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Hollywood group: Billion-dollar film producer buys Paramount

Hollywood group: Billion-dollar film producer buys Paramount
Hollywood group: Billion-dollar film producer buys Paramount

Paramount is one of the names that made Hollywood great. The company will now be owned by 41-year-old film producer David Ellison and his billionaire family.

The long-established Hollywood company Paramount has a new owner. After months of negotiations, film producer David Ellison finally prevailed. He and his partners are investing more than eight billion dollars in the takeover.

At first glance, Paramount’s share structure made it easy to gain control of the company. More than three quarters of the shares with voting rights belonged to the previous owner, Shari Redstone. In theory, it would have been enough to just take over her share. But then the many owners of non-voting shares would have threatened to file lawsuits if they felt they had been disadvantaged.

Complex billion dollar deal

According to the deal announced by Paramount, Redstone will receive $2.4 billion for her shares. At the same time, Paramount will merge with Ellison’s production company Skydance Media.

In addition, Ellison, his family and participating investors will raise another $4.5 billion to buy out shares from owners of non-voting stock and will pay $1.5 billion to reduce Paramount’s debt.

Ellison, 41, will become the new head of Paramount once the deal is completed. His father is Larry Ellison, the billionaire founder of the software company Oracle.

Hollywood veteran with problems

Paramount is one of the names that made Hollywood great. The studio produced classics such as “The Godfather” – and most recently blockbusters from the “Mission: Impossible” film series. Skydance brought Paramount money as co-producer of the most recent box office hit “Top Gun: Maverick”, among other things.

However, Paramount has been struggling with problems for several years. The American TV broadcaster CBS, long a reliable moneymaker, has been affected by the general decline in spending on television advertising and the loss of cable customers. And the streaming service Paramount+ caused high start-up losses, but is far behind industry leader Netflix in terms of user numbers. As a result, Paramount is sitting on a mountain of debt of 14 billion dollars.

Message from Paramount

Source: Stern

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