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EXCLUSIVE: Sony will not be among the rivals trying to shore up a better offer during Paramount Global’s “Go Shop” period following the $8 billion bid from David Ellison’s Skydance Media, according to sources tonight.
This news formally nullifies the only other confirmed bid on the table to acquire Paramount.
Sony and Apollo jointly made a preliminary offer of $26 billion after a solo bid from Apollo was rejected. They then signed a nondisclosure agreement and began due diligence shortly after Paramount’s exclusive negotiating period with Skydance ended.
After a thorough review of its books and consideration of potential regulatory issues, Sony refined its offer. But foreign ownership rules in broadcasting and doubts about federal regulators allowing two other major Hollywood studios to merge still hung over any deal, as they do today.
Paramount has 45 days – through Aug. 21 – to consider other offers, with two 90-day extensions thereafter if good faith negotiations result in a deal that is better than what Skydance is offering. If Paramount decides to accept another offer, it will pay Skydance a $400 million termination fee.
A special committee of Paramount Global’s board of directors will evaluate any new offers and determine whether a deal would fail to pass muster with federal regulators.
Barry Diller and his company IAC remain as a potential buyer.
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Edgar Bronfman Jr. was also interested. One difference now is that any new proposal would have to be for all of Paramount, not just Shari Redstone’s controlling interest in the company, held through National Amusements. That would eliminate other parties, such as a consortium led by Steve Paul, that had been interested in buying National Amusements.
Sony was essentially after the Paramount studio, with plans to axe the more burdensome parts of the conglomerate—i.e., CBS, linear channels like MTV, and the Paramount+ streaming service—by auction. Some in the industry at the time believed Apollo was eyeing Paramount’s Melrose lot in Hollywood as a real estate development. Suiting firms, talent reps, filmmakers, and content creators around town were sweating at the prospect of losing another major Hollywood studio after 20th Century Fox was swallowed up by Disney three years ago. The whole idea of breaking up Paramount, we’re told, didn’t exactly convince the Shari Redstone team.
Additionally, the show worried that a Sony-Paramount merger would lead to a decline in the number of films overall, despite some insiders telling Deadline that the idea was to maintain both labels’ theatrical output in order to compete with streaming and other studios.
Requests for comment to Sony were not responded to.