Business
Paramount's board approves bid by David Ellison's Skydance Media in sweeping Hollywood deal
Tech scion David Ellison’s months-long quest to win control of Paramount Global moved closer to the finish line Sunday, in a deal that marks a new chapter for the long-struggling media company and parent of one of Hollywood’s oldest movie studios.
Paramount Global board members on Sunday approved the bid by Ellison’s Skydance Media and its backers to buy the Redstone family’s Massachusetts holding firm, National Amusements Inc., said two sources close to the deal who were not authorized to comment.
A spokesperson for Paramount declined to comment.
The Redstones’ voting stock in Paramount would be transferred to Skydance, giving Ellison, son of billionaire Oracle Corp. co-founder Larry Ellison — a key backer of the deal — control of a media operation that includes Paramount Pictures, broadcast network CBS and cable channels MTV, Comedy Central and Nickelodeon.
The proposed $8.4 billion multipronged transaction also includes merging Ellison’s production company into the storied media company, giving it more heft to compete in today’s media environment.
The agreement, which mints Ellison as a Hollywood mogul, came together during the last two weeks as Ellison and his financing partners renewed their efforts to win over the Redstone family and Paramount’s independent board members.
Shari Redstone has long preferred Ellison’s bid over other those of potential suitors, believing the 41-year-old entrepreneur possesses the ambition, experience and financial heft to lift Paramount from its doldrums.
But, in early June, Redstone got cold feet and abruptly walked away from the Ellison deal — a move that stunned industry observers and Paramount insiders because it was Redstone who had orchestrated the auction.
Within about a week, Ellison renewed his outreach to Redstone. Ellison ultimately persuaded her to let go of the entertainment company her family has controlled for nearly four decades. The sweetened deal also paid the Redstone family about $50 million more than what had been proposed in early June. On Sunday Paramount’s full board, including special committee of independent directors, had signed off on the deal, the sources said.
Under terms of the deal, Skydance and its financial partners RedBird Capital Partners and private equity firm KKR have agreed to provide a $1.5-billion cash infusion to help Paramount pay down debt. The deal sets aside $4.5 billion to buy shares of Paramount’s Class B shareholders who are eager to exit.
The Redstone family would receive $1.75-billion for National Amusements, a company that holds the family’s Paramount shares and a regional movie theater chain founded during the Great Depression, after the firm’s considerable debts are paid off.
The proposed handoff signals the end of the Redstone family’s nearly 40-year reign as one of America’s most famous and fractious media dynasties. The late Sumner Redstone’s National Amusements was once valued at nearly $10 billion, but pandemic-related theater closures, last year’s Hollywood labor strikes and a heavy debt burden sent its fortunes spiraling.
In the last five years, the New York-based company has lost two-thirds of its value. Its shares are now worth $8.2 billion based on Friday’s closing price of $11.81 a share.
The struggles in many ways prompted Shari Redstone to part with her beloved family heirloom. Additionally, National Amusements was struggling to cover its debts, and the high interest rates worsened the outlook for the Redstone family.
Paramount boasts some of the most historic brands in entertainment, including the 112-year-old Paramount Pictures movie studio, known for landmark films such as “The Godfather” and “Chinatown.” The company owns television stations including KCAL-TV (Channel 9) and KCBS-TV (Channel 2). Its once-vibrant cable channels such as Nickelodeon, TV Land, BET, MTV and Comedy Central have been losing viewers.
The handover requires the approval of federal regulators, a process that could take months.
In May, Paramount’s independent board committee said it would entertain a competing $26-billion offer from Sony Pictures Entertainment and Apollo Global Management. The bid would have retired all shareholders and paid off Paramount’s debt, but Sony executives grew increasingly wary of taking over a company that relies on traditional TV channels.
Earlier this year, Warner Bros. Discovery expressed interest in a merger or buying CBS. However, that company has struggled with nearly $40 billion in debt from previous deals and is in similar straits as Paramount. Media mogul Byron Allen has also shown interest.
Skydance Media founder and Chief Executive David Ellison prevailed in his bid for Paramount.
(Evan Agostini/Invision/Associated Press)
Many in Hollywood — film producers, writers and agents — have been rooting for the Skydance takeover, believing it represents the best chance to preserve Paramount as an independent company. Apollo and Sony were expected to break up the enterprise, with Sony absorbing the movie studio into its Culver City operation.
The second phase of the transaction will be for Paramount to absorb Ellison’s Santa Monica-based Skydance Media, which has sports, animation and gaming as well as television and film production.
Ellison is expected to run Paramount as its chief executive. Former NBCUniversal CEO Jeff Shell, who’s now a RedBird executive, could help manage the operation. It’s unclear whether the Skydance team will keep on the three division heads who are now running Paramount: Paramount Pictures CEO Brian Robbins, CBS head George Cheeks and Showtime/MTV Entertainment Studios chief Chris McCarthy.
Skydance has an existing relationship with Paramount. It co-produced each film in the “Mission: Impossible” franchise since 2011’s “Mission: Impossible — Ghost Protocol,” starring Tom Cruise. It also backed the 2022 Cruise mega-hit “Top Gun: Maverick.”
Ellison first approached Redstone about making a deal last summer, and talks became known in December.
Redstone long viewed Ellison as a preferred buyer because the deal paid a premium to her family for their exit. She also was impressed by the media mogul , believing he could become a next-generation leader who could take the company her father built to a higher level, according to people knowledgeable of her thinking.
Larry Ellison is said to be contributing funding to the deal.
David Ellison was attracted to the deal because of his past collaborations with Paramount Pictures and the allure of combining their intellectual properties as well as the cachet of owning a historic studio, analysts said. Paramount’s rich history contains popular franchises including “Transformers,” “Star Trek,” “South Park” and “Paw Patrol.”
“Paramount is one of the major historic Hollywood studios with a massive base of [intellectual property], and so it seems to us that it’s more about using the capital that Ellison has and what he’s built at Skydance and leveraging that into owning a major Hollywood studio,” Brent Penter, senior research associate at Raymond James, said prior to the deal. “Not to mention the networks and everything else that Paramount has.”
The agreement prepares to close the books on the Redstone family’s 37-year tenure at the company formerly known as Viacom, beginning with Sumner Redstone’s hostile takeover in 1987.
Seven years later, Redstone clinched control of Paramount, after merging Viacom with eventually doomed video rental chain Blockbuster to secure enough cash for the $10-billion deal. Redstone long viewed Paramount as the crown jewel, a belief that took root a half-century ago when he wheeled-and-dealed over theatrical exhibition terms for Paramount’s prestigious films to screen at his regional theater chain.
Under Redstone’s control, Paramount won Academy Awards in the ’90s for “Forrest Gump” and “Saving Private Ryan.”
He pioneered the idea of treating films as an investment portfolio and hedging bets on some productions by taking on financial partners — a strategy now widely used throughout the industry.
The late Sumner Redstone and his daughter Shari Redstone have owned a controlling interest in Viacom, which was rebranded as Paramount, through their family holding company, National Amusements Inc., since 1987.
(Katy Winn/Invision/Associated Press)
In 2000, Redstone expanded his media empire again by acquiring CBS, a move that made Viacom one of the most muscular media companies of the time, rivaling Walt Disney Co. and Time Warner Inc. Just six years later, Redstone broke it up into separate, sibling companies, convinced that Viacom was more precious to advertisers because of its younger audience. Redstone also wanted to reap dividends from two companies.
After years of mismanagement at Viacom, which coincided with the elder Redstone’s declining health, and boardroom turmoil, his daughter stepped in to oust Viacom top management and members of the board. Three years later, following an executive misconduct scandal at CBS, Shari Redstone achieved her goal by reuniting CBS and Viacom in a nearly $12-billion deal.
The combined company, then called ViacomCBS and valued at more than $25 billion, was supposed to be a TV juggernaut, commanding a major percentage of TV advertising revenue through the dominance of CBS and more than two dozen cable channels.
But changes in the TV landscape took a toll.
As consumer cord-cutting became more widespread and TV advertising revenue declined, ViacomCBS’ biggest asset became a serious liability.
The company was late to enter the streaming wars and then spent heavily on its Paramount+ streaming service to try to catch up with Netflix and even Disney. (In early 2022, the company was renamed Paramount Global in a nod to its moviemaking past and to tie in with its streaming platform of the same name.)
The company’s eroding linear TV business and the decline of TV ad revenue, as well as its struggles trying to make streaming profitable, will be major challenges for Ellison as he takes over Paramount. Though traditional TV is declining, it still brings in cash for Paramount.
And streaming is a whole different economic proposition from television, one that offers slimmer profits. Meanwhile, the company also faces larger industry questions about when — if ever — box office revenue will return to pre-pandemic levels.
“This is a company that is floating on hope,” said Stephen Galloway, dean of Chapman University’s Dodge College of Film and Media Arts. “And hope isn’t a great business strategy.”
Business
Waymo reports teen riders for bad behavior and delivers them to the police
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
Business
Orange County real estate investor pleads not guilty in $100 million bank fraud case
An Orange County real estate investor accused of criminally defrauding an Arizona bank of nearly $100 million pleaded not guilty Monday and remains in custody.
Mahender Makhijani, 44, of Corona del Mar — who also was ordered by an arbitrator to pay $1.34 billion in a separate civil fraud case — was arraigned in Santa Ana federal court on two charges.
He is accused of bank fraud and making a false statement to a bank in a June 8 case involving a $100 million real estate loan made by Phoenix-based Western Alliance Bank. He was taken into custody on June 10.
Makhijani is accused of providing bogus collateral for the October 2024 loan now in default. In a civil lawsuit, Western Alliance said the outstanding balance as nearly $99 million.
Prosecutors say he falsified title insurance policies that showed the bank would have a first lien on the underlying collateral if the loan went bad, when in fact it did not.
A trial was set for August 11 before U.S. District Judge David O. Carter in Santa Ana.
Michael Schachter, his criminal defense attorney, did not respond to messages seeking comment.
In the civil case, an arbitrator in May ordered Makhijani to pay Laguna Beach real estate mogul Mohammad Honarkar $1.34 billion after ruling he had fraudulently induced him into a 2021 joint venture — and then wrested control and lost to creditors more than two dozen properties Honarkar had owned.
Makhijani has not been criminally charged in that case, but prosecutors alleged in an affidavit in support of the bank fraud charges that he used “force and threats” in his dealings with Honarkar and others — including taking over the landmark Hotel Laguna in 2023 that Honarkar was renovating.
Prosecutors sought to hold Makhijani without bail after his arrest.
The affidavit noted he is a legal Indian immigrant with a home and bank accounts in that country, has access to private jets and threatened to “run away” if caught in a difficult situation.
The request was denied and he was granted $500,000 bail.
However, Makhijani remains in custody after a hearing sought by prosecutors last month before Magistrate Judge Autumn Spaeth.
The judge declined to accept a $450,000 cashier’s check submitted by a Makhijani associate for the bail, finding insufficient proof the source of the funds was legitimate, according to court records.
Makhijani is not prominent outside Orange County real estate circles, but he established a thriving distressed-assets business over the last decade that attracted prominent Southern California real estate investors.
Prosecutors said it paid for a lifestyle that included two multimillion-dollar homes in Corona del Mar, a luxury apartment in Newport Beach and various luxury vehicles.
As of last month, prosecutors had not fully traced his assets, which they believe are not held in his name and some of which may be in India.
The businessman employed an array of shell companies and strawmen to sign documents on his behalf, and to stand in for him as operators of his companies, according to the affidavit.
Makhijani told an associate he took extra precautions because wanted to insulate himself from litigation and that “they were sharks in the distressed world who took advantage of people,” the affidavit stated.
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