedly bring this series to life in true Telemundo style." 

Thirst for Vengeance, an unforgettable new drama, follows the life of Fernanda Ríos (played by Castillo), a beautiful and resourceful woman determined to escape the terrible abuse she experienced in her childhood. However, her plans go awry when deception and blackmail lead her into the dark world of Eugenio Beltrán. A spiteful and cruel businessman who has sworn revenge on the Del Pino family, it is Fernanda who must execute Eugenio's nefarious plans. To complicate things even more, Fernanda finds love with Francisco (played by Carrera), a young man whose life she destroyed in the past and who, when she confirms that she is the culprit of everything, will dedicate herself to satisfying her infinite " Thirst for revenge. 

Jeepers: ‘Scooby-Doo’ Live-Action Series From Berlanti Productions Lands At Netflix With Major Commitment

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The one-hour drama project is said to be nearing a deal at the streamer with a script-to-series commitment. Exact plot details are being kept under wraps aside from the fact it will be based on the Hanna-Barbera cartoon. Warner Bros. Television will produce, with the studio having recently launched the “Dead Boys Detectives” series at Netflix.

Josh Appelbaum and Scott Rosenberg serve as writers and will also executive produce along with André Nemec and Jeff Pinkner under their Midnight Radio banner. Greg Berlanti, Sarah Schechter, and Leigh London Redman will executive produce via Berlanti productions (the company is currently under an overall deal at WBTV). Jonathan Gabay of Berlanti Productions and Adrienne Erickson will co-executive produce.

Reps for both Netflix and WBTV declined to comment.

Should the project go forward, it would not be the first live-action Scooby-Doo project to make it to the screen. Most famously, “Scooby-Doo” was released in 2002 and starred Freddie Prinze Jr., Sarah Michelle Gellar, Matthew Lillard, and Linda Cardellini, with Neil Fanning voicing Scooby. The film was a box office success, generating over $250 million worldwide. A sequel with the same cast, “Scooby-Doo: Monsters Unleashed,” came out in 2004 and grossed over $180 million. There was also the live-action TV film “Scooby-Doo! The Mystery Begins” and its sequel that were released in 2009 and 2010.

There have also been a wide range of Scooby-Doo animated projects over the years, beginning with the original cartoon series in the late 1960s. Various incarnations have followed over the years, spanning multiple animated series and films. Most recently, the animated film ““Scoob! Holiday Haunt” was meant to be released on Max but was scrapped in a cost-cutting move. Currently, Max airs the animated series “Velma,” with Mindy Kaling voicing the bespectacled member of the Mystery Inc. gang.

Canal+ Owner Vivendi Is Still Exploring A Stock Split, Publishes First Quarter Revenue

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Canal+ owner Vivendi is still exploring a stock split, as it today posted first quarter revenues up significantly.

France-based Vivendi posted Q1 revenues of €4.28B (R86 billion), up 5.4% on 2023’s numbers when using constant currencies and and the businesses the firm owns today. No earnings were revealed in the unaudited numbers.

Within those numbers, Canal+ saw revenues grow 4.3% year-on-year to €1.5B (R30 billion, +3.5% at constant currency and perimeter). International revenues were up 5.8% thanks to subscriber growth, particularly in Africa, where Canal+ has been buying up shares in MultiChoice and looks set to take over the South African giant. Mainland France TV operations revenue was up over 5%.

However, Studiocanal saw revenues decline compared with 2023, when the likes of Alibi.com 2 and John Wick 2 had significant domestic and international launches.

Other notable performances saw social video platform Dailymotion increase revenues by 24.8%, with the ‘New Initiatives’ division it is housed in posting €42M in revenues overall.

This financials come amid a period of corporate soul-searching at Vivendi, and following the takeover of publisher Lagadère in November last year.

The Paris-based company believes its stock price has been “substantially” reduced due to the consolidated nature of its media operations following the listing of Universal Music Group and wants to split its business.

Having already outlined a plan to explore dividing pay-TV and content giant Canal+, ad firm Havas and publisher Lagadère, Vivendi said a feasibility study into a stock split had been going since December 2023. The company says all three units are individually performing well — with each posting year-on-year revenue growth today — and have been hindered in their ability to invest by the “high conglomerate discount” on its shares.

The current plan is for Canal+, Havas and a publishing and distribution division would all list as independent entities on the stock market. Vivendi would also remain publicly listed “maintaining its role of supporting the transformation and expansion of its subsidiaries and continuing to actively manage its investments.”

Should the Vivendi board approve the split, employee representatives at each new entity would be engaged before necessary regulatory, bonder holder and other lender approvals is sought. A final vote would then take place at the AGM in April 2025 to ratify the moves.

Yannick Bolloré, Chairman of Vivendi’s Supervisory Board, and Arnaud de Puyfontaine, Chairman of Vivendi’s Management Board, said in a statement: “Today we are publishing a particularly sharp increase in revenues for a first quarter. This reflects the strength of our three core businesses and the Group’s ability to transform and grow.

“The organic growth of 5.4% compared to the first quarter of 2023 was notably driven by the significant contribution of Lagardère, validating the relevance of the transaction with this group last November and our confidence in the potential of its activities. Canal+ Group and Havas also delivered solid performances, with increases in reported revenues of 4.3% and 6.2%, respectively, over the same period.”

Paramount Global’s Board Is Preparing To Fire CEO Bob Bakish As Soon As Monday Morning,

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The board is expected to lean on company division heads in lieu of a CEO while it negotiates a possible merger with Skydance Media. Paramount Global has set up a special committee to explore the deal. The companies are in exclusive talks to pursue a deal until May 3, though that window could be extended.

Bakish has lost the trust of Paramount Global controlling shareholder Shari Redstone, according to people familiar with her thinking. Redstone wanted to make a move to oust Bakish before Paramount Global’s carriage negotiation with Charter Communications, which is pivotal for setting a value for the company in its merger talks with Skydance, the people said.

A spokesperson for Paramount Global declined to comment.

Paramount and Skydance have been making headway on a final deal, under which Bakish would leave Paramount, reported Thursday. Skydance intends to name its CEO David Ellison to helm Paramount, according to people familiar with the matter.

In private, Bakish has dissented against the merger, claiming that it could dilute common shareholders, according to people familiar with the matter.

Under the deal terms, almost 50% of the merged company would be owned by Skydance and its private equity partners, reported April 5. Common shareholders would own the remainder of the company, which would continue to trade publicly.

Spoilers: Velma Likely Cancelled On Max Following Season 2 Finale

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Velma is an American adult animated mystery television series based on the character Velma Dinkley from the Scooby-Doo franchise. Developed and created by Charlie Grandy for HBO Max, it stars executive producer Mindy Kaling as the voice of the titular character, with Sam Richardson, Constance Wu and Glenn Howerton in supporting roles. 

The series revolves around Velma Dinkley and the other human members of Mystery Inc. before their official formation, making it the first television series in the franchise to not feature the character Scooby-Doo.

Since its inception, Velma had received mixed reviews from critics, who praised the voice acting and animation, but were divided towards the humor and criticized its meta storytelling , characterization, writing, and departures from the traditional Scooby-Doo format. 

Despite the massive backlash that the show has taken, Velma was Max's most-watched animated original show in 2023. The [hate] streaming was probably what contributed to a second season and the fact most programs from the Scoobiverse are two seasons long.

Max released the second season of Velma which too was dismayed by Scooby-Doo fans for its directionless storyline and puns inserted throughout but what caught the attention was the season 2 finale which welcomed back a classic character, Scrappy-Doo.

SPOILERS

Like the other characters that first got their start in Scooby-Doo, Where Are You?, Scrappy isn't like the original iteration of the talking puppy. In Velma, Scrappy is created as a part of "Project Scooby" by the military in an effort to infiltrate "meddling kids".  

Unfortunately for the government, their experiment falls out of their control and Scrappy begins going on a murder spree for all those responsible for the project. For those looking for more spoilers, season two ended with quite the bang. 

Scrappy attempts to kill Velma and company, only to be killed himself as the titular character becomes a ghost and takes control of his body. Velma is left deceased when the season two finale comes to an end with no third season confirmed.

But judging by the finale, it wouldn't seem far fetched if the show had concluded with this episode. Considering all the hate Velma got, Scrappy-Doo kind of redeemed himself after serving as one of the most disliked characters in the franchise. 

Development Alert: Dora Renewed For Season 2 On Nick Jr. And Paramount+

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Paramount+ has renewed the animated preschool series Dora for a second season. The iconic Latina heroine returned this month in the CG-animated revival series produced by Nickelodeon Animation. 

Dora, based on the original series Dora the Explorer, follows everyone’s favorite bilingual explorer, Dora (Diana Zermeño), and her best monkey friend, Boots (Asher Colton Spence) as they embark on epic adventures in a fantastical rainforest. Guided by trustworthy Map (Anairis Quiñones), Dora and her friends must work together to overcome many obstacles while being challenged by the sneakiest fox, Swiper (Marc Weiner). Kathleen Herles, the original voice of Dora the Explorer, voices Mami.

“Kids and family programming is consistently one of the most popular genres on Paramount+ and we’re thrilled that our audience has already embraced Dora,” said Jeff Grossman, Executive Vice President, Programming, Paramount+. “It’s an incredible opportunity to introduce this beloved character and iconic franchise to a whole new generation.” 

Dora is currently available to stream exclusively on Paramount+ in the U.S., Canada, the U.K., Australia, Latin America, Italy, Germany, Switzerland and Austria, and also on Nick Jr. internationally.

Dora is produced by Nickelodeon Animation in Burbank, California, and created by Chris Gifford and Valerie Walsh Valdes. Chris Gifford, Valerie Walsh Valdes and Rich Magallanes serve as executive producers. Henry Lenardin-Madden serves as co-executive producer, and Alejandro Bien-Willner serves as story editor. Marielle Kaar is Nickelodeon’s Executive in Charge of Production for the series. Dora the Explorer was created by Chris Gifford, Valerie Walsh Valdes and Eric Weiner.

“Our audiences have embraced the new Dora series with open arms, and it’s incredible how she continues to capture the imaginations of preschoolers around the world with her extraordinary rainforest adventures,“ said Ramsey Naito, President, Paramount Animation and Nickelodeon Animation. “We can’t wait for kids to discover all of the new fantastical places and colorful characters in the second season while learning and playing along with their good friend Dora.”

The Canal+/MultiChoice Effect: Sony Reportedly In Talks To Join Bid With Apollo To Acquire Paramount Global

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Even as Paramount Global continues to hold exclusive talks with David Ellison’s Skydance and Gerry Cardinale’s Redbird Capital, another potential buyer group is considering its own moves.

It has been confirmed that executives at Sony Corp., including Sony Pictures chief Tony Vinciquerra, have been in touch with Apollo Global Management about making a joint bid for the entertainment company.

Apollo had previously made a $26 billion offer for Paramount, inclusive of equity and debt, though it was reportedly dismissed. But partnering with Sony would likely eliminate any cash or financing concerns.

The New York Times first reported the Sony talks, adding that no offer has been made, given that the exclusive negotiating window is still in place. The Times reported that one structure under consideration would see Sony and Apollo effectively take Paramount private, with Sony owning a majority of the company, with Apollo operating as a minority owner..

The actual structure of the deal is not clear, though the Paramount film and TV studios would likely fit in nicely with Sony’s own studios. It would raise questions about both Paramount+, given Sony’s decision to avoid entering the streaming wars, as well as Paramount’s linear TV assets, including CBS. There are federal regulations restricting foreign ownership of U.S. broadcast stations, and as a Japanese company Sony could face scrutiny under such rules.

Meanwhile, the talks between Skydance and Paramount continue, with a source saying that the Ellison-led company has articulated a plan to deliver operating efficiencies, and to leverage the executive teams at both Skydance and Redbird (including former NBCUniversal CEO Jeff Shell), to help turn Paramount around. Paramount would remain a public company under the Skydance deal.

Some investors have complained about the decision not to pursue the Apollo deal, given the all-cash offer.

Shares in Paramount rose in after-hours trading, after reports about the talks were published.