Paramount Takes Major Step to Finalizing Merger With Skydance

A special committee of Paramount’s board on Sunday signed off on a deal to merge with Skydance, according to two people familiar with the negotiations, setting the stage for a new era for CBS, Nickelodeon and the film studio behind the “Top Gun” and “Mission: Impossible” franchises.

Shari Redstone, Paramount’s controlling shareholder, is expected to follow suit as early as Sunday evening, and the companies are planning to announce the deal as early as Monday, the people said. Ms. Redstone could still change her mind, but this is the closest the two companies have come to announcing a deal after months of fraught negotiations.

The deal would be a turning point for the Redstone family, whose fortunes have been intertwined with the rise and fall of the traditional entertainment industry during the decades of its tumultuous ownership of Paramount and its predecessors. Ms. Redstone, Paramount’s board chair, would cash in much of her ownership in the company she fought to preserve and control.

The merger would anoint a new mogul in Hollywood. David Ellison, the tech scion behind Skydance, will become the top power broker at Paramount. The deal is in some ways the story of media writ large, with a family that made its fortune in traditional entertainment largely replaced by one enriched by technology — Mr. Ellison is the son of the Oracle founder Larry Ellison. The Ellisons’ considerable resources have been a major selling point for the Redstones, who were seeking to fortify Paramount for the long-term.

In recent years, Paramount has become the poster child of a traditional media industry that has been limping along in the shadows of the streaming giant Netflix and tech companies like Amazon, which have plenty of cash to spend on their media bets. Paramount has tried to replace its fading cable TV enterprise with streaming businesses like Paramount+, but those efforts are still nowhere near as profitable as traditional TV operations.

The full value of the merger was not immediately clear because the deal is complex. Skydance and its financial backers would acquire National Amusements, the company that holds the Redstone family’s voting stock in Paramount, for roughly $1.75 billion. Paramount would also merge with Skydance, leaving the studio and its backers in charge of a media empire that includes film, TV and news properties.