In the end, all it may have taken was David calling Tyler.
The merger of Shari Redstone’s famed and fading Paramount media empire with Hollywood studio Skydance may finally be signed, but it’s not yet completely sealed – and it’s worth asking about the chances it could blow up yet again before the ink is dry.
Last month, after Redstone seemingly killed the tie-up after months of off-again, on-again talks, SkyDance chief David Ellison called Shari’s son Tyler Korff in an effort to make peace with the family and get the negotiations back on track, and it apparently worked, On The Money has learned.
It hasn’t been widely publicized, but Korff, a lawyer and rabbi, for years has been helping his mother run the media empire she inherited from her dad, the famously mercurial media mogul Sumner Redstone – who of course was also Tyler’s grandfather.
Korff has been a key adviser to his mom during the months-long process with Skydance. He was at the meeting with Ellison last December where the deal was first hatched – a complex transaction for SkyDance to take control of Paramount through buying the family’s stake in its holding company, National Amusements.
In an odd twist, the deal also includes Skydance infusing billions of dollars into Paramount so it can effectively buy Skydance, a boutique studio Ellison created with the help of his dad Larry Ellison, the Oracle founder who’s currently worth $177 billion, according to Forbes.
Indeed, insiders tell me this is a true family affair, where Korff – a 39-year-old heir to a media empire – and Ellison – the 41-year-old scion of a Silicon Valley icon – forged an interesting relationship during the deal drama: The pair personally hit it off, I am told, which helped keep the deal alive despite all the drama.
Still, with family drama there is always a chance that things get messy – and they did. Shari and Tyler weren’t crazy about giving up the family business and handing Sumner’s legacy over to an upstart producer (“Top Gun: Maverick” is among Ellison’s credits).
Also helping run the show would be RedBird Capital, a private equity firm headed by media banker Gerry Cardinale, who provided Ellison with some of the cash and new management chops. Cardinale is slated to be on the new company’s board. Jeff Shell, the longtime NBCUniversal chief who works with Cardinale at RedBird, as I reported, will play a top role in what used to be the Redstone family business.
Conversely, the current management assembled by the Shari team would be gone. Shari is at the Sun Valley confab in Idaho this week, and it could be her last appearance as a media titan before she becomes just another semi-rich person.
Tough stuff to swallow. But there’s a certain reality to the media industry now that wasn’t the case when Sumner was cobbling Paramount together in the 1990s: It sucks.
Yes, Paramount has great legacy assets: A big studio, the CBS network, sports programming, MTV, BET. But take a look at its balance sheet and you see that in an era of cord cutting, they’re all melting ice cubes, losing viewership rapidly and with that ad dollars. Paramount-plus streaming is a tough business; people don’t go to the movies as much as they used to.
The fact is, the family’s wealth is wilting away and Ellison has the money to preserve it.
Meanwhile, as the fraught deal negotiations dragged through the winter, into the spring and then summer, something significant fell through the cracks: Money. Shari is looking to preserve family wealth and she thought she was getting hosed by the suits on the other side, expecting close to $2 billion for her controlling shares in Paramount, while Skydance-RedBird thought she was OK with something closer to $1.7 billion.
When she saw the fine print last month, just as final approvals were being consummated, she balked, making it clear she was unhappy about being short-changed, I am told.
That’s where David Ellison and Tyler Korff came in. Ellison was conferring frantically not only with Cardinale but also his father, who knows a thing or two about deal making. So he began re-opening the dialogue with the 39-year old Tyler and then his mom, and compromises were made.
The upshot: The payout for Redstone’s stake was upped to $1.75 billion and indemnity compromises were made to insure the family against shareholder lawsuits. That’s because common shareholders — as opposed to the family – get nothing up front except a new company with a better balance sheet, and that’s where things could go sideways again.
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