Why the Paramount Deal Talks Failed

What will Shari Redstone do now with Paramount?Credit…Mike Blake/Reuters

Why Redstone backed out

For months, Skydance Media’s effort to merge with Paramount — the studio behind “Mission: Impossible” and “Top Gun” — was the most-discussed M.&A. matter on Wall Street and in Hollywood. Now it has fallen apart.

What happened? The simple answer: Shari Redstone, who controls Paramount through the holding company National Amusements, just didn’t want to sell, according to DealBook’s Lauren Hirsch, who covered the talks with The Times’s Ben Mullin.

A deal was very close. Advisers for Paramount and Skydance had reached agreements on economic terms for a transaction and on other issues.

But the talks soured toward the end, and a fundamental question hovered over everything: Was the Redstone family finally ready to part with the media empire it has owned for decades?

The other issues at play: Trust between Redstone and Skydance had eroded significantly, in large part because of numerous leaks to news organizations. Redstone was annoyed that Skydance altered its offer — a complicated transaction that involved buying control of National Amusements and then merging with Paramount — by reducing its value of Redstone’s holding company to $1.7 billion from $2 billion.

Meanwhile, Charles Phillips, a former Oracle executive and a member of the Paramount special committee, was unconvinced by the offer.