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Paramount Global is merging with Skydance Media, handing control to the latter’s shareholders. This union aims to create a new entertainment heavyweight capable of competing with Netflix, Disney, and Amazon in the highly competitive streaming market.

Paramount Global, owner of the legendary Paramount Pictures studio and CBS network, has announced its upcoming merger with Skydance Media, the production company behind hits like Top Gun: Maverick. This strategic alliance marks a major turning point for both companies, who hope to counter the dominance of the streaming giants.

Despite its prestigious content catalog, Paramount has been burdened with nearly $15 billion in debt and has struggled to find its footing in a rapidly changing market. Its streaming service, Paramount+, launched in 2021, boasts over 70 million subscribers but remains far behind Netflix, Disney+, and Amazon’s Prime Video, each of which has surpassed 200 million users.

On the other hand, Skydance Media has emerged in recent years as an innovative player in the film industry. Founded in 2010 by David Ellison, son of billionaire Larry Ellison, the studio specializes in producing blockbusters that combine technological prowess and quality storytelling. Besides the global hit Top Gun: Maverick in 2022, Skydance has produced several installments of the Mission: Impossible series with Tom Cruise.

According to the terms of the deal, Skydance investors will take control of 70% of the “new Paramount.” RedBird Capital Partners, an ally of Skydance, will inject $1.5 billion to strengthen the finances of the merged group, valued at $28 billion by both parties. Shari Redstone, Paramount’s principal shareholder through the family holding company National Amusements, has approved the operation.

Jeff Shell, tipped to be the future CEO, sees this union as “a new beginning” for Paramount. Skydance is expected to bring a fresh creative and technological perspective, bolstered by its recent investments in animation and video games. Synergies between the two entities could generate $2 billion in annual savings.

Some analysts remain cautious about the new group’s ability to compete with the streaming behemoths. “As dire as Paramount’s financial situation may seem, this change might not be so bad,” says Ross Benes of Emarketer, while highlighting the uncertainty surrounding the growth strategy. Kenneth Leon of CFRA points out the “challenges” in an ever-evolving sector.

David Ellison, the future chairman of Paramount, is optimistic: the goal is to build “an independent group” capable of “succeeding” in the long term. The marriage between Paramount’s experience and Skydance’s boldness certainly seems promising. The first half of 2025, the expected date for the merger’s completion, will be the time to take stock of this high-stakes venture.

With AFP