And just like that… after the announcement that Warner Bros. was interested in exploring a joint streaming partnership with its own Max and Paramount Global's Paramount+, Skydance is back in the game, as reported by Deadline.

Three weeks ago, Paramount Global controlling shareholder Shari Redstone through National Amusements Inc., which has 80% of voting shares in Paramount, pulled out of the planned merger. But now the deal's back on.

Currently, Paramount's special committee made up of board directors to evaluate strategic options for the media company, is reviewing the new terms of the deal, sources told Deadline. The Wall Street Journal originally reported on the revived deal.

Representatives from Paramount, Skydance and NAI did not comment on the issue.

A change of mind

Paramout Pictures and Skydance logo.

The updated deal has Skydance paying out $1.75 billion for NAI. This is less than the original agreement for the first in the two-step deal, and brings NAI under Skydance. This new deal also foregoes the requirement of getting the “majority of the minority,” which was a dealbreaker for Ellison in the previous talks.

According to the WSH, Skydance and NAI agreed to have a 45-day “go-shop period,” which meant that other entities interested in bidding for Paramount can still send in their offers. Skydance, on the other hand, had been in on-and-off negotiations for Paramount for more than half a year.

After the talks with Skydance fell through, other investments groups led by Edgar Bronfman, Barry Diller and producer Steven Paul have been rumored as interested parties. Other names linked to submitting bids are private equity firm Apollo, Sony Pictures and Byron Allen.

While the resumption of Paramount and Skydance's deal can be seen as a good thing, in the larger scheme of things it looks like a messy and erratic M&A process. Certainly one of the most dramatic in Hollywood history.

In 2019, CBS and Viacom merged to form Paramount. Since then, the entertainment company has struggled with balancing streaming and linear TV. The COVID-19 pandemic and the dual SAG-AFTRA and WGA strikes last year didn't help either. Currently, Paramount's stock price is almost a third of the level it was at the time of the merger close. By the end of 2023, it had $14.6 billion in long-term debt. In other words, Paramount needs a save.

A last-minute save?

When Redstone pulled out the Skydance arrangement at the last minute, her focus and Paramount's shifted to a revamped strategic plan. After former Paramount president and CEO Bob Bakish left in April, his replacements, the trio from the Office of the CEO were promoted and revealed their plans moving forward at the company's annual shareholder meeting in June.

Last week, the co-CEOs George Cheeks, Brian Robbins and Chris McCarthy said that will save the company $500 million annually. Part of this plan was to sell off assets and improve streaming numbers through a JV or partnership. Another part was to layoff staff which will start this summer. Ahead of the layoffs, several key senior executives such as the heads of the legal and home entertainment departments have already resigned.

While news of the resumption of the Skydance merger has once again rattled Paramount employees, the company has actually done quite well in its entertainment division, particularly film TV and streaming in the last few weeks. Paramount Picture's A Quiet Place: Day One had an opening weekend earning $100 million globally. It's the highest figure for the franchise. Comedy Central's Daily Show has been enjoying high ratings as well. The Jon Stewart-hosted episode about the first presidential debate was the highest rated among the 18- to 34-year-old demographic.

Showtime Studios hasn't been slacking either, signing major talents such as Jeffrey Wright, Michael Fassbender, Patrick Dempsey and Richard Gere. CBS News has continued investing in its streaming service, CBS News 24/7, which launched June 24.

However, the question is whether this momentum of successes will last. Some Wall Street analysts see the M&A with Skydance as a good thing, but other are bearish about their outlook. Even talks of Paramount selling BET Media adding to the revived Skydance deal, Loop Capital analyst Alan Gould still tagged Paramount as a “sell” stock, with a target 12-month price of $8.

He said that the company is just “dragging out the inevitable.”