International TV Co-Editor

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Paramount and Skydance are getting married

Sneezing and a cold: When the US sneezes, the world catches a cold, we’re told, but things could be more complicated when it comes to the Skydance-Paramount deal. Our learned business gurus in the US have been busy over the past week or so bringing you all the twists and turns of the proposed $8 billion deal. David Ellison, who returned to the M&A altar with Shari Redstone last week after initially backing out, has been busy plotting a path forward. Ellison, Jeff Shell and RedBird Capital have been trying to seduce Wall Street in recent days, my colleague Jill Goldsmith writes, pointing to $2 billion in ongoing cost synergies and a streaming breakeven in 18 months or sooner if a partner emerges. It’s worth remembering that Paramount has already been dealing with budget cuts and layoffs over the past year or so. There is now technically a few weeks’ window in which Paramount could consider other offers, but Sony won’t be one of them, as we’ve just revealed. Shell will oversee the combined company under Ellison. RedBird’s $1.8 billion cash injection into the deal will be Gerry Cardinale’s biggest investment ever. Co-CEOs Brian Robbins, George Cheeks and Chris McCarthy will continue to steer the ship for now, at least on paper, while the regulatory hurdles are cleared. One US industry source told me that the slow pace of regulation means that by the time the deal is done, the landscape could be unrecognizable. “How do you make a five-year plan when the world changes every six months?” they asked. On paper, the buzz around the deal has been quietly positive so far, ranging from ratings agencies to Hollywood executives to Top Gun star Tom Cruise.