Terms have been decided on a significant merger between Paramount and Skydance.

According to CNBC, the two giant entertainment companies have agreed to terms, and a deal could be announced in just a few days. All it is waiting on is a signoff from Paramount's controlling shareholder, Shari Redstone, who owns National Amusements. The company owns 77% of class A Paramount shares.

Competing offers have come in recently before this from Sony Pictures and Apollo Global Management, but ultimately, they didn't work out.

A National Amusements spokesperson said, “We received the financial terms of the proposed Paramount/Skydance transaction over the weekend, and we are reviewing them.”

Details of the Paramount and Skydance merger

The deal is for Redstone to receive $2 billion for National Amusements. Skydance would buy out about 50% of class B Paramount shares for $15 apiece or $4.5 billion. For the new company, this would leave the holders with equity.

Additionally, Skydance and RedBird would contribute $1.5 billion to Paramount's cash for debt reduction.

When it's all said and done, Skydance and RedBird would own two-thirds of Paramount. The class B shareholders would own the remaining third of the entertainment company.

It's a significant deal, valued at $8 billion. This is an increase of a $5 billion offer from earlier.

The merger would expand a media kingdom that includes well-known CBS, MTV, and the studio responsible for hits like Top Gun.

The New York Times stated yesterday that the deal could still fall through, even though everything is in place for it to move forward.

So, why is this all happening?

Paramount has been under increased pressure for a deal due to its transition to streaming and annual losses of hundreds of millions.  Its stock has dipped 17% this year to date, and investors are panicked about its efforts to profit from streaming. Shares are worth close to one-third of what they were in 2019 when Redstone's reunion of Viacom and CBS happened.

Several Paramount investors have opposed a deal with Skydance, saying it would enrich Ms. Redstone at the expense of shareholders. Some have even threatened to sue. Deadline reported that filmmakers like James Cameron have supported the Skydance deal.

“We had expected to see at least some longer-tail networks get dropped, so we would consider this part a win for Paramount,” MoffettNathanson analyst Robert Fishman wrote to clients. “Of course, the total rate Charter agreed to pay Paramount for the entire portfolio of networks, including CBS, Paramount+ ad-tier, Showtime linear, and the cable networks, will determine the true degree of the win or loss. Keeping carriage at the expense of accepting a big discount to prior affiliate fee rates would be just as determinantal to future cash flows.”

We'll see what happens with Paramount and Skydance, as all this looks like it will be finalized very soon.