Billionaire Forms a Business Alliance with the Ellisons in Connection with Paramount Agreement
In a significant move for the entertainment industry, Gerry Cardinale's RedBird Capital Partners have invested $1.8 billion towards Skydance's $8 billion deal to merge with Paramount. This investment positions Cardinale as a major influencer in the reshaping of Paramount's business strategy and governance.
Gerry Cardinale, a billionaire through successful investments and leadership at RedBird Capital, will join Paramount as a director. His firm, established in 2014, manages over $10 billion in assets and has made strategic investments in various sectors, including media, entertainment, sports, and financial services. Cardinale's hands-on approach in portfolio management and focus on problem-solving with capital have helped RedBird deliver significant returns.
Under the new ownership structure, RedBird will hold 22.5% of Paramount's voting rights. This investment comes alongside others, including Larry Ellison, to acquire control from the Redstone family and restructure Paramount's ownership and operations. The test begins when the deal closes, which could happen any day now.
Paramount faces a raft of challenges under its new ownership group, including an existing $14.2 billion long-term debt load. With this investment, RedBird and partners will play a key role in reorganizing Paramount to prioritize cash flow and adapt to the evolving entertainment landscape marked by shifts from traditional linear television to streaming platforms.
Cardinale sees Paramount as the perfect candidate to receive the RedBird treatment. He believes the investment will be a success, a sentiment shared by Paul Wachter, the founder of Main Street Advisors.
Andy Gordon, head of RedBird's West Coast office, will become Paramount's chief operating officer and chief strategic officer. Jeff Shell, former CEO of NBCUniversal, will join Paramount as president. RedBird Capital Partners will appoint a yet-to-be-named second director at Paramount.
David Ellison will hold 50% and Larry Ellison, Skydance's biggest investor, will hold the remaining 27.5%. The potential rewards from investing in Paramount are great, but so are the risks. RedBird's $1.8 billion cash outlay to buy Paramount represents 15% of its total assets under management.
RedBird Capital Partners has grown to $12 billion in assets under management with 100 investment professionals across six global offices. Cardinale, who briefly worked at merchant bank BDT, founded by Byron Trott, owns 100% of RedBird Capital Partners and is estimated to be worth $1.8 billion.
In the past, RedBird Capital Partners has made headlines for its investments in sports, entertainment, and media. Notably, the firm bought Italian football club A.C. Milan for $1.2 billion in 2022. With Cardinale at the helm, Paramount is poised for a new era, aiming to adapt and thrive in the ever-changing media landscape.
[1] [https://www.hollywoodreporter.com/business/business-news/gerry-cardinale-redbird-capital-partners-skydance-paramount-1235106438/] [2] [https://www.bloomberg.com/news/articles/2022-02-18/skydance-said-to-get-1-8-billion-from-redbird-for-paramount-deal] [3] [https://www.reuters.com/business/media-telecom/gerry-cardinale-redbird-capital-partners-to-invest-1-8-billion-skydance-paramount-deal-2022-02-18/] [4] [https://variety.com/2022/film/news/redbird-capital-partners-skydance-paramount-investment-1235054076/] [5] [https://www.forbes.com/profile/gerry-cardinale/]
- The venture capital firm, RedBird Capital Partners, with Gerry Cardinale as a key figure, will hold a significant stake in the governance of Paramount Media, following their $1.8 billion investment towards the $8 billion merger between Skydance and Paramount.
- With this investment, RedBird Capital, an affluent private equity and media company, will participate in revitalizing and adapting Paramount's operations, as they strive to prioritize cash flow and navigate the shifting terrain of the entertainment industry.
- The business deal, facilitated by strategic partnerships including Larry Ellison, positions Gerry Cardinale as a key player in the reshaping of Paramount, bringing his expertise in media, entertainment, sports, and finance to the table.