Media mogul Shari Redstone is negotiating to sell a majority stake in National Amusements, the parent company of the sprawling news and entertainment empire that includes the Paramount film studio, CBS and MTV, three people familiar with the talks say.
In recent weeks, National Amusements has been in discussions with Skydance, the media and entertainment company founded by David Ellison, son of billionaire Oracle founder Larry Ellison. It is unclear whether an agreement will be reached and the value the talks place on Ms. Redstone's share could not be determined.
If a deal goes through for Paramount, it could be the start of a far-reaching shakeup of the media industry next year. Comcast, the television and cable giant that owns NBCUniversal, is looking for deals. In fact, Warner Bros. Discovery, the owner of HBO and CNN, is coming to market next year for obscure tax reasons.
Ms Redstone, 69, who fought a bitter battle with her former allies for control of the company, now appears to be seriously considering giving it up. It has persevered for years despite major headwinds from the traditional media industry, but is now considering its options as a serious suitor has expressed interest, two of the people said. Ms. Redstone's holdings are under economic pressure, including long-term debt and the unreliable advertising market for media companies like Paramount.
Puck previously reported that Ms. Redstone and Skydance were in discussions. Spokespeople for National Amusements, Ms. Redstone and Skydance declined to comment.
A deal for Ms. Redstone's stake in National Amusements would mark a major changing of the guard in the media business. Paramount has been owned by the Redstone family for decades, ever since Ms. Redstone's father, the belligerent dealmaker Sumner Redstone, won the company in a hard-fought bidding war that included heavyweights like billionaire Barry Diller.
Paramount, with its bundle of cable channels, a film studio and its CBS broadcast network, has long been considered a takeover target. Ms. Redstone began discussions about a deal with parties including tech companies such as Amazon, Apple and Netflix earlier this year, according to two people familiar with the matter.
The feverish deal-making that appears set to overwhelm the industry has been sparked in part by the slow decline of television. For years, TV companies like Paramount benefited from ever-increasing payments from cable providers. But in recent years, the cable TV business model has begun to collapse as consumers ditched their cable subscriptions and switched to streaming services like Netflix, leaving traditional TV programmers looking for an exit.
Even streaming, once seen as the savior of the media business, is starting to show signs of strain. Old-school TV companies like Paramount, NBCUniversal and Warner Bros. Discovery are investing billions of dollars to build streaming services to take on Netflix, but so far no company has managed to replicate cable TV's gains.
Ms. Redstone is advised by BDT & MSD Partners, a merchant bank founded by Byron Trott, a former Goldman Sachs partner who advises some of America's wealthiest and most well-connected family business owners. Earlier this year, BDT & MSD Partners announced it was taking a $125 million stake in National Amusements to help the parent company pay off its loan obligations.
Late last year, Ms. Redstone owned a controlling interest in National Amusements. In a filing in February, Paramount said National Amusements owned, directly or indirectly, approximately 77.4 percent of Paramount's Class A voting common stock.
Founded in 2010 by David Ellison, Skydance has grown into one of Hollywood's leading independent studios. It has a long-standing relationship with Paramount, producing hits such as Top Gun: Maverick and Mission: Impossible – Dead Reckoning.
Skydance is backed by Redbird Capital Partners, a private equity firm that is one of the most active in the media industry. Redbird is also backing RedBird IMI, the company run by former CNN boss Jeff Zucker, which is seeking a deal for British newspapers The Telegraph and The Spectator.
Leaving Paramount would be a significant step for Ms. Redstone, who struggled to maintain control of her family as her father's mental capacity declined. In 2018, CBS — then led by Les Moonves — sued Ms. Redstone to wrest control of its media assets from her, but Ms. Redstone ultimately prevailed. Mr. Moonves, who faced a series of sexual harassment allegations, was fired by CBS in 2018. He has denied allegations of non-consensual sexual relationships.
Although Paramount's value has steadily declined in recent years – consistent with the general fortunes of traditional media – investor speculation about a deal with National Amusements led to a surge in the company's shares this month. Although its flagship streaming service Paramount+ continues to lose money, Paramount said earlier this year that it had reduced its losses for the service while continuing to add new subscribers.
Rachel Abrams contributed reporting.