Why a billionaire’s son could change the fortunes of Network Ten
By Calum Jaspan
All roads are leading Network Ten and its parent company, Paramount Global, towards new ownership and who the successful party might be just got a little clearer this week.
David Ellison, who owns film production studio Skydance Media (and is the son of Larry Ellison, founder of tech giant Oracle and the world’s fifth-richest person), is in an exclusive month-long negotiating period with Paramount to merge the two companies.
Skydance Media owner David Ellison is in an exclusive month-long negotiating period with Paramount to merge the two companies.Credit: Getty Images
If successful, Ellison will purchase Paramount chair Shari Redstone’s family holding company, National Amusements, Inc. for $US2 billion ($3.1 billion), becoming the company’s chief executive and controlling shareholder. Paramount owns Network Ten, Channel 5 in the UK, US network CBS, Nickelodeon, MTV and the storied Hollywood studio Paramount Pictures.
The deal, while complex and far from completion, would mean Network Ten changing hands for the sixth time. In 2017, CBS bought the network, which later merged with Viacom before rebranding as Paramount Global.
A Network Ten spokesperson declined to comment. However, network executives – speaking anonymously due to the ongoing negotiations – said they considered Ellison’s merger proposal to be a positive one that could leave Paramount’s Australian assets in a strong position. A successful deal would also firm up the content pipelines for Paramount’s free and paid services locally, they said.
Paramount and Skydance already have an established working relationship. Founded by Ellison in his early 20s in 2006, Skydance has co-produced several major films with Paramount Pictures, including the Mission Impossible series, True Grit, Top Gun Maverick, and others.
However, they need to surmount a number of obstacles to make the tie-up happen.
While the Redstone family controls 77 per cent of Paramount’s voting stock, it owns only around 10 per cent of the shares. Other shareholders have signalled dissatisfaction with the Skydance deal being in pole position.
Shareholders Matrix Asset Advisors called the Skydance deal “suboptimal” on Monday, saying it would disproportionately benefit the Redstone family. Matrix also urged the board to reconsider a more straightforward bid from private equity firm Apollo Global Management, which was recently rejected.
The Apollo deal offered cash to acquire all of Paramount Global for $US26 billion, according to Reuters. This followed an initial offer of $US11 billion from Apollo to purchase just the film studio.
When the exclusive negotiating period was announced, Paramount’s share price rose 15 per cent, but it has since soured, dropping back 24 per cent.
Tom Cruise films have been central to an established relationship between Skydance and Paramount.Credit: Marija Ercegovac.
Meanwhile, another potential suitor, HBO-owner Warner Bros Discovery, freed itself up this week. It had been in the middle of a two-year period of restrictions on merger and acquisition activity after its recent merging of Discovery and WarnerMedia in 2022.
Warner Bros chief executive David Zaslav and Paramount boss Bob Bakish already held merger discussions this year before talks went cold. Should a deal be reconsidered, it would have the potential to supercharge the assets of both, bringing together highly sought after HBO content alongside Paramount’s vast back catalogue.
It could also turn the tide in Paramount’s favour locally, with HBO content set to exit Foxtel traditional services and Binge next year with the launch of Max, as well as breathing life into Paramount’s ability to compete for sports content locally.
The company is still adjusting to recent changes, including a reorganisation of reporting lines globally. One of its two Australian bosses, Jarrod Villani, left this year, with company veteran Beverley McGarvey staying on as sole lead.
All change: Shari Redstone’s potential exit reflects how streaming has changed the game for the Hollywood elite.Credit: Bloomberg
Paramount announced a significant round of layoffs in February. At the time, global chief Bakish said it would focus “more heavily on our Hollywood franchises, films and series, which have mass global appeal.”
Chief executive of aggregation platform Fetch Scott Lorson said Paramount was likely to secure a deal, but plenty of drama had yet to play out.
“Shareholder disputes, competing offers, and regulatory considerations all have the potential to influence the ultimate outcome,” he said.
While Lorson said it was too early to speculate on what a deal would mean for Network 10, a positive outcome may be on the cards.
“Many scenarios remain in play, several of which could result in a reinvigorated and scaled local player,” he said.
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