Sony & Paramount Sign Non-Disclosure Agreement Allowing Deal Talks To Start, But It’s Not Looking Like A $26 Billion Bid For Whole Company Anymore

Sony has signed an NDA with Paramount Global, a move that will give it access to the books and allow deal talks to move ahead, Deadline hears.

Sony, parent of U.S. Sony Pictures Entertainment, along with private equity giant Apollo kicked off the deal process with a preliminary bid of $26 billion but whats being contemplated now is not that, but something narrower. A look at the books is necessary to move forward in any case. The non-disclosure agreement comes two weeks after a Paramount’s monthlong exclusive negotiating window with David Ellison’s Skydance ended with no deal but the indie studio still hanging in, still interested.

As a few weeks passed with no Sony NDA, there’s been speculation that its interest was waning as it considered the significant regulatory hurdles. Sony, however. just wants the studio. Some industry players believe Apollo just wants the studio lot as a real estate play. Paramount Global’s CBS broadcast assets might need to be sold off.

It’s not clear if the NDA with Sony is for the studio alone or also includes Apollo and the rest of the company, including for the broadcast assets As things stand, Apollo’s current station holdings would put it over the Congressionally mandated cap.

Hollywood values the lot and is backing Ellison, although many balk at the circa $5 billion valuation put on the company as part of a proposed two-step deal. Skydance said its latest capital raise in the fall of 2022 valued it at over $4 billion. A merger of two studios envisioned in a Sony deal would be a disaster for talent, with the town already downsized by the Disney-Fox merger.

Paramount Global shareholders feel the opposite, and hate the Skydance deal, since it leaves the company public with most of the sale proceeds going to Redstone to acquire her controlling stake.