It seems we are at it again.
Technology companies are moving into the world of media. Hollywood studios, in my view, are aLL going to get swallowed up. In the past, we mentioned how MGM ended up in the hands of Amazon. This is not likely to be the last move.
We nOW have Paramount in the news. This is a company that has fallen on tough times so it is no surprise it is for sale. It is losing money will seeing its bonds cut to junk.
There is an offer on the table which is not the usual deal. In fact, it is rather convoluted.
We also have to be careful in claiming this is Big Tech going after them. That said, it is not far from the Apple tree.
Here is the premise of the deal.
Skydance has made a unique pitch to Paramount Global’s special committee, in charge of accepting or rejecting transactions, and its investors, according to four people familiar with the parameters of the offer. Paramount Global would continue to trade publicly. Skydance would own either a substantial minority stake or a majority stake in Paramount Global by merging its assets and raising new equity, which it would acquire along with its private equity partners RedBird capital Partners and KKR.
Where things get more interesting is in regards to the different players.
The CEO of Skydance is David Ellison. You might not know him as much as his father, Larry Ellison, the founder of oracle.
When it comes to big tech, not much can outpace that company.
This is not a deal that Ellison (the senior) is striking. It appears he is involved.
While Skydance CEO David Ellison is primarily in charge of orchestrating the deal, his father, Oracle
co-founder and Chairman Larry Ellison, would be putting up some of the new funding, said the people. He would also potentially provide Paramount Global with access to artificial intelligence software and other data technology from Oracle.
The last part seems very interesting.
Here we have another example of a legacy company, in an industry that is facing some challenges, which is going to get an overall due to technology. When it comes to AI, Oracle is up there with everyone else.
How this unfolds is speculation at this point. That said, we are seeing some parallels drawn.
In the past decade, Oracle successfully transformed from a legacy enterprise technology company to a cloud services and AI-focused business. That provides a similar thematic blueprint for what the Ellisons would like to do with Paramount Global – a legacy media company that needs to lean into the future to justify its existence.
How Skydance would leverage the Paramount library is guesswork at this point. We can see, however, how the model of Oracle could enter.
To start, cloud means streaming. While Paramount has its own service, it probably will be on steroids once Skydance is involved. Here is where we move from a movie studio playing with tech to a technology company focusing on entertainment.
There is a big difference.
Skydance is a media company in hits own right. They do not approach the market the same as the legacy companies. Gaining access to Paramount's library could be huge. Also included in the deal with be CBS.
It will be interesting to see how this one progresses. This is a bit different than the deals we saw or proposed in on here. If it weren't for the ties to Larry Ellison, it might not be much of a story. This factor makes it a bit more intriguing.
We will see how it all transpires. The media world is changing a great deal. Paramount might be the next one to undergo a major transition.
