Skydance Reaches Deal to Merge With Paramount

Paramount’s board on Sunday signed off on a deal to merge with Skydance, according to two people familiar with the negotiations, ushering in a new era for CBS, Nickelodeon and the film studio behind the “Top Gun” and “Mission: Impossible” franchises.

The deal is a turning point for the Redstone family, whose fortunes have been intertwined with the rise and fall of the traditional entertainment industry during the decades of its tumultuous ownership of Paramount and its predecessors. Ms. Redstone, Paramount’s board chair, is cashing in much of her ownership in the company she fought to preserve and control.

The merger will anoint a new mogul in Hollywood. David Ellison, the tech scion behind Skydance, will become the top power broker at Paramount. The deal is in some ways the story of media writ large, with a family that made its fortune in traditional entertainment largely replaced by one enriched by technology — Mr. Ellison is the son of the Oracle founder Larry Ellison. The Ellisons’ considerable resources was a major selling point for the Redstones, who were seeking to fortify Paramount for the long-term.

In recent years, Paramount has become the poster child of a traditional media industry that has been limping along in the shadows of the streaming giant Netflix and tech companies like Amazon, which have plenty of cash to spend on their media bets. Paramount has tried to replace its fading cable TV enterprise with streaming businesses like Paramount+, but those efforts are still nowhere near as profitable as traditional TV operations.

The full value of the merger was not immediately clear because the deal is complex. Skydance and its financial backers will acquire National Amusements, the company that holds the Redstone family’s voting stock in Paramount, for roughly $1.75 billion. Paramount is also merging with Skydance, leaving the studio and its backers in charge of a media empire that includes film, TV and news properties.

Paramount’s market capitalization — the value the stock market places on the company — is around $8.2 billion. Skydance’s last disclosed valuation was north of $4 billion.