As filed with the U.S. Securities and Exchange Commission on November 4, 2024

Registration No. 333-     

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

NEW PLUTO GLOBAL, INC.^*

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		4833		99-3917985
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

c/o Paramount Global

1515 Broadway

New York, New York 10036

(212) 258-6000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Caryn Groce

Executive Vice President, Acting General Counsel and Secretary

Paramount Global

1515 Broadway

New York, New York 10036

(212) 258-6000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

With Copies to:

 

Eric M. Swedenburg Katherine M. Krause Xiaohui (Hui) Lin Katharine L. Thompson Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, New York 10017 (212) 455-2000		Faiza J. Saeed Daniel J. Cerqueira Claudia J. Ricciardi Cravath, Swaine & Moore LLP Two Manhattan West 375 Ninth Avenue New York, New York 10001 (212) 474-1000		Stephanie Kyoko McKinnon Skydance Media, LLC 2900 Olympic Boulevard Santa Monica, California 90404 (424) 291-3400		Justin G. Hamill Bradley C. Faris Ian Nussbaum Max Schleusener Latham & Watkins LLP 1271 Avenue of the Americas New York, New York 10020 (212) 906-1200

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement is declared effective and upon completion of the transactions described in the enclosed information statement/prospectus.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”), check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☒		Accelerated filer		☐
Non-accelerated filer		☐		Smaller reporting company		☐
				Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

 

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)		☐
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)		☐

 

 

 

*	The registrant is currently named New Pluto Global, Inc. The registrant plans to change its name to “[   ]” following the effective date of this registration statement and completion of the transactions described in the enclosed information statement/prospectus.

 

 

 

The information contained in this information statement/prospectus is not complete and may be changed. These securities may not be issued until the registration statement filed with the U.S. Securities and Exchange Commission becomes effective. This information statement/prospectus is not an offer to sell these securities and does not constitute the solicitation of an offer to buy these securities in any jurisdiction where the offer or sale of these securities is not permitted.

 

PRELIMINARY—SUBJECT TO COMPLETION

DATED NOVEMBER 4, 2024

 

 

INFORMATION STATEMENT/PROSPECTUS AND NOTICE OF ACTION BY WRITTEN CONSENT

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY

*********

TO THE STOCKHOLDERS OF PARAMOUNT GLOBAL

[   ], 2024

To our Stockholders:

On behalf of the Board of Directors (the “Paramount Board”) of Paramount Global, a Delaware corporation (“Paramount”), we are pleased to enclose the information statement/prospectus relating to the proposed transaction among Paramount, Skydance Media, LLC, a California limited liability company (“Skydance”), and certain affiliates of investors of Skydance.

On July 7, 2024, Paramount entered into a transaction agreement (as may be amended from time to time, the “Transaction Agreement”) with Skydance, New Pluto Global, Inc., a Delaware corporation and a wholly-owned, direct subsidiary of Paramount (“New Paramount”), Pluto Merger Sub, Inc., a Delaware corporation and a wholly-owned, direct subsidiary of New Paramount (“Paramount Merger Sub”), Pluto Merger Sub II, Inc., a Delaware corporation and a wholly-owned, direct subsidiary of New Paramount (“Paramount Merger Sub II”), Sparrow Merger Sub, LLC, a California limited liability company and a wholly-owned, direct subsidiary of New Paramount (“Skydance Merger Sub” and, together with Paramount Merger Sub and Paramount Merger Sub II, the “Merger Subs”) and the Upstream Blocker Holders (as defined in the Transaction Agreement) signatory thereto (solely with respect to certain sections of the Transaction Agreement as specified therein). In connection with the Transaction Agreement, Paramount formed New Paramount and, as direct subsidiaries of New Paramount, the Merger Subs. Subject to the terms and conditions of the Transaction Agreement, (a) on the day immediately prior to the Closing Date (as defined herein), Paramount Merger Sub will merge with and into Paramount (the “Pre-Closing Paramount Merger”), with Paramount surviving the merger, (b) on the Closing Date, Paramount Merger Sub II will merge with and into New Paramount (the “New Paramount Merger”), with New Paramount surviving the merger, (c) on the Closing Date, following the New Paramount Merger, the Upstream Blocker Holders will transfer all of the issued and outstanding equity interests in certain blocker entities to New Paramount in exchange for an allocation of the Skydance Merger Consideration (as defined herein) (the “Blocker Contribution and Exchange”) and (d) on the Closing Date, following the Blocker Contribution and Exchange, Skydance Merger Sub will merge with and into Skydance (the “Skydance Merger” and, together with the Pre-Closing Paramount Merger and the New Paramount Merger, the “Mergers”), with Skydance surviving the merger (“Surviving Skydance Entity”). We refer to the transactions contemplated by the Transaction Agreement (other than the NAI Transaction (as defined herein) but including the PIPE Transaction (as defined herein)) as the “Transactions.” As a result of the Transactions, Paramount and Skydance will become wholly-owned subsidiaries of New Paramount, which will be renamed “[    ]” immediately following the completion of the Mergers.

Upon completion of the Pre-Closing Paramount Merger on the day immediately prior to the Closing Date, (a) each share, other than any Pre-Closing Paramount Merger Cancelled Shares (as defined herein), of (i) Class A common stock, par value $0.001 per share, of Paramount (“Paramount Class A common stock”) that is issued and outstanding immediately prior to the Pre-Closing Paramount Merger Effective Time (as defined herein) will be converted automatically into the right to receive one share of Class A common stock, par value $0.001 per share, of New Paramount (“New Paramount Class A common stock”) and (ii) Class B common stock, par value

$0.001 per share, of Paramount (“Paramount Class B common stock”) that is issued and outstanding immediately prior to the Pre-Closing Paramount Merger Effective Time will be converted automatically into the right to receive one share of Class B common stock, par value $0.001 per share, of New Paramount (“New Paramount Class B common stock” and, together with the New Paramount Class A common stock, “New Paramount common stock”), (b)(i) each share of Paramount Class A common stock or Paramount Class B common stock that is owned by Paramount as treasury stock or otherwise (excluding, for the avoidance of doubt, any shares of Paramount Class B common stock held by any Paramount Employee Plan (as defined in the Transaction Agreement) or trust related thereto) and (ii) each share of New Paramount common stock that is held directly by Paramount immediately prior to the Pre-Closing Paramount Merger Effective Time (as defined herein) (clauses (i) and (ii), collectively, the “Pre-Closing Paramount Merger Cancelled Shares”) will be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor and (c) each share of capital stock of Paramount Merger Sub outstanding immediately prior to the Pre-Closing Paramount Merger Effective Time will be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor. All shares of Paramount common stock that have been converted to shares of New Paramount common stock in the Pre-Closing Paramount Merger will automatically be cancelled and will cease to exist and no longer be outstanding as shares of Paramount common stock.

In connection with the New Paramount Merger, Paramount stockholders (other than the Specified Stockholders (as defined herein), with respect to shares of Paramount Class B common stock, and the Specified NAI Stockholders (as defined herein), with respect to shares of Paramount Class A common stock) are entitled to make an election as to the form of consideration received for their shares of Paramount common stock held immediately prior to the Pre-Closing Paramount Merger. Paramount stockholders (other than the Specified Stockholders, with respect to shares of Paramount Class B common stock, and the Specified NAI Stockholders, with respect to shares of Paramount Class A common stock) may elect to receive, in accordance with the election procedures and subject to the proration mechanism set forth in the Transaction Agreement and described herein, (a) with respect to each share of Paramount Class A common stock held by such stockholder (i) an amount of cash, without interest, equal to $23.00 (the “Class A Cash Consideration”) or (ii) 1.5333 shares of New Paramount Class B common stock (the “Class A Stock Consideration”) and (b) with respect to each share of Paramount Class B common stock held by such stockholder (i) an amount of cash, without interest, equal to $15.00 (the “Class B Cash Consideration”) or (ii) one share of New Paramount Class B common stock (the “Class B Stock Consideration”). The maximum amount of cash consideration that holders of Paramount Class B common stock will be entitled to receive pursuant to the New Paramount Merger is approximately $4.3 billion in the aggregate, and a maximum of 285,889,212 shares of Paramount Class B common stock will be entitled to receive the Class B Cash Consideration. The elections to receive Class B Cash Consideration will be prorated as necessary to ensure that these limits are not exceeded.

Upon completion of the New Paramount Merger on the Closing Date, (a) each share, other than any New Paramount Merger Cancelled Shares (as defined herein), of (i) New Paramount Class A common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time (as defined herein) and that is held by a Specified NAI Stockholder will remain issued and outstanding as a share of New Paramount Class A common stock, (ii) New Paramount Class A common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time that is not held by a Specified NAI Stockholder and with respect to which an election to receive Class A Cash Consideration has been properly made and not revoked or deemed revoked pursuant to the terms of the Transaction Agreement will be converted automatically into the right to receive the Class A Cash Consideration, (iii) New Paramount Class A common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time that is not held by a Specified NAI Stockholder and with respect to which (A) an election to receive Class A Stock Consideration has been properly made and not revoked or deemed revoked pursuant to the terms of the Transaction Agreement or (B) neither an election to receive Class A Cash Consideration nor an election to receive Class A Stock Consideration has been made will be converted automatically into the right to receive the Class A Stock Consideration, (iv) New Paramount Class B common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time and that is held by a Specified Stockholder or a PIPE Equity Investor (as defined herein) will remain issued and outstanding as one share of New Paramount Class B common stock, (v) New Paramount Class B common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective

Time that is not held by a Specified Stockholder or a PIPE Equity Investor and with respect to which an election to receive Class B Cash Consideration has been properly made and not revoked or deemed revoked pursuant to the terms of the Transaction Agreement will, subject to the proration mechanism described herein, be converted automatically into the right to receive the Class B Cash Consideration, and (vi) New Paramount Class B common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time that is not held by a Specified Stockholder or a PIPE Equity Investor and with respect to which (A) an election to receive the Class B Stock Consideration has been properly made and not revoked or deemed revoked pursuant to the terms of the Transaction Agreement or (B) neither an election to receive Class B Cash Consideration nor an election to receive Class B Stock Consideration has been made will remain issued and outstanding as one share of New Paramount Class B common stock, (b) each share of New Paramount common stock that is held directly or indirectly by Skydance or any wholly-owned subsidiary of Skydance (the “New Paramount Merger Cancelled Shares”) will be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor and (c) each share of capital stock of Paramount Merger Sub II outstanding immediately prior to the New Paramount Merger Effective Time will be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor. All shares of New Paramount common stock that have converted into the right to receive the applicable merger consideration in connection with the New Paramount Merger (other than, subject to the proration mechanism described herein, pursuant to clauses (a)(i), (a)(iv) or (a)(vi) above) will cease to exist and no longer be outstanding. Paramount Class A common stock currently trades on the Nasdaq Stock Market LLC (“Nasdaq”) under the ticker symbol “PARAA,” and Paramount Class B common stock currently trades on Nasdaq under the ticker symbol “PARA.” On July 1, 2024, which was the last trading day prior to renewed market speculation regarding the Transactions, the closing price of Paramount Class A common stock was $17.92 per share, and the closing price of Paramount Class B common stock was $10.14 per share. As a result of the Transactions, (i) holders of Paramount common stock (other than the Specified NAI Stockholders) that have made or are deemed to have made stock elections or whose cash elections are subject to proration will own shares of New Paramount Class B common stock, which are expected to be listed for trading on Nasdaq under the ticker symbol “PARA,” and will not own shares of New Paramount Class A common stock and (ii) National Amusements, Inc., a Maryland corporation (“NAI”), and its applicable subsidiaries will hold shares of New Paramount Class B common stock and 100% of the New Paramount Class A common stock (which is not expected to be listed for trading on a stock exchange). Entities controlled by the Ellison family will hold approximately 77.5% of the New Paramount Class A common stock indirectly through their collective approximate 77.5% ownership interest in NAI.

Upon completion of the Skydance Merger on the Closing Date, (a) each Skydance Membership Unit (as defined herein) that is issued and outstanding immediately prior to the Skydance Merger Effective Time (as defined herein) (other than any Skydance Membership Unit that is held, directly or indirectly, by New Paramount or Skydance) will be converted automatically into the right to receive the applicable portion of 316,666,667 shares of New Paramount Class B common stock as determined in accordance with the Transaction Agreement and the Skydance LLC Agreement (as defined herein), (b) each Skydance Membership Unit that is issued and outstanding immediately prior to the Skydance Merger Effective Time that is held, directly or indirectly, by New Paramount or Skydance will remain as outstanding limited liability company interests in the Surviving Skydance Entity and (c) all of the limited liability company interests of Skydance Merger Sub outstanding immediately prior to the Skydance Merger Effective Time will be converted automatically into an equivalent number of limited liability company interests of the Surviving Skydance Entity with the same rights, powers and privileges as the limited liability company interests so converted. We refer to the date of the closing of the New Paramount Merger, the Blocker Contribution and Exchange and the Skydance Merger as the “Closing Date.”

Concurrently with the execution of the Transaction Agreement, (a) the PIPE Equity Investors entered into subscription agreements (the “Subscription Agreements”) providing for a private placement investment in an aggregate amount of up to $6.0 billion in exchange for receiving (i) up to an aggregate amount of 400 million shares of New Paramount Class B common stock, subject to ratable reduction in accordance with the terms of the Subscription Agreements, for a purchase price of $15.00 per share (less an aggregate subscription discount of 1.875% of such PIPE Equity Investor’s Pro Rata Share (as defined in the Subscription Agreements) of the primary gross proceeds (as defined herein)) and (ii) in the case of the NAI Equity Investors (as defined herein), an aggregate number of 200 million warrants, each to subscribe for one share of New Paramount Class B

common stock per warrant at an initial exercise price of $30.50 per share, with such underlying stock and exercise price subject to customary anti-dilution adjustments, and with an expiration date that is five years from the date of issuance of such warrants, in each case, pursuant to the terms of the Subscription Agreements and (b) the NAI Equity Investors entered into a purchase and sale agreement with NAI, and the NAI Shareholders, pursuant to which the NAI Equity Investors agreed, upon the terms and subject to the conditions set forth in such agreement, to purchase all of the outstanding equity interests of NAI from such stockholders (the “NAI Transaction”). The NAI Transaction and the PIPE Transaction will occur on the Closing Date substantially contemporaneously with each other immediately prior to the completion of the New Paramount Merger. The closings of the NAI Transaction and the PIPE Transaction are each conditioned upon, among other things, the substantially concurrent consummation of the Transactions.

At a meeting held on July 7, 2024, a special committee of the Paramount Board, comprised solely of independent directors who were not affiliated with NAI (the “Special Committee”), unanimously adopted resolutions (a) declaring that the Transaction Agreement and the Transactions are advisable and in the best interests of Paramount and its stockholders, (b) recommending that the Paramount Board approve the Transaction Agreement and the Transactions, including the Mergers, and (c) recommending that the Paramount Board recommend adoption and approval of the Transaction Agreement and the Transactions, including the Mergers, to Paramount stockholders (such recommendation, the “Special Committee Recommendation”).

At a meeting of the Paramount Board held on July 7, 2024, following the meeting of the Special Committee, the members of the Paramount Board who were present at such meeting (each of whom is unaffiliated with NAI) unanimously adopted resolutions (a) declaring that the Transaction Agreement and the Transactions are advisable and in the best interests of Paramount and its stockholders, (b) approving and declaring advisable the Transaction Agreement and the Transactions, (c) authorizing and approving the execution, delivery and performance by Paramount of the Transaction Agreement and the consummation of the Transactions upon the terms and subject to the conditions set forth in the Transaction Agreement, (d) recommending that Paramount stockholders entitled to vote adopt the Transaction Agreement (such recommendation, the “Paramount Board Recommendation”) and (e) directing that the Transaction Agreement and the Transactions, including the Mergers, be submitted to Paramount stockholders entitled to vote for adoption.

The adoption of the Transaction Agreement and, therefore, the approval of the Transactions, required the affirmative approval of a majority of the outstanding Paramount Class A common stock. On July 7, 2024, the Specified NAI Entities (as defined herein) beneficially owned approximately 77.4% of the aggregate voting power of the outstanding Paramount Class A common stock as of July 7, 2024, the record date for determining the stockholders entitled to vote in favor of adopting the Transaction Agreement and approving the Transactions. On the same date, the Specified NAI Entities delivered to Paramount a written consent (the “Written Consent”) adopting and approving the Transaction Agreement and, to the extent the consent of Paramount’s stockholders was required therefor, the Transactions. Accordingly, the delivery of the Written Consent was sufficient to adopt the Transaction Agreement and approve the Transactions on behalf of Paramount stockholders, and no further action by any Paramount stockholder is required to approve the Transactions under applicable law. Therefore, Paramount will not solicit the votes of its stockholders for the adoption or approval of the Transaction Agreement or the Transactions, by special meeting or otherwise, and you are requested not to send a proxy. In addition, you are not entitled to appraisal rights in respect of the Transactions, as further described in this information statement/prospectus.

This information statement/prospectus and notice of action by written consent is being provided to you for informational purposes only and shall be considered the notice required under Section 228(e) of the General Corporation Law of the State of Delaware.

Paramount and Skydance are not required to complete the Transactions unless a number of conditions are satisfied or waived. These conditions to the Closing (as defined herein) include, among others, (a) the absence of legal restraints that would prohibit the consummation of the Mergers or that would impose a material adverse effect on New Paramount and its subsidiaries, taken as a whole after giving effect to the Mergers, (b) the receipt of certain regulatory approvals, (c) the effectiveness of the registration statement on Form S-4, of which this

information statement/prospectus forms a part, and the absence of any stop order or other proceeding that suspends or otherwise threatens such effectiveness, (d) the registration with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”), and the authorization of listing on Nasdaq, of the shares of New Paramount Class B common stock to be issued in connection with the Transactions and (e) the consummation of each of the NAI Transaction and the PIPE Transaction immediately prior to or substantially concurrent with the Closing.

Assuming timely satisfaction or waiver of the conditions to the Closing, the Transactions are expected to close in the first half of 2025. The Closing Date will be at least 20 calendar days after the mailing of the accompanying information statement/prospectus to Paramount stockholders, in accordance with Rule 14c-2(b) promulgated under the Exchange Act.

We encourage you to read this information statement/prospectus (and any documents incorporated by reference into this information statement/prospectus) carefully and in its entirety. Please pay particular attention to the section entitled “Risk Factors” beginning on page 45 of this information statement/prospectus.

On behalf of Paramount, thank you for your continued support.

George Cheeks, Chris McCarthy and Brian Robbins

Office of the Chief Executive Officer

Paramount Global

Neither the SEC nor any state securities commission has approved or disapproved of the Transactions or the securities to be issued in connection therewith, passed upon the adequacy or accuracy of this information statement/prospectus or determined if this information statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

This information statement/prospectus is dated [    ], 2024, and is first being mailed to Paramount stockholders on [    ], 2024.

REFERENCES TO ADDITIONAL INFORMATION

This information statement/prospectus incorporates important business and financial information about Paramount from other documents that Paramount has filed with the SEC and that are contained in, or incorporated by reference into, this information statement/prospectus. For a listing of documents incorporated by reference into this information statement/prospectus, see the section entitled “Where You Can Find More Information” beginning on page 316 of this information statement/prospectus. This information is available for you to review through the SEC’s website at www.sec.gov.

You may request copies of this information statement/prospectus and any of the documents incorporated by reference into this information statement/prospectus or other information concerning Paramount, without charge, by telephone or written request directed to:

Attention: Investor Relations

Paramount Global

1515 Broadway

New York, New York 10036

(212) 846-5237

If you request any such documents, Paramount will mail them to you by first class mail, or another equally prompt means, after receipt of your request. To ensure timely delivery, any request should be made no later than [   ], 2024.

ABOUT THIS INFORMATION STATEMENT/PROSPECTUS

This information statement/prospectus, which forms part of a registration statement on Form S-4 (File No. 333- [   ]) filed with the SEC by New Paramount, constitutes a prospectus of New Paramount under Section 5 of the Securities Act with respect to shares of New Paramount Class B common stock to be issued in connection with the Transactions.

Information contained in or incorporated by reference into this information statement/prospectus relating to Paramount and the Merger Subs has been supplied by Paramount. Information contained in this information statement/prospectus relating to Skydance and New Paramount has been supplied by Skydance. You should rely only on the information contained in or incorporated by reference into this information statement/prospectus. No person has been authorized to provide you with information that is different from what is contained in, or incorporated by reference into, this information statement/prospectus, and, if given or made by any person, such information must not be relied upon as having been authorized. This information statement/prospectus is dated [   ], 2024, and you should not assume that the information contained in this information statement/prospectus is accurate as of any date other than such date. Further, you should not assume that the information incorporated by reference into this information statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this information statement/prospectus to stockholders of Paramount nor the issuance of New Paramount common stock in connection with the Transactions will create any implication to the contrary.

The Paramount logo, “Paramount,” “Skydance” and other registered or common law trademarks, tradenames or service marks appearing or incorporated by reference in this information statement/prospectus are the property of Paramount Global or Skydance Media, LLC, as applicable. Solely for convenience, any Paramount or Skydance trademarks, tradenames or service marks referred to in this information statement/prospectus appear without the ^®, TM, and SM symbols, but those references are not intended to indicate, in any way, that Paramount or Skydance will not assert, to the fullest extent under applicable law, their rights to these trademarks, tradenames or service marks. This information statement/prospectus and the documents incorporated herein by reference may contain additional trademarks, tradenames or service marks of other companies that are the property of their respective owners and which, for convenience, appear without the ^®, TM and SM symbols.

 

i

TABLE OF CONTENTS

 

		Page
CERTAIN DEFINITIONS			1
QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS			8
SUMMARY			21
RISK FACTORS			45
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			84
INFORMATION ABOUT PARAMOUNT, NEW PARAMOUNT AND THE MERGER SUBS			86
INFORMATION ABOUT SKYDANCE			88
THE TRANSACTIONS			89
SUMMARY OF THE TRANSACTION AGREEMENT			168
SUMMARY OF CERTAIN AGREEMENTS RELATED TO THE TRANSACTIONS			208
BUSINESS OF PARAMOUNT			215
BUSINESS OF SKYDANCE			216
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION OF PARAMOUNT			221
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SKYDANCE			222
NEW PARAMOUNT UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS			237
MANAGEMENT AND DIRECTORS OF NEW PARAMOUNT AFTER COMPLETION OF THE TRANSACTIONS			258
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			263
CERTAIN BENEFICIAL OWNERS OF NEW PARAMOUNT VOTING COMMON STOCK			266
INTERESTS OF AFFILIATES IN THE TRANSACTIONS			267
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES			279
DESCRIPTION OF NEW PARAMOUNT’S CAPITAL STOCK			286
COMPARISON OF STOCKHOLDER RIGHTS			296
NO DISSENTERS’ OR APPRAISAL RIGHTS			312
EXPERTS			313
HOUSEHOLDING OF INFORMATION STATEMENT/PROSPECTUS MATERIALS			314
LEGAL MATTERS			315
WHERE YOU CAN FIND MORE INFORMATION			316
CONSOLIDATED FINANCIAL STATEMENTS OF SKYDANCE MEDIA, LLC			F-1
Annex A Transaction Agreement			A-1
Annex B Form of Amended and Restated Certificate of Incorporation of New Pluto Global, Inc.			B-1
Annex C Form of Amended and Restated Bylaws of New Pluto Global, Inc.			C-1
Annex D Opinion of Centerview Partners LLC			D-1
Annex E Form of Subscription Agreement			E-1
Annex F Voting and Support Agreement			F-1

CERTAIN DEFINITIONS

Unless otherwise indicated, each reference in this information statement/prospectus to:

“A&R Bylaws” means the amended and restated bylaws of New Paramount as in effect as of the New Paramount Merger Effective Time, the form of which is attached as Annex C;

“A&R Charter” means the amended and restated certificate of incorporation of New Paramount as in effect as of the New Paramount Merger Effective Time, the form of which is attached as Annex B;

“affiliate” means, for purposes of the Transaction Agreement, as to any person, any other person that, directly or indirectly, controls, or is controlled by, or is under common control with, such person. For this purpose, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise. Notwithstanding the foregoing, (a) except for certain purposes as described in the Transaction Agreement, Skydance and its subsidiaries will not be deemed to be affiliates of (i) any member of Skydance, (ii) any investment funds or investment vehicles affiliated with, or managed or advised by, any member of Skydance or (iii) any portfolio companies (as such term is commonly understood in the private equity industry) of any member of Skydance and (b) with respect to Paramount, “affiliate” means any person that is controlled, directly or indirectly, by Paramount;

“Blocker” means the Upstream Blocker (as defined in the Transaction Agreement) with respect to any Blocker Holder;

“Blocker Contribution and Exchange” means the transfer by each Upstream Blocker Holder (as defined in the Transaction Agreement) of all of the Upstream Blocker Securities held by such Upstream Blocker Holder to New Paramount, and the acquisition by New Paramount of all of the Upstream Blocker Securities held by each Upstream Blocker Holder in exchange for New Paramount Class B common stock, in each case immediately following the New Paramount Merger and immediately prior to the Skydance Merger;

“Blocker Holder” means any Upstream Blocker Holder that participates in the Blocker Contribution and Exchange, excluding any Non-Participating Blocker Holder (as defined in the Transaction Agreement);

“Cancelled Shares” means the Pre-Closing Paramount Merger Cancelled Shares and the New Paramount Merger Cancelled Shares;

“Class A Cash Consideration” means an amount of cash, without interest, equal to $23.00;

“Class A Stock Consideration” means 1.5333 shares of New Paramount Class B common stock;

“Class B Cash Cap” means $4,288,338,180.00;

“Class B Cash Consideration” means an amount of cash, without interest, equal to $15.00;

“Class B Stock Consideration” means one share of New Paramount Class B common stock;

“Closing” means, collectively, the closing of the New Paramount Merger, the Blocker Contribution and Exchange and the Skydance Merger;

“Closing Date” means the date on which the Closing actually occurs;

“Code” means the Internal Revenue Code of 1986, as amended;

 

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“DGCL” means the General Corporation Law of the State of Delaware;

“DTC” means the Depository Trust Company;

“Effective Time” means the Pre-Closing Paramount Merger Effective Time, the New Paramount Merger Effective Time or the Skydance Merger Effective Time, as the context requires;

“Election Deadline” means 5:00 p.m. local time (in the city in which the principal office of the exchange agent is located) on the date that is five business days prior to the good faith estimate of the Closing Date by the parties to the Transaction Agreement or such other date as may be mutually agreed to by such parties;

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;

“Governance Agreement” means the Governance Agreement, dated as of August 13, 2019, by and among the parties listed therein;

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

“Merger Subs” means, collectively, Paramount Merger Sub, Paramount Merger Sub II and Skydance Merger Sub;

“Mergers” means, collectively, the Pre-Closing Paramount Merger, the New Paramount Merger and the Skydance Merger;

“NAI” means National Amusements, Inc., a Maryland corporation;

“NAIEH” means NAI Entertainment Holdings LLC, a Delaware limited liability company and wholly-owned subsidiary of NAI;

“NAI Equity Investors” means, collectively, Pinnacle and RedBird;

“NAI Shareholders” means, collectively, (a) Sumner M. Redstone National Amusements Part B General Trust (also known as NA Part B General Trust), an irrevocable non-grantor trust established under a Declaration of Trust dated June 28, 2002, as amended, (b) Shari Ellin Redstone Trust, a revocable trust established under a Declaration of Trust dated October 18, 1999, and (c) Shari E. Redstone Qualified Annuity Interest Trust XIX, an irrevocable trust established under a Trust Agreement dated July 31, 2023;

“NAI Stock Purchase Agreement” means the Purchase and Sale Agreement, dated as of July 7, 2024, by and among the NAI Equity Investors, NAI, the NAI Shareholders, Hikouki, LLC, a Delaware limited liability company (in its capacity as the buyers’ agent thereunder), and Neptune Agent, LLC, a Delaware limited liability company (solely in its capacity as sellers’ agent thereunder);

“NAI Transaction” means the purchase by the NAI Equity Investors of all of the outstanding equity interests of NAI from the NAI Shareholders, upon the terms and subject to the conditions set forth in the NAI Stock Purchase Agreement;

“Nasdaq” means The Nasdaq Stock Market LLC or any successor thereto;

“New Paramount” means New Pluto Global, Inc., a Delaware corporation and a wholly-owned, direct subsidiary of Paramount;

“New Paramount Board” means the board of directors of New Paramount;

 

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“New Paramount Class A common stock” means the Class A common stock, $0.001 par value per share, of New Paramount;

“New Paramount Class B common stock” means the Class B common stock, $0.001 par value per share, of New Paramount;

“New Paramount common stock” means, collectively, the New Paramount Class A common stock and New Paramount Class B common stock;

“New Paramount Merger” means the merger of Paramount Merger Sub II with and into New Paramount, with New Paramount surviving the merger, subject to the terms and conditions of the Transaction Agreement;

“New Paramount Merger Cancelled Shares” means, collectively, each share of New Paramount common stock that is held directly or indirectly by Skydance or any wholly-owned subsidiary of Skydance;

“New Paramount Merger Effective Time” means the effective time of the New Paramount Merger;

“Paramount” means Paramount Global, a Delaware corporation;

“Paramount Associate” means each current or former officer, employee, individual independent contractor, individual consultant, or individual manager or director of Paramount or any of its subsidiaries, excluding any talent, cast or crew engaged in connection with certain properties;

“Paramount Board” means the board of directors of Paramount;

“Paramount bylaws” means the amended and restated bylaws of Paramount as in effect as of the date of this information statement/prospectus;

“Paramount charter” means the amended and restated certificate of incorporation of Paramount as in effect as of the date of this information statement/prospectus;

“Paramount Class A common stock” means the Class A common stock, $0.001 par value per share, of Paramount;

“Paramount Class B common stock” means the Class B common stock, $0.001 par value per share, of Paramount;

“Paramount common stock” means, collectively, the Paramount Class A common stock and Paramount Class B common stock;

“Paramount DC Plans” means, collectively, Paramount’s two Deferred Compensation Plans for Outside Directors, Paramount’s two Excess 401(k) Plans, Paramount’s two Excess 401(k) Plans for Designated Senior Executives, Paramount’s two Bonus Deferral Plans, Paramount’s two Bonus Deferral Plans for Designated Senior Executives, Paramount’s Supplemental Employee Investment Fund, and Westinghouse Deferred Incentive Compensation Plan;

“Paramount Equity Plans” means, collectively, Paramount’s 2009 Long-Term Incentive Plan, Paramount’s 2016 Long-Term Management Incentive Plan, Paramount’s 2005 RSU Plan for Outside Directors, Paramount’s 2011 RSU Plan for Outside Directors and Paramount’s 2015 Equity Plan for Outside Directors, in each case, as amended or restated from time to time;

“Paramount Merger Sub” means Pluto Merger Sub, Inc., a Delaware corporation and a wholly-owned, direct subsidiary of New Paramount;

 

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“Paramount Merger Sub II” means Pluto Merger Sub II, Inc., a Delaware corporation and a wholly-owned, direct subsidiary of New Paramount;

“Paramount Notional Unit” means each notional investment unit with respect to Paramount Class B common stock subject to a Paramount DC Plan;

“Paramount Option” means an option to purchase shares of Paramount Class B common stock (whether or not granted pursuant to any Paramount Equity Plan);

“Paramount Parties” means Paramount, any of its subsidiaries, and any of their respective current or former stockholders, optionholders, unitholders, members, affiliates or representatives;

“Paramount Pictures” means Paramount Pictures Corporation;

“Paramount PSU Award” means an award of restricted share units with respect to Paramount Class B common stock (whether or not granted pursuant to any Paramount Equity Plan), the vesting of which is conditioned in whole or in part on the satisfaction of any performance goals or metrics;

“Paramount RSU Award” means an award of restricted share units with respect to Paramount Class B common stock (whether or not granted pursuant to any Paramount Equity Plan) that is not a Paramount PSU Award;

“Paramount stockholders” means holders of Paramount common stock;

“Pinnacle” means Pinnacle Media Ventures, LLC, Pinnacle Media Ventures II, LLC and Pinnacle Media Ventures III, LLC, each a Delaware limited liability company controlled by the Ellison family;

“PIPE Equity Investors” means the NAI Equity Investors and certain other affiliates of investors of Skydance;

“PIPE Transaction” means the transaction in which the PIPE Equity Investors entered into Subscription Agreements providing for a private placement investment in an aggregate amount of up to $6.0 billion in exchange for receiving (a) up to an aggregate amount of 400 million shares of New Paramount Class B common stock, subject to ratable reduction in accordance with the terms of the Subscription Agreements, for a purchase price of $15.00 per share (less an aggregate subscription discount of 1.875% of such PIPE Equity Investor’s Pro Rata Share of the primary gross proceeds, as defined herein) and (b) in the case of the NAI Equity Investors, an aggregate number of 200 million warrants, each to subscribe for one share of New Paramount Class B common stock per warrant at an initial exercise price of $30.50 per share, with such underlying stock and exercise price subject to customary anti-dilution adjustments, and with an expiration date that is five years from the date of issuance of such warrants, in each case, pursuant to the terms of the Subscription Agreements, to be consummated immediately prior to the consummation of the New Paramount Merger;

“Pre-Closing Paramount Merger” means the merger of Paramount Merger Sub with and into Paramount, with Paramount surviving the merger and becoming a wholly-owned, direct subsidiary of New Paramount, subject to the terms and conditions of the Transaction Agreement;

“Pre-Closing Paramount Merger Cancelled Shares” means each (a) share of Paramount common stock that is owned by Paramount as treasury stock or otherwise (excluding, for the avoidance of doubt, any shares of Paramount Class B common stock held by any Paramount Employee Plan (as defined in the Transaction Agreement) or trust related thereto) or (b) share of New Paramount common stock that is held directly by Paramount immediately prior to the Pre-Closing Paramount Merger Effective Time;

 

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“Pre-Closing Paramount Merger Effective Time” means the effective time of the Pre-Closing Paramount Merger;

“RedBird” means RB Tentpole LP, a Delaware limited partnership;

“Registration Rights Agreement” means a registration rights agreement on substantially the terms agreed to by the parties in connection with the Transaction Agreement;

“Skydance” means Skydance Media, LLC, a California limited liability company;

“Skydance Associate” means each current or former officer, employee, individual independent contractor, individual consultant, or individual manager or director of Skydance or any of its subsidiaries, excluding any talent, cast or crew engaged in connection with certain properties;

“Skydance LLC Agreement” means the Eighth Amended and Restated Limited Liability Company Agreement of Skydance, dated as of January 3, 2023, as amended on March 15, 2023, and as may be further amended from time to time (to the extent permitted by the terms of the Transaction Agreement);

“Skydance Membership Units” means the “Class A Membership Units,” the “Class B Membership Units” (including any Class B Membership Units designated as “Profits Interest Units”), the “Class C Membership Units,” the “Class D Membership Units” or any other “Profits Interest Units,” as applicable (each as defined in the Skydance LLC Agreement);

“Skydance Merger” means the merger of Skydance Merger Sub with and into Skydance, with Skydance surviving the merger and becoming a wholly-owned subsidiary of New Paramount, subject to the terms and conditions of the Transaction Agreement;

“Skydance Merger Consideration” means 316,666,667 shares of New Paramount Class B common stock;

“Skydance Merger Effective Time” means the effective time of the Skydance Merger;

“Skydance Merger Sub” means Sparrow Merger Sub, LLC, a California limited liability company and wholly-owned, direct subsidiary of New Paramount;

“Skydance Phantom Units” means “Phantom Units” (as defined in the Skydance 2019 Phantom Unit Plan, as amended from time to time);

“Skydance Profits Interest Units” means, collectively, the membership units issued by Skydance designated as “Profits Interest Units” in the books and records of Skydance and the holders of which having the rights to distributions and allocations set forth in the Skydance LLC Agreement, including the “Class B Membership Units” that are designated as “Profits Interest Units,” “Class C Membership Units” and “Class D Membership Units” (each as defined in the Skydance LLC Agreement);

“Skydance Sports Phantom Units” means phantom units issued under a phantom unit plan to be adopted by Skydance Sports, LLC, as amended from time to time;

“Special Committee” means the special committee of the Paramount Board consisting solely of independent directors who were not affiliated with NAI, which the Paramount Board established to, among other things, review, evaluate and negotiate the terms and conditions, and determine the advisability, of strategic alternatives for Paramount and, if such special committee deemed appropriate, recommend that the Paramount Board approve any such strategic alternative for Paramount;

“Specified NAI Entities” means, collectively, NAI, NAIEH and SPV-NAIEH;

 

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“Specified NAI Stockholders” means, collectively, NAI, NAIEH, SPV-NAIEH and any permitted subsidiary transferee to which any of the foregoing transfers its shares of Paramount common stock;

“Specified Stockholders” means, collectively, (a) NAI, NAIEH, SPV-NAIEH and any permitted subsidiary transferee to which any of the foregoing transfers its shares of Paramount common stock and (b) other than for certain purposes described in the Transaction Agreement, Shari E. Redstone and her personal revocable trusts that hold shares of Paramount common stock;

“SPV-NAIEH” means SPV-NAIEH LLC, a Delaware limited liability company and wholly-owned subsidiary of NAI;

“Subscription Agreements” means the subscription agreements, dated as of July 7, 2024, by and among Paramount, New Paramount and each PIPE Equity Investor relating to the PIPE Transaction, a copy of the form of which is attached as Annex E and is incorporated by reference into this information statement/prospectus;

“Surviving Paramount Entity” means Paramount following completion of the Pre-Closing Paramount Merger;

“Surviving Skydance Entity” means Skydance following completion of the Skydance Merger;

“Transaction Agreement” means the Transaction Agreement, dated as of July 7, 2024, by and among Paramount, Skydance, New Paramount, Paramount Merger Sub, Paramount Merger Sub II, Skydance Merger Sub and the Upstream Blocker Holders (solely with respect to certain sections of the Transaction Agreement as specified therein), a copy of which is attached as Annex A and is incorporated by reference into this information statement/prospectus;

“Transaction Expenses” means (a) all reasonable and documented out-of-pocket fees and expenses incurred in connection with the Transaction Agreement and the Transactions by Skydance, Paramount, New Paramount and their respective subsidiaries (including, for certainty, all fees and expenses payable to brokers, financial advisors and investment banks in connection with the Transactions), as applicable, and (b) all reasonable and documented out-of-pocket fees and expenses incurred in connection with the PIPE Transaction by Paramount, New Paramount, their respective subsidiaries and the PIPE Equity Investors (in the case of the PIPE Equity Investors, up to a maximum of $5 million) but, in each case, for the avoidance of doubt, (i) without duplication of any such fees and expenses paid or reimbursed pursuant to the NAI Stock Purchase Agreement, (ii) other than as set forth in this definition, excluding any fees and expenses incurred by any person other than Skydance, Paramount, New Paramount and their respective subsidiaries, as applicable, and (iii) excluding the fees and expenses of legal counsel incurred by the applicable PIPE Equity Investors in connection with the NAI Transaction;

“Transactions” means, collectively, the Mergers, the Blocker Contribution and Exchange, the PIPE Transaction and the other transactions contemplated by the Transaction Agreement (other than the NAI Transaction);

“Upstream Blocker Securities” means, collectively, the issued and outstanding equity interests in the Upstream Blockers;

“Voting Agreement” means the Voting and Support Agreement, dated as of July 7, 2024, by and among Skydance, Paramount, the Specified NAI Entities, Shari Ellin Redstone Trust and Shari E. Redstone Qualified Annuity Interest Trust XVIII, a copy of which is attached as Annex F;

“Written Consent” means the written consent, dated July 7, 2024, delivered to Paramount by the Specified NAI Entities, which beneficially owned approximately 77.4% of the aggregate voting power of the outstanding Paramount Class A common stock as of July 7, 2024, the record date for determining the stockholders entitled to vote in favor of adopting the Transaction Agreement and approving the Transactions; and

 

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“$” or “dollars” means United States dollars.

Certain sections in this information statement/prospectus refer to a number of shares of New Paramount common stock immediately following the completion of the Transactions, including for the purposes of stating the beneficial ownership of certain persons and the number of shares underlying certain securities. Unless otherwise specified, such calculations are based upon the information included in this information statement/prospectus.

 

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QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS

The following questions and answers are intended to briefly address some commonly asked questions regarding the Transaction Agreement and the Transactions. You are encouraged to carefully read the remainder of this information statement/prospectus, the annexes and exhibits attached to this information statement/prospectus and the documents that are referred to in, and incorporated by reference into, this information statement/prospectus and to pay special attention to the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 45 and 84, respectively, of this information statement/prospectus because the information contained in this section may not provide all the information that might be important to you with respect to the Transaction Agreement and the Transactions. For further information, see the section entitled “Where You Can Find More Information” beginning on page 316 of this information statement/prospectus.

 

Q:	What is the proposed transaction and what effect will it have on Paramount?

 

A:

On July 7, 2024, Paramount entered into the Transaction Agreement, pursuant to which Paramount and Skydance will become wholly-owned subsidiaries of New Paramount, a new publicly listed company, once the Transactions are completed. In connection with the Transaction Agreement, Paramount formed New Paramount and, as direct subsidiaries of New Paramount, the Merger Subs. Subject to the terms and conditions of the Transaction Agreement, (a) on the day immediately prior to the Closing Date, Paramount Merger Sub will merge with and into Paramount, with Paramount surviving the merger, (b) on the Closing Date, Paramount Merger Sub II will merge with and into New Paramount, with New Paramount surviving the merger, (c) on the Closing Date, following the New Paramount Merger, the Upstream Blocker Holders will transfer all of the issued and outstanding equity interests in certain blocker entities to New Paramount in exchange for an allocation of the Skydance Merger Consideration and (d) on the Closing Date, following the Blocker Contribution and Exchange, Skydance Merger Sub will merge with and into Skydance, with Skydance surviving the merger. As a result of the Transactions, Paramount and Skydance will become wholly-owned subsidiaries of New Paramount, which will be renamed “[   ]” immediately following the completion of the Mergers.

As a result of the Transactions, (i) former holders of Paramount common stock (other than the Specified NAI Stockholders) that have made or are deemed to have made stock elections or whose cash elections are subject to proration will own shares of New Paramount Class B common stock, which are expected to be listed for trading on Nasdaq under the ticker symbol “PARA,” and will not own shares of New Paramount Class A common stock, and (ii) NAI and its applicable subsidiaries will hold shares of New Paramount Class B common stock and 100% of the New Paramount Class A common stock (which is not expected to be listed for trading on a stock exchange). Entities controlled by the Ellison family will hold approximately 77.5% of the New Paramount Class A common stock indirectly through their collective approximate 77.5% ownership interest in NAI. For further information on the rights of such shares, see the section entitled “Summary of the Transaction Agreement—Merger Consideration; Conversion of Shares; Exchange of Certificates” beginning on page 170 of this information statement/prospectus. In addition, if the Transactions are completed, Paramount Class A common stock and Paramount Class B common stock will be delisted from Nasdaq, will be deregistered under the Exchange Act and will cease to be publicly traded. If the Transactions are not completed, Paramount Class A common stock and Paramount Class B common stock will continue to be listed and traded on Nasdaq and registered under the Exchange Act.

Concurrently with the execution of the Transaction Agreement, (a) the PIPE Equity Investors entered into the Subscription Agreements providing for a private placement investment in an aggregate amount of up to $6.0 billion in exchange for receiving (i) up to an aggregate amount of 400 million shares of New Paramount Class B common stock, subject to ratable reduction in accordance with the terms of the Subscription Agreements, for a purchase price of $15.00 per share (less an aggregate subscription discount of 1.875% of such PIPE Equity Investor’s Pro Rata Share of the primary gross proceeds, as defined herein) and (ii) in the case of the NAI Equity Investors, an aggregate number of 200 million warrants, each to subscribe for one share of New Paramount Class B common stock per warrant at an initial exercise price of

 

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$30.50 per share, with such underlying stock and exercise price subject to customary anti-dilution adjustments, and with an expiration date that is five years from the date of issuance of such warrants, in each case, pursuant to the terms of the Subscription Agreements and (b) the NAI Equity Investors entered into a purchase and sale agreement with NAI and the NAI Shareholders, pursuant to which the NAI Equity Investors agreed, upon the terms and subject to the conditions set forth in such agreement, to purchase all of the outstanding equity interests of NAI from such stockholders. The NAI Transaction and the PIPE Transaction will occur on the Closing Date substantially contemporaneously with each other immediately prior to the completion of the New Paramount Merger. The closings of the NAI Transaction and the PIPE Transaction are each conditioned upon, among other things, the substantially concurrent consummation of the Transactions.

We have included in this information statement/prospectus important information about the Transactions and the Transaction Agreement (a copy of which is attached as Annex A and is incorporated by reference into this information statement/prospectus). You should carefully read this information and the documents referred to herein in their entirety.

Please note that the delivery of the Written Consent was sufficient to adopt the Transaction Agreement and approve the Transactions on behalf of Paramount stockholders, and no further action by any Paramount stockholder is required to approve the Transactions under applicable law. Therefore, Paramount will not solicit the votes of its stockholders for the adoption or approval of the Transaction Agreement or the Transactions by special meeting or otherwise, and you are requested not to send a proxy. In addition, you are not entitled to appraisal rights in respect of the Transactions, as further described in this information statement/prospectus.

 

Q:	Why am I receiving this information statement/prospectus?

 

A:

Securities and corporate laws and regulations require us to provide you with notice of the Written Consent that was delivered by the Specified NAI Entities, as well as other information regarding the Transactions, even though your vote or consent is neither required nor requested to adopt the Transaction Agreement or complete the Transactions.

 

Q:	Why did the Paramount Board form a special committee of independent directors?

 

A:

Certain of Paramount’s directors, executive officers and employees have interests in the Transactions that are different from, or in addition to, the interests of Paramount stockholders. For further information, see the sections entitled “Interests of Affiliates in the Transactions—Interests of Paramount Affiliates in the Transactions—Interests of Paramount’s Executive Officers and Directors in the Transactions” and “Risk Factors—Risks Relating to the Transactions—Executive officers, directors and affiliates of Paramount and Skydance may have interests in the Transactions that are different from, or in addition to, the rights of the Paramount stockholders and Skydance equityholders, respectively” beginning on pages 267 and 52, respectively, of this information statement/prospectus.

The Paramount Board established the Special Committee to, among other things, review, evaluate and negotiate the terms and conditions, and determine the advisability, of strategic alternatives for Paramount and, if the Special Committee deemed appropriate, recommend that the Paramount Board approve such strategic alternative for Paramount. Each member of the Special Committee (a) is not affiliated with NAI, (b) is not a member of Paramount management, (c) does not have an interest in the proposed transaction and (d) otherwise does not have any interest or relationship that would interfere with the exercise of his or her independent judgment in carrying out the responsibilities of, or that is likely to have an adverse impact on his or her ability to fulfill his or her obligations as a member of, the Special Committee in evaluating any potential transaction. See the section entitled “The Transactions—Background of the Transactions” beginning on page 93 of this information statement/prospectus.

The members of the Special Committee and the Paramount Board who recommended that Paramount stockholders entitled to vote adopt the Transaction Agreement and approve the Transactions were aware of

 

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and considered these interests to the extent such interests existed at the time, among other matters, during their respective deliberations on the merits of the Transactions, in negotiating, evaluating and approving the Transaction Agreement and the Transactions, and in making the Paramount Board’s recommendation that the Paramount stockholders entitled to vote adopt the Transaction Agreement and approve the Transactions.

 

Q:	What did the Special Committee determine and recommend to the Paramount Board?

 

A:

At a meeting of the Special Committee held on July 7, 2024, the Special Committee unanimously adopted resolutions (a) declaring that the Transaction Agreement and the Transactions are advisable and in the best interests of Paramount and its stockholders, (b) recommending that the Paramount Board approve the Transaction Agreement and the Transactions, including the Mergers, and (c) recommending that the Paramount Board recommend adoption and approval of the Transaction Agreement and the Transactions, including the Mergers, to Paramount stockholders.

For further information, see the section entitled “The Transactions—Recommendations of the Special Committee and the Paramount Board; Paramount’s Reasons for the Transactions” beginning on page 140 of this information statement/prospectus.

 

Q:	Did the Paramount Board approve and recommend the Transaction Agreement?

 

A:

Yes. At a meeting of the Paramount Board held on July 7, 2024, following the meeting of the Special Committee, the members of the Paramount Board who were present at such meeting (each of whom is unaffiliated with NAI) unanimously adopted resolutions (a) declaring that the Transaction Agreement and the Transactions are advisable and in the best interests of Paramount and its stockholders, (b) approving and declaring advisable the Transaction Agreement and the Transactions, (c) authorizing and approving the execution, delivery and performance by Paramount of the Transaction Agreement and the consummation of the Transactions upon the terms and subject to the conditions set forth in the Transaction Agreement, (d) recommending that Paramount stockholders entitled to vote adopt the Transaction Agreement and (e) directing that the Transaction Agreement and the Transactions, including the Mergers, be submitted to Paramount stockholders entitled to vote for adoption. The members of the Paramount Board who were present at such meeting were Barbara M. Byrne, Linda M. Griego, Judith A. McHale, Charles E. Phillips, Jr. and Susan Schuman. Shari E. Redstone recused herself from the meeting and was not in attendance.

For further information, see the section entitled “The Transactions—Recommendations of the Special Committee and the Paramount Board; Paramount’s Reasons for the Transactions” beginning on page 140 of this information statement/prospectus.

 

Q:	What will Paramount stockholders receive in the Transactions?

 

A:

Upon completion of the Pre-Closing Paramount Merger on the day immediately prior to the Closing Date, each share, other than any Pre-Closing Paramount Merger Cancelled Shares, of (a) Paramount Class A common stock that is issued and outstanding immediately prior to the Pre-Closing Paramount Merger Effective Time will be converted automatically into the right to receive one share of New Paramount Class A common stock and (b) Paramount Class B common stock that is issued and outstanding immediately prior to the Pre-Closing Paramount Merger Effective Time will be converted automatically into the right to receive one share of New Paramount Class B common stock. All shares of Paramount common stock that have been converted to shares of New Paramount common stock in the Pre-Closing Paramount Merger will automatically be cancelled and will cease to exist and no longer be outstanding as shares of Paramount common stock.

In connection with the New Paramount Merger, Paramount stockholders (other than the Specified Stockholders, with respect to shares of Paramount Class B common stock, and the Specified NAI Stockholders, with respect to shares of Paramount Class A common stock) are entitled to make an election as to the form of consideration received for their shares of Paramount common stock held immediately prior

 

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to the Pre-Closing Paramount Merger. Paramount stockholders (other than the Specified Stockholders, with respect to shares of Paramount Class B common stock, and the Specified NAI Stockholders, with respect to shares of Paramount Class A common stock) may elect to receive, in accordance with the election procedures and subject to the proration mechanism set forth in the Transaction Agreement and described herein, (a) with respect to each share of Paramount Class A common stock held by such stockholder (i) the Class A Cash Consideration or (ii) the Class A Stock Consideration and (b) with respect to each share of Paramount Class B common stock held by such stockholder (i) the Class B Cash Consideration or (ii) the Class B Stock Consideration. The maximum amount of cash consideration that holders of Paramount Class B common stock will be entitled to receive pursuant to the New Paramount Merger is approximately $4.3 billion in the aggregate, and a maximum of 285,889,212 shares of Paramount Class B common stock will be entitled to receive the Class B Cash Consideration. The elections to receive Class B Cash Consideration will be prorated as necessary to ensure that these limits are not exceeded.

Upon completion of the New Paramount Merger on the Closing Date, (a) each share, other than any New Paramount Merger Cancelled Shares, of (i) New Paramount Class A common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time and that is held by a Specified NAI Stockholder will remain issued and outstanding as a share of New Paramount Class A common stock, (ii) New Paramount Class A common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time that is not held by a Specified NAI Stockholder and with respect to which an election to receive Class A Cash Consideration has been properly made and not revoked or deemed revoked pursuant to the terms of the Transaction Agreement will be converted automatically into the right to receive the Class A Cash Consideration, (iii) New Paramount Class A common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time that is not held by a Specified NAI Stockholder and with respect to which (A) an election to receive Class A Stock Consideration has been properly made and not revoked or deemed revoked pursuant to the terms of the Transaction Agreement or (B) neither an election to receive Class A Cash Consideration nor an election to receive Class A Stock Consideration has been made will be converted automatically into the right to receive the Class A Stock Consideration, (iv) New Paramount Class B common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time and that is held by a Specified Stockholder or a PIPE Equity Investor will remain issued and outstanding as one share of New Paramount Class B common stock, (v) New Paramount Class B common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time that is not held by a Specified Stockholder or a PIPE Equity Investor and with respect to which an election to receive Class B Cash Consideration has been properly made and not revoked or deemed revoked pursuant to the terms of the Transaction Agreement will, subject to the proration mechanism described herein, be converted automatically into the right to receive the Class B Cash Consideration and (vi) New Paramount Class B common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time that is not held by a Specified Stockholder or a PIPE Equity Investor and with respect to which (A) an election to receive the Class B Stock Consideration has been properly made and not revoked or deemed revoked pursuant to the terms of the Transaction Agreement or (B) neither an election to receive Class B Cash Consideration nor an election to receive Class B Stock Consideration has been made will remain issued and outstanding as one share of New Paramount Class B common stock; (b) each New Paramount Merger Cancelled Share will be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor and (c) each share of capital stock of Paramount Merger Sub II outstanding immediately prior to the New Paramount Merger Effective Time will be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor. All shares of New Paramount common stock that have converted into the right to receive the applicable merger consideration in connection with the New Paramount Merger (other than, subject to the proration mechanism described herein, pursuant to clauses (a)(i), (a)(iv) or (a)(vi) above) will cease to exist and no longer be outstanding.

For further information, see the section entitled “Summary of the Transaction Agreement—Merger Consideration; Conversion of Shares; Exchange of Certificates” beginning on page 170 of this information statement/prospectus.

 

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Q:	How do I calculate the value of the Class A Stock Consideration and the Class B Stock Consideration?

 

A:

Holders of Paramount Class A common stock, other than the Specified NAI Stockholders, may elect to receive, with respect to each share of Paramount Class A common stock held by such holder, the Class A Cash Consideration or the Class A Stock Consideration, and holders of Paramount Class B common stock, other than the Specified Stockholders and the PIPE Equity Investors, may elect to receive, with respect to each share of Paramount Class B common stock held by such holder, the Class B Cash Consideration or the Class B Stock Consideration, subject to proration if elections to receive Class B Cash Consideration exceed approximately $4.3 billion in the aggregate. The value to Paramount stockholders electing to receive New Paramount Class B common stock will therefore depend on the price per share of Paramount common stock at the Effective Time.

The market price of Paramount Class A common stock and Paramount Class B common stock has fluctuated since the date of the announcement of the Transaction Agreement and will continue to fluctuate from the date of this information statement/prospectus until the date the Transactions are completed. Because the exchange ratios described above will not be adjusted to reflect any changes in the market price of Paramount common stock, the market value of the New Paramount common stock issued in the Transactions may be higher or lower than the values of Paramount common stock on earlier dates. Until the completion of the Transactions, Paramount stockholders will not know or be able to determine the value, on a fully diluted basis, of the New Paramount Class B common stock. See the section entitled “Risk Factors—Risks Relating to the Transactions—The stock consideration exchange ratios are fixed and will not be adjusted for stock price changes. Because the market prices of Paramount Class A common stock and Paramount Class B common stock have fluctuated and will continue to fluctuate, Paramount stockholders cannot be sure of the value of the stock consideration they will receive, and such value may be lower than the value of Paramount common stock on an earlier date” beginning on page 45 of this information statement/prospectus.

On July 1, 2024, which was the last trading day prior to renewed market speculation regarding the Transactions, the closing price of Paramount Class A common stock was $17.92 per share, and the closing price of Paramount Class B common stock was $10.14 per share. On [   ], 2024, which was the latest practicable date before the printing of this information statement/prospectus, the closing price of Paramount Class A common stock was $[   ] per share, and the closing price of Paramount Class B common stock was $[   ] per share.

 

Q:	How do I elect the type of merger consideration that I prefer to receive?

 

A:

Not less than 20 business days prior to the anticipated Election Deadline, an election form will be mailed to each holder of record of shares of Paramount common stock (other than a Specified NAI Stockholder) as of the fifth business day prior to such mailing date. To elect to receive the applicable cash consideration, the applicable stock consideration or a combination of the two, you must indicate on the election form the number of shares of Paramount common stock with respect to which you elect to receive the applicable cash consideration and/or the number of shares of Paramount common stock with respect to which you elect to receive the applicable stock consideration. If you are making an election with respect to certificated shares, the completed election form must be accompanied by share certificates representing all of the certificated shares to which such election form relates or by a guarantee of delivery of such share certificates, as set forth in the election form. You must return the election form and any accompanying materials in the pre-addressed, postage prepaid return envelope provided so that it is received no later than that Election Deadline. Paramount and Skydance will issue a press release announcing the Election Deadline at least three business days prior to the Election Deadline. Paramount and Skydance currently expect the Election Deadline to be 5:00 p.m. (New York City time) on [   ]. Paramount and Skydance will promptly announce any delay of the Election Deadline.

If you hold shares of Paramount common stock in “street name,” you should receive instructions from the bank, brokerage firm or other nominee that is holding your shares advising you of the procedures for

 

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making your election. If these instructions are not received, you should contact the bank, brokerage firm or other nominee holding your shares. Election forms must be returned to the bank, brokerage firm or other nominee in time for it to respond prior to the Election Deadline.

 

Q:	Can I make one election for some of my shares of Paramount common stock and another election for the rest?

 

A:

Yes, subject to the proration mechanism described below. The election form will permit you to specify, among the shares of Paramount common stock you hold, the number of shares of Paramount common stock for which (a) you are electing to receive the applicable cash consideration, (b) you are electing to receive the applicable stock consideration or (c) you make no election.

The maximum amount of cash consideration that holders of Paramount Class B common stock will be entitled to receive pursuant to the New Paramount Merger is approximately $4.3 billion in the aggregate, and a maximum of 285,889,212 shares of Paramount Class B common stock will be entitled to receive the Class B Cash Consideration. The cash consideration payable to holders of Paramount Class B common stock in the New Paramount Merger will be subject to proration in the event that the number of cash elections made by such stockholders in the aggregate exceeds this limit. Accordingly, a holder of Paramount Class B common stock may receive less cash consideration than selected by such holder and such difference may be significant. See the section entitled “Risk Factors—Risks Relating to the Transactions—Holders of Paramount Class B common stock may not receive all merger consideration in the form they elect, and the form of merger consideration that they receive may have a lower value or different tax consequences than the form of merger consideration that they elect to receive” beginning on page 46 of this information statement/prospectus.

 

Q:	What if I do not make an election, my election form is not received before the Election Deadline or my election is not properly made?

 

A:

If you do not deliver to the exchange agent by the Election Deadline a properly completed and signed election form (including duly executed transmittal materials included in the election form) and, as applicable, accompanying share certificates representing all certificated shares (if any) to which such election form relates or by a guarantee of delivery of such share certificates, as set forth in the election form, then you will be deemed to have made no election and will therefore receive the applicable stock consideration in exchange for your shares of Paramount common stock. None of Paramount, New Paramount, Skydance or the exchange agent are under any duty to notify you of any defect with respect to any election.

 

Q:	Can I change my election after I submit an election form?

 

A:

Yes. You may change your election of applicable merger consideration with respect to all or a portion of your shares of Paramount common stock by delivering written notice to the exchange agent prior to the Election Deadline accompanied by a properly completed and signed election form. In addition, prior to the Election Deadline, you may revoke your election by delivering written notice to the exchange agent or by withdrawing your share certificates (if applicable), or the guarantee of delivery of such share certificates, previously deposited with the exchange agent. If you instructed a bank, brokerage firm or other nominee to submit an election for your shares, you must follow its directions for changing those instructions. In addition, any election of applicable merger consideration you make will automatically be revoked if the Transaction Agreement is terminated.

Paramount stockholders will not be entitled to change or revoke their election following the Election Deadline. As a result, if you make an election, you will be unable to change or revoke your election during the period between the Election Deadline and the Closing Date.

 

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Q:	May I transfer my shares of Paramount common stock once I have made an election?

 

A:

Yes, however, for Paramount stockholders who have made an election, any further transfer of shares made on the stock transfer books of Paramount will be deemed to be a revocation of their election. Therefore, any shares of Paramount common stock for which an election to receive applicable merger consideration was properly made prior to the Election Deadline, but which are then transferred prior to the Closing, will receive solely the applicable stock consideration unless the transferee or acquiree of such shares subsequently makes a proper election to receive the applicable cash consideration prior to the Election Deadline.

 

Q:	What happens if I sell my shares before the completion of the Transactions?

 

A:

If you transfer, sell or otherwise dispose of your shares of Paramount common stock before the completion of the Transactions, you will have transferred the right to receive the applicable merger consideration to the transferee or acquiree of such shares. In order to receive the applicable merger consideration, you must hold your shares of Paramount common stock through the Effective Time.

 

Q:	As a holder of Paramount Class A common stock, am I guaranteed to receive the form of merger consideration I elect to receive for my shares of Paramount common stock?

 

A:

Elections made with respect to shares of Paramount Class A common stock will not be subject to proration. Accordingly, upon the completion of the Transactions, each holder of Paramount Class A common stock will receive the Class A Cash Consideration and/or the Class A Stock Consideration that such holder elected to receive.

 

Q:	As a holder of Paramount Class B common stock, am I guaranteed to receive the form of merger consideration I elect to receive for my shares of Paramount common stock?

 

A:

Elections made to receive the Class B Stock Consideration will not be subject to proration. Elections made to receive the Class B Cash Consideration will be subject to the proration mechanism. The elections to receive Class B Cash Consideration will be prorated as necessary to ensure that the total number of shares of New Paramount Class B common stock to be converted into the right to receive the Class B Cash Consideration will be limited to the amount equal to the Class B Cash Cap divided by the Class B Cash Consideration (i.e., 285,889,212 shares of New Paramount Class B common stock) (the “Maximum Class B Cash Share Number”). If the Maximum Class B Cash Share Number is met, all other shares of New Paramount Class B common stock (other than New Paramount Merger Cancelled Shares) will remain issued and outstanding as shares of New Paramount Class B common stock, and an amount of cash equal to the Class B Cash Cap will be allocated pro rata across all shares of New Paramount Class B common stock electing to receive the Class B Cash Consideration.

The following examples illustrate the proration mechanism in the case of an oversubscription of the Class B Cash Consideration. Note that for illustrative purposes the following examples (a) assume that the number of shares of New Paramount Class B common stock issued and outstanding immediately prior to the New Paramount Merger Effective Time with respect to which an election as to the form of merger consideration may be made (the “Class B Eligible Shares”) will equal 593,382,117 (assuming for illustrative purposes that 626,011,612 shares of New Paramount Class B common stock will be issued and outstanding immediately prior to the New Paramount Merger Effective Time, with 32,629,495 of such shares being held by Specified Stockholders and zero of such shares being held by a PIPE Equity Investor) and (b) do not give effect to adjustments relating to rounding and fractional shares as described in the section entitled “Summary of the Transaction Agreement—Merger Consideration; Conversion of Shares; Exchange of Certificates” beginning on page 170 of this information statement/prospectus.

 

•

If you own 100 shares of New Paramount Class B common stock and elect to receive the Class B Cash Consideration for all of your shares, and 100% of the Class B Eligible Shares elect to receive the

 

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Class B Cash Consideration, you will receive the Class B Cash Consideration in exchange for 48.1796 of your shares of New Paramount Class B common stock, and 51.8204 of your shares of New Paramount Class B common stock will remain issued and outstanding as shares of New Paramount Class B common stock.

 

•

If you own 100 shares of New Paramount Class B common stock and elect to receive the Class B Cash Consideration for all of your shares, and 75% of the Class B Eligible Shares elect to receive the Class B Cash Consideration, you will receive the Class B Cash Consideration in exchange for 64.2395 of your shares of New Paramount Class B common stock, and 35.7605 of your shares of New Paramount Class B common stock will remain issued and outstanding as shares of New Paramount Class B common stock.

 

•

If you own 100 shares of New Paramount Class B common stock and elect to receive the Class B Cash Consideration for all of your shares, and less than 48.1796% of the Class B Eligible Shares elect to receive the Class B Cash Consideration, you will receive the Class B Cash Consideration in exchange for all of your shares of New Paramount Class B common stock.

The proration of the elections to receive Class B Cash Consideration will not be known until immediately prior to or following the Effective Time.

For further information, see the sections entitled “Summary of the Transaction Agreement—Merger Consideration; Conversion of Shares; Exchange of Certificates—Proration” and “Risk Factors—Risks Relating to the Transactions—Holders of Paramount Class B common stock may not receive all merger consideration in the form they elect, and the form of merger consideration that they receive may have a lower value or different tax consequences than the form of merger consideration that they elect to receive” beginning on pages 176 and 46, respectively, of this information statement/prospectus.

 

Q:	Will fractional shares of New Paramount Class B common stock be issued in connection with the Transactions?

 

A:

No. No fractional shares of New Paramount Class B common stock will be issued in connection with the Transactions. Following the Transactions, Paramount stockholders will receive cash in lieu of any fractional share of New Paramount Class B common stock. See the section entitled “The Transactions—Merger Consideration” beginning on page 91 of this information statement/prospectus.

 

Q:	What will holders of Paramount equity awards receive in the Transactions?

 

A:

At the Pre-Closing Paramount Merger Effective Time, each Paramount equity award that is outstanding immediately prior to the Pre-Closing Paramount Merger Effective Time will be assumed by New Paramount and converted into an equivalent award with respect to New Paramount Class B common stock, generally subject to the same terms (including vesting requirements and any applicable terms relating to accelerated vesting upon qualifying terminations of employment) applicable to the corresponding Paramount equity award prior to the Pre-Closing Paramount Merger Effective Time, except that the number of shares of New Paramount Class B common stock subject to each assumed and converted Paramount PSU Award will be determined based on target performance if the applicable performance period has not been completed prior to the Pre-Closing Paramount Merger Effective Time and such assumed and converted Paramount PSU Awards will no longer be subject to performance-based vesting conditions (but will remain subject to time-based vesting conditions). See the section entitled “The Transactions—Treatment of Equity Awards” beginning on page 92 of this information statement/prospectus.

 

Q:	What will holders of Skydance equity and phantom equity awards receive in the Transactions?

 

A:	At the Skydance Merger Effective Time, each Skydance Profits Interest Unit that is outstanding immediately prior to the Skydance Merger Effective Time will be converted automatically into the right to

 

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receive the applicable portion of the Skydance Merger Consideration as determined in accordance with the Transaction Agreement and the Skydance LLC Agreement. In addition, at the Skydance Merger Effective Time, each award of Skydance Phantom Units and each award of Skydance Sports Phantom Units (if any), in each case, that is outstanding immediately prior to the Skydance Merger Effective Time will be cancelled and terminated and converted into the right to receive the applicable portion of the Skydance Merger Consideration as determined in accordance with the Transaction Agreement, less applicable withholding taxes. See the section entitled “The Transactions—Treatment of Equity Awards” beginning on page 92 of this information statement/prospectus.

 

Q:	Should I do anything at this time with my shares of Paramount common stock held in book-entry form to receive the applicable merger consideration?

 

A:

No. If you are a registered holder of Paramount common stock on the records of Paramount’s transfer agent, or if you are a beneficial holder of Paramount common stock—that is, in street name through a bank, brokerage firm or other nominee—you will not be required to take any action. As promptly as reasonably practicable after the New Paramount Merger Effective Time (but in no event later than three business days thereafter), New Paramount will cause the exchange agent to mail to each holder of record of book-entry shares of New Paramount common stock not held through DTC appropriate transmittal materials and instructions for effecting the surrender of such book-entry shares in exchange for the applicable merger consideration. Similarly, if you are a beneficial holder of Paramount common stock, your bank, brokerage firm or other nominee will effect the exchange of the shares of Paramount common stock you own beneficially for the applicable merger consideration. In either case, there is nothing for you to do. For further information, see the section entitled “Summary of the Transaction Agreement—Merger Consideration; Conversion of Shares; Exchange of Certificates” beginning on page 170 of this information statement/prospectus.

 

Q:	If I hold physical share certificates representing my shares of Paramount common stock, should I send in my share certificates now to receive the applicable merger consideration?

 

A:

No. If you hold physical share certificates of Paramount common stock, you will be sent a letter of transmittal promptly after the Effective Time describing how you may exchange your certificated shares of Paramount common stock for the applicable merger consideration, and the exchange agent will forward to you the applicable merger consideration to which you are entitled after receiving the proper documentation from you. For further information, see the section entitled “Summary of the Transaction Agreement—Merger Consideration; Conversion of Shares; Exchange of Certificates” beginning on page 170 of this information statement/prospectus. Alternatively, you may send your certificated shares at the moment you make your election to receive applicable merger consideration. See the question above entitled “How do I elect the type of merger consideration that I prefer to receive?” for additional information.

 

Q:	Who will serve on New Paramount’s board of directors and as management?

 

A:

Under the terms of the Transaction Agreement, upon the completion of the Transactions, the New Paramount Board will consist of up to 13 members who will be designated by Skydance prior to the Closing, (i) five of whom are expected to be nominees of Ellison (as defined in the A&R Charter) (one of whom will be David Ellison), (ii) two of whom are expected to be nominees of RedBird (as defined in the A&R Charter), (iii) one of whom is expected to be the President of New Paramount following the Closing and (iv) up to three of whom will be independent. Under the terms of the Transaction Agreement, each of Shari E. Redstone and/or Tyler Korff will have the right to be designated to the New Paramount Board at the Closing, if requested prior to the Closing. The Transaction Agreement further provides that David Ellison will be elected as the Chair of the New Paramount Board (the “Chair”) and an individual nominated by Skydance will be elected as the Vice Chair of the New Paramount Board.

 

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Following the Closing, New Paramount is expected to be led by David Ellison as Chair and Chief Executive Officer and Jeffrey Shell as President. For further information, see the section entitled “Management and Directors of New Paramount After Completion of the Transactions” beginning on page 258 of this information statement/prospectus.

 

Q:	What equity stake will Paramount stockholders hold in New Paramount?

 

A:

Immediately following the completion of the Transactions, it is anticipated that (a) former holders of Paramount common stock (other than the Specified NAI Stockholders) will hold approximately 29% to 53% of the outstanding shares of New Paramount Class B common stock and the PIPE Equity Investors will receive approximately 17% to 38% of the outstanding shares of New Paramount Class B common stock as a result of the PIPE Transaction, in each case, depending on the amount of cash consideration that Paramount stockholders elect to receive and (b) the Specified NAI Stockholders will hold 100% of the voting power of New Paramount and approximately 3% of the outstanding shares of New Paramount Class B common stock and the Ellison family will control the voting power of New Paramount indirectly through the Pinnacle entities’ collective 77.5% ownership interest in NAI. As a result, New Paramount will be a “controlled company” under the corporate governance rules of Nasdaq applicable to listed companies, and, therefore, New Paramount will be permitted to, and intends to, elect not to comply with certain corporate governance requirements thereunder. See the section entitled “Risk Factors—Risks Relating to New Paramount After Completion of the Transactions—Risks Relating to New Paramount’s Organization and Structure—New Paramount will be exempt from certain corporate governance requirements since it will be a ‘controlled company’ within the meaning of Nasdaq rules, and as a result its stockholders will not have the protections afforded by these corporate governance requirements” beginning on page 76 of this information statement/prospectus.

 

Q:	Will I still be paid dividends prior to the completion of the Transactions?

 

A:

Prior to the completion of the Transactions, Paramount may establish a record date for, declare and pay (a) quarterly cash dividends consistent with past practice, each in an amount no greater than $0.05 per share of Paramount common stock and (b) mandatory dividends or distributions required pursuant to its organizational documents as in effect on July 7, 2024, if any. For more information regarding the payment of dividends, see the section entitled “Summary of the Transaction Agreement—Covenants and Agreements—Conduct of Business by Paramount” beginning on page 180 of this information statement/prospectus.

 

Q:	What conditions must be satisfied to complete the Transactions?

 

A:	Paramount and Skydance are not required to complete the Transactions unless a number of conditions are satisfied or waived. These conditions to the Closing include, among others:

 

(a)

the adoption of the Transaction Agreement and the Transactions by Paramount stockholders (which was satisfied by the delivery of the Written Consent);

 

(b)

the absence of certain legal restraints that would prohibit the consummation of the Mergers or that would impose a material adverse effect on New Paramount and its subsidiaries, taken as a whole after giving effect to the Mergers;

 

(c)

the receipt of certain regulatory approvals;

 

(d)

the effectiveness of the registration statement on Form S-4, of which this information statement/prospectus forms a part;

 

(e)

the approval for listing on Nasdaq of the shares of New Paramount Class B common stock to be issued in connection with the Transactions;

 

(f)

the receipt of an opinion from Simpson Thacher & Bartlett LLP or other tax counsel reasonably acceptable to Paramount to the effect that the Mergers, the PIPE Transaction and the Blocker

 

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Contribution and Exchange, taken altogether, should qualify as an exchange described in Section 351 of the Code;

 

(g)

the consummation of each of the NAI Transaction and the PIPE Transaction immediately prior to or substantially concurrent with the Closing; and

 

(h)

the absence, since the date of the Transaction Agreement, of any effect, event, change, occurrence, development, condition or circumstance that has had or would reasonably be expected to have a material adverse effect on the business, financial condition or results of operations of Paramount or Skydance.

In addition, each of Paramount and Skydance’s respective obligations to complete the Transactions is subject to, among other conditions, the accuracy of the other party’s representations and warranties described in the Transaction Agreement (subject in most cases to “materiality” and “material adverse effect” qualifications) and the other party’s performance in all material respects of its obligations in the Transaction Agreement. The completion of the Transactions is not subject to any financing condition.

For a more complete summary of the conditions to the Closing that must be satisfied or waived prior to the Closing, see the section entitled “Summary of the Transaction Agreement—Conditions to the Closing” beginning on page 201 of this information statement/prospectus.

 

Q:	When do you expect the Transactions to be completed?

 

A:

Paramount and Skydance are working to complete the Transactions as soon as possible. As described above, certain conditions to the Closing must be satisfied or waived before the Transactions can be completed. For further information, see the section entitled “Summary of the Transaction Agreement—Conditions to the Closing” beginning on page 201 of this information statement/prospectus.

Assuming timely satisfaction or waiver of the conditions to the Closing, the Transactions are expected to close in the first half of 2025. The Closing Date will be at least 20 calendar days after the mailing of this information statement/prospectus to Paramount stockholders, in accordance with Rule 14c-2(b) promulgated under the Exchange Act.

 

Q:	Can the Transaction Agreement be terminated?

 

A:

The Transaction Agreement contains termination rights for Paramount and Skydance, including, among others, by either Paramount (acting with the prior approval of the Special Committee) or Skydance (i) if any of the Subscription Agreements or the NAI Stock Purchase Agreement is terminated in accordance with its respective terms; (ii) if the consummation of the Transactions does not occur before April 7, 2025, subject to two automatic extensions of 90 days each if on such date all of the conditions to the Closing, except those relating to regulatory approvals, have been satisfied or waived; (iii) if a governmental authority having jurisdiction over Skydance or Paramount has issued any law permanently restraining, enjoining or otherwise prohibiting the Mergers and such law becomes final and non-appealable; or (iv) if the other party breaches its representations, warranties or covenants in the Transaction Agreement in a manner that would result in a failure of an applicable condition to the Closing, subject in certain cases to the right of the breaching party to cure the breach.

In certain circumstances, Paramount may be required to pay to Skydance the Termination Fee (as defined herein). For further information, see the section entitled “Summary of the Transaction Agreement—Effect of Termination; Termination Fee; Expenses” beginning on page 205 of this information statement/prospectus.

 

Q:	What happens if a third party makes an offer to acquire Paramount before the Transactions are completed?

 

A:	The Special Committee’s and Paramount’s rights to provide non-public information and engage in negotiations or discussions with third parties under certain circumstances with respect to an Acquisition

 

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Proposal (as defined herein) or any proposal, inquiry or offer that could be reasonably expected to lead to an Acquisition Proposal have expired. For further information, see the section entitled “Summary of the Transaction Agreement—Go-Shop; No Solicitation; Change in Board Recommendation” beginning on page 188 of this information statement/prospectus.

 

Q:	What happens if the Transactions are not completed?

 

A:

If the Transactions are not completed for any reason, (a) Paramount stockholders will retain their shares of Paramount common stock and not receive any merger consideration, (b) Paramount will remain an independent public company, (c) Paramount Class A common stock and Paramount Class B common stock will each continue to be traded on Nasdaq and (d) New Paramount, which is currently a direct, wholly-owned subsidiary of Paramount, will not become a publicly traded corporation.

If the Transaction Agreement is terminated due to the Skydance Merger Effective Time not having occurred on or before the End Date (as defined herein) or due to a material breach of the Transaction Agreement by Paramount, Paramount would in certain circumstances have the obligation to pay to Skydance the Termination Fee. For further information, see the section entitled “Summary of the Transaction Agreement—Effect of Termination; Termination Fee; Expenses” beginning on page 205 of this information statement/prospectus.

 

Q:	Why am I not being asked to vote on the Transactions? What approval by Paramount stockholders is required to adopt the Transaction Agreement and, therefore, approve the Transactions?

 

A:

The adoption of the Transaction Agreement and, therefore, the approval of the Transactions, required the affirmative approval of a majority of the outstanding Paramount Class A common stock. On July 7, 2024, the Specified NAI Entities beneficially owned approximately 77.4% of the aggregate voting power of the outstanding Paramount Class A common stock as of July 7, 2024, the record date for determining the stockholders entitled to vote in favor of adopting the Transaction Agreement and approving the Transactions. On the same date, the Specified NAI Entities delivered to Paramount the Written Consent adopting and approving the Transaction Agreement and, to the extent the consent of Paramount’s stockholders was required therefor, the Transactions. Accordingly, the delivery of the Written Consent was sufficient to adopt the Transaction Agreement and approve the Transactions on behalf of Paramount stockholders, and no further action by any Paramount stockholder is required to approve the Transactions under applicable law. Therefore, Paramount will not solicit the votes of its stockholders for the adoption or approval of the Transaction Agreement or the Transactions, by special meeting or otherwise, and you are requested not to send a proxy.

This information statement/prospectus and notice of action by written consent is being provided to you for informational purposes only and shall be considered the notice required under Section 228(e) of the DGCL.

 

Q:	What are the expected United States federal income tax consequences of the Transactions for holders of Paramount common stock?

 

A:

As described in more detail in the section entitled “Material United States Federal Income Tax Consequences” beginning on page 279 of this information statement/prospectus, the Transactions, taken together, are intended to qualify as a tax-deferred exchange for U.S. federal income tax purposes under Section 351 of the Code, other than with respect to cash received by holders of Paramount common stock in connection with the Transactions.

You are strongly urged to consult your tax advisor to determine the particular U.S. federal, state, local or foreign income or other tax consequences of the Transactions (including the Pre-Closing Paramount Merger and the New Paramount Merger) to you.

 

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Q:	Are Paramount stockholders entitled to dissenters’ or appraisal rights in connection with the Transactions?

 

A:

No. Under Delaware law, Paramount stockholders will not have dissenters’ rights or appraisal rights in connection with the Transactions. For more information, see the sections entitled “No Dissenters’ or Appraisal Rights” and “Risk Factors—Risks Relating to the Transactions—Paramount stockholders will not be entitled to appraisal rights in connection with the Transactions” beginning on pages 312 and 56, respectively, of this information statement/prospectus.

 

Q:	Are there any important risks about the Transactions, Paramount’s business or Skydance’s business of which I should be aware?

 

A:	Yes, there are risks involved. You are encouraged to carefully read in its entirety the section entitled “Risk Factors” beginning on page 45 of this information statement/prospectus.

 

Q:	Where can I find more information about Paramount?

 

A:

Paramount files annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC, including Paramount, which can be accessed at https://www.sec.gov. In addition, you may also access Paramount’s filings and other information about Paramount through the “Investors” page of Paramount’s website, at https://ir.paramount.com. Information contained on Paramount’s website or connected thereto is provided for textual reference only and does not constitute part of, and is not incorporated by reference into, this information statement/prospectus, the registration statement of which it forms a part or any future documents that may be filed with the SEC. For a more detailed description of the available information, see the section entitled “Where You Can Find More Information” beginning on page 316 of this information statement/prospectus.

 

Q:	Who do I contact if I have further questions about the Transactions or the Transaction Agreement?

 

A:	Paramount stockholders who have questions about the Transactions or the Transaction Agreement or who desire additional copies of this information statement/prospectus or other additional materials should contact:

Paramount Global

Attention: Investor Relations

1515 Broadway

New York, NY 10036

(212) 846-5237

If a bank, brokerage firm or other nominee holds your shares, you should also contact your bank, brokerage firm or other nominee for additional information.

 

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RISK FACTORS

This section describes various risks and uncertainties related to the Transactions and the businesses and results of operations of Paramount, New Paramount and Skydance. In addition to the other information included in, or incorporated by reference into, this information statement/prospectus, the annexes and exhibits attached to this information statement/prospectus, and the documents that are referred to in, or incorporated by reference into, this information statement/prospectus, including the matters addressed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 84 of this information statement/prospectus, you should carefully consider the following risks relating to the Transactions. You should also read and consider the risk factors associated with the businesses of each of Paramount and Skydance because these risk factors may affect the operations and financial results of New Paramount. In the case of Paramount, these risk factors may be found in its Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 28, 2024, and its subsequently filed Quarterly Reports on Form 10-Q, each of which is incorporated by reference into this information statement/prospectus. For further information, see the section entitled “Where You Can Find More Information” beginning on page 316 of this information statement/prospectus. In the case of Skydance, these risk factors may be found below under the section entitled “—Risks Relating to Skydance’s Business” beginning on page 56 of this information statement/prospectus. Additional risks and uncertainties not presently known to Paramount or Skydance or that are not currently considered to be material may also adversely affect the Transactions or the businesses or results of operations of any of Paramount, Skydance or New Paramount.

Risks Relating to the Transactions

The stock consideration exchange ratios are fixed and will not be adjusted for stock price changes. Because the market prices of Paramount Class A common stock and Paramount Class B common stock have fluctuated and will continue to fluctuate, Paramount stockholders cannot be sure of the value of the stock consideration they will receive, and such value may be lower than the value of Paramount common stock on an earlier date.

Upon completion of the New Paramount Merger, (a) each issued and outstanding share of New Paramount Class A common stock (other than (i) any New Paramount Merger Cancelled Shares and (ii) shares of New Paramount Class A common stock held by a Specified NAI Stockholder) will be converted automatically into the right to receive, at the election of the holder of such share, the Class A Cash Consideration (i.e., an amount of cash, without interest, equal to $23.00). or the Class A Stock Consideration (i.e., 1.5333 shares of New Paramount Class B common stock), and (b) each issued and outstanding share of New Paramount Class B common stock (other than (i) any New Paramount Merger Cancelled Shares and (ii) shares of New Paramount Class B common stock held by a Specified Stockholder or a PIPE Equity Investor) will be converted automatically into the right to receive, at the election of the holder of such share and subject to the proration mechanism described herein, the Class B Cash Consideration (i.e., an amount of cash, without interest, equal to $15.00) or the Class B Stock Consideration (i.e., one share of New Paramount Class B common stock).

The exchange ratios set forth above were negotiated based on prices prevailing at the time of entering into the Transaction Agreement; however, the market price of the Paramount Class A common stock and Paramount Class B common stock at the time of completion of the Transactions may vary significantly from the market price of the Paramount Class A common stock and Paramount Class B common stock on the date the Transaction Agreement was executed, the date of this information statement/prospectus and the date on which Paramount stockholders make their election. Because the Class A Stock Consideration and the Class B Stock Consideration are payable in a fixed number of shares of New Paramount Class B common stock, the value of the Class A Stock Consideration and Class B Stock Consideration that Paramount stockholders will receive upon completion of the Transactions may be higher or lower than the value of Paramount Class A common stock and Paramount Class B common stock, respectively, on such earlier dates and the value of any such stock consideration received may be lower than the corresponding cash election amount. In addition, as discussed below, the cash consideration received by holders of Paramount Class B common stock will be subject to proration. Accordingly,

 

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Paramount stockholders will not know or be able to calculate at the time they make their elections the market value of the Class A Stock Consideration or the Class B Stock Consideration they will receive upon completion of the Transactions.

In addition, because no trading market currently exists for the shares of New Paramount Class B common stock to be issued in connection with the Transactions, the market value of New Paramount Class B common stock is unknown. The market value of the New Paramount Class B common stock will in part depend on the market value of Paramount Class B common stock immediately before the completion of the Transactions. While there is a trading market for the Paramount common stock, the market price of Paramount common stock has fluctuated since the date of the announcement of the Transaction Agreement and will continue to fluctuate from the date of this information statement/prospectus until the date that the Transactions are completed, which could occur a considerable amount of time after the date of this information statement/prospectus and the date on which Paramount stockholders make their election. The market value of Paramount Class B common stock at the time of the consummation of the Transactions may vary significantly from its price on the date of the Transaction Agreement or the date of this information statement/prospectus and the date on which Paramount stockholders make their election and may not be reflective of the market value of the New Paramount Class B common stock. Because the consideration described herein will not be adjusted to reflect any changes in the values of Paramount common stock, the value of the merger consideration may be higher or lower than the value of Paramount common stock on earlier dates. Therefore, until the consummation of the Transactions, the holders of Paramount common stock will not know or be able to determine the value, on a fully diluted basis, of the New Paramount Class B common stock that they will receive pursuant to the Transaction Agreement. Paramount stockholders are urged to obtain then-current market quotations for Paramount common stock when they make their elections.

Stock price changes may result from a variety of factors, including general business, market, industry and economic conditions, changes in Paramount’s and Skydance’s respective businesses, results of operations and prospects, market assessments of the likelihood that the Transactions will be completed, the timing of the Transactions, regulatory considerations and other risk factors set forth or incorporated by reference in this information statement/prospectus. Many of these factors are beyond Paramount’s and Skydance’s control.

Holders of Paramount Class B common stock may not receive all merger consideration in the form they elect, and the form of merger consideration that they receive may have a lower value or different tax consequences than the form of merger consideration that they elect to receive.

Under the Transaction Agreement, the maximum amount of cash consideration that holders of Paramount Class B common stock will be entitled to receive pursuant to the New Paramount Merger is approximately $4.3 billion in the aggregate, and a maximum number of shares of Paramount Class B common stock equal to the Maximum Class B Cash Share Number will be entitled to receive the Class B Cash Consideration. The cash consideration payable to holders of Paramount Class B common stock in the New Paramount Merger will be subject to proration in the event that the number of cash elections made by such stockholders in the aggregate exceeds this limit. Accordingly, some of the merger consideration a holder of Paramount Class B common stock receives may differ from the type of merger consideration selected by such holder and such difference may be significant. This may result in, among other things, tax consequences that differ from those that would have resulted if such holder of Paramount Class B common stock had received solely the form of merger consideration elected.

If a Paramount stockholder makes a stock election in respect of their Paramount Class A common stock or Paramount Class B common stock and the market value of Paramount Class B common stock falls between the time of the election and the time the merger consideration is actually received, the value of such stock consideration received may be less than the value of the cash consideration that such stockholder would have received under a cash election. Conversely, if a Paramount stockholder makes a cash election and the market value of Paramount Class B common stock rises between the time of the election and the time the cash consideration is actually received, the value of such cash consideration received may be less than the value of the stock consideration that such stockholder would have received under a stock election.

 

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A discussion of the proration mechanism can be found under the section entitled “Summary of the Transaction Agreement—Merger Consideration; Conversion of Shares; Exchange of Certificates—Proration” beginning on page 176 of this information statement/prospectus and a discussion of the material U.S. federal income tax consequences of the Transactions can be found under the section entitled “Material United States Federal Income Tax Consequences” beginning on page 279 of this information statement/prospectus.

Existing Paramount stockholders will have a reduced ownership and economic interest in New Paramount after the Transactions.

After the completion of the Transactions, Paramount stockholders will own a smaller percentage of New Paramount than they currently own of Paramount. Following Closing, it is anticipated that the PIPE Equity Investors will receive approximately 17% to 38% of the outstanding shares of New Paramount Class B common stock as a result of the PIPE Transaction, the Specified NAI Stockholders will hold 100% of the outstanding shares of New Paramount Class A common stock and approximately 3% of the outstanding shares of New Paramount Class B common stock, the members of Skydance will receive approximately 27% to 30% of the outstanding shares of New Paramount Class B common stock as a result of the Skydance Merger and other Paramount stockholders will hold approximately 29% to 53% of the outstanding shares of New Paramount Class B common stock, in each case, depending on the cash and stock elections described elsewhere herein. Consequently, Paramount stockholders will have a reduced ownership and economic interest in New Paramount as a combined company compared to their ownership of Paramount prior to the combination. Similarly, a change in the concentration of the ownership of New Paramount Class B common stock as a result of the Transactions could result in a reduction to the public float and trading volume in the New Paramount Class B common stock, which could adversely affect the trading price of shares of New Paramount Class B common stock. See the risk factor entitled “—Risks Relating to New Paramount After Completion of the Transactions—Risks Relating to New Paramount’s Organization and Structure—New Paramount will be exempt from certain corporate governance requirements since it will be a ‘controlled company’ within the meaning of Nasdaq rules, and as a result its stockholders will not have the protections afforded by these corporate governance requirements” beginning on page 76 of this information statement/prospectus.

In addition, following the Closing, the A&R Charter will provide holders of shares of New Paramount Class A common stock with the option to convert each such share into 1.5 shares of New Paramount Class B common stock. Any exercise of this conversion right following the Closing will result in further dilution to the holders of New Paramount Class B common stock at the time of conversion.

The PIPE Transaction is subject to certain cutbacks in the event that stock elections exceed specified thresholds.

Following the consummation of the Transactions, a minimum of $1.5 billion of cash proceeds from the PIPE Transaction (prior to giving effect to the subscription discount) will remain at New Paramount after the payment of cash consideration to holders of Paramount common stock that make cash elections (the “primary gross proceeds”) as described herein; however, the primary gross proceeds may be greater than $1.5 billion to the extent holders of Paramount Class A common stock elect stock consideration or holders of Paramount Class B common stock make cash elections that do not, in the aggregate, exceed the Maximum Class B Cash Share Number. The Subscription Agreements provide that the maximum additional primary gross proceeds in such situation will not be greater than $1.5 billion (or $3.0 billion in the aggregate), in each case prior to giving effect to the subscription discount, and thereafter the obligations of the subscribers to subscribe for New Paramount Class B common stock in the PIPE Transaction will be reduced on a pro rata basis, as further described in the section entitled “Summary of Certain Agreements Related to the Transactions” beginning on page 208 of this information statement/prospectus. As a result, the aggregate amount of gross proceeds from the PIPE Transaction may decrease as a result of such cutback mechanisms.

 

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Paramount and Skydance must obtain certain regulatory approvals in order to complete the Transactions; if such approvals are not obtained or are obtained with conditions, the Transactions may be prevented or delayed or the anticipated benefits of the Transactions could be reduced.

The Closing is conditioned upon, among other things, the expiration or termination of the waiting period (and any extensions thereof) applicable to the Transactions under the HSR Act. Lawrence Ellison, the Sumner M. Redstone National Amusements Part B General Trust (also known as NA Part B General Trust), and Skydance filed HSR Act Notification and Report Forms on July 19, 2024 with respect to the Transactions that will bring entities controlled by the Ellison family into collective control of NAI and Paramount while merging Skydance into Paramount. The waiting period under the HSR Act expired on August 19, 2024.

Completion of the Transactions and of the NAI Transaction is also conditioned upon:

 

(1)

Clearance or approval by antitrust authorities in Australia, Austria, Brazil, Canada, the European Union, Germany, Saudi Arabia, South Africa, South Korea and Turkey;

 

(2)

Clearance or approval by foreign investment authorities in Australia, Canada, Czech Republic, Germany, Italy, Romania, Spain and the United Kingdom;

 

(3)

The closure of a preliminary review or adoption of a no objection decision by the European Commission under the Foreign Subsidies Regulation (Regulation EU 2022/2560); and

 

(4)

Clearance or approval by the Federal Communications Commission (“FCC”) and regulatory authorities with jurisdiction over media and communications operations in Chile, and required filings with regulatory and governmental authorities with jurisdiction over media and communications operations in the United Kingdom. Applications seeking approval by the FCC under the Communications Act of 1934, as amended (“Communications Act”) for the transfer of control of Paramount’s television broadcast licenses that will occur as a result of the Transactions and the NAI Transaction have been submitted to the FCC, which has commenced its regulatory review process. Applications seeking approval under the Communications Act for transfer of control of the other FCC licenses and authorizations that will occur as a result of the Transactions and the NAI Transaction were submitted to the FCC shortly thereafter.

At any time before or after the Transactions are completed, any of the United States Department of Justice, the Federal Trade Commission, U.S. state attorneys general, the FCC, the other regulatory authorities noted above or private parties could take action under applicable antitrust laws, foreign investment laws or media and communications laws in opposition to the Transactions by, among other things, (i) seeking to enjoin completion of the Transactions; (ii) seeking to condition completion of the Transactions upon the divestiture of assets of Paramount, Skydance or their respective subsidiaries; or (iii) seeking to impose restrictions on New Paramount’s post-transaction operations.

Any such requirements or restrictions sought by regulatory authorities could prevent or delay completion of the Transactions or negatively affect the results of operations and financial condition of New Paramount following completion of the Transactions or reduce the anticipated benefits of the Transactions, any of which could have an adverse effect on New Paramount’s business and cash flows, financial condition and results of operations.

No assurance can be given that the required regulatory approvals will be obtained or that the required conditions to the Closing will be satisfied or waived, and, even if all such approvals are obtained and all such conditions are satisfied or waived, no assurance can be given as to the terms, conditions and timing of such approvals. For more information about the effects of a failure to complete the Transactions, see the risk factor entitled “—Failure to complete the Transactions could negatively impact the businesses or financial results of Paramount and the stock price of Paramount common stock” beginning on page 53 of this information statement/prospectus. See the section entitled “Summary of the Transaction Agreement—Conditions to the

 

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Closing” beginning on page 201 of this information statement/prospectus for a discussion of the conditions to the completion of the Transactions and the section entitled “Summary of the Transaction Agreement—Governmental and Regulatory Approvals” beginning on page 193 of this information statement/prospectus for a discussion of the regulatory approvals required to be obtained in connection with the completion of the Transactions.

The Transactions are subject to a number of conditions to the Closing and, if these conditions are not satisfied, the Transaction Agreement may be terminated in accordance with its terms and the Transactions may not be completed. In addition, the parties have the right to terminate the Transaction Agreement under certain circumstances, in which case the Transactions would not be completed.

The Transactions are subject to a number of conditions and, if such conditions are not satisfied or waived (to the extent permitted by law), the Transactions will not be completed. These conditions include, among others: (i) the effectiveness of New Paramount’s registration statement on Form S-4, of which this information statement/prospectus forms a part, and the absence of any stop order or other proceeding that suspends or otherwise threatens such effectiveness; (ii) the expiration of the waiting period under the HSR Act (which condition was satisfied on August 19, 2024); (iii) the clearance and obtainment of approvals under certain specified antitrust laws, foreign direct investment laws and communications laws (which are still in the process of being obtained as of the date of this information statement/prospectus); (iv) the absence of any order or legal requirement that enjoins, restrains or otherwise prohibits the consummation of the Transactions or that would impose a material adverse effect on New Paramount and its subsidiaries, taken as a whole after giving effect to the Mergers; (v) the authorization for listing on Nasdaq of New Paramount Class B common stock; (vi) the lapse of at least 20 calendar days from the date of completion of the mailing of this information statement/prospectus to Paramount stockholders; (vii) the consummation of each of the NAI Transaction and the PIPE Transaction immediately prior to or substantially concurrent with the Closing; (viii) the delivery by each of Skydance and Paramount to the other party of duly executed counterparts to each of the ancillary agreements required to be delivered at the Closing to which it is a party; (ix) customary conditions regarding the accuracy of the parties’ representations and warranties and material compliance by the parties with their respective obligations under the Transaction Agreement and (x) the receipt by Paramount of an opinion from its tax counsel that the Transactions, taken together, should qualify as an exchange described in Section 351 of the Code. The consummation of the Transactions is not subject to a financing condition.

These conditions to the Closing may not be fulfilled and, accordingly, the Transactions may not be completed on a timely basis, or at all. Additionally, the regulatory approvals may be significantly delayed by the 2024 presidential election cycle in the United States, military conflict, including conflicts in Eastern Europe and the Middle East, such as Russia’s invasion of Ukraine, terrorism or other geopolitical events. In addition, if the Transactions are not completed by April 7, 2025 (subject to two automatic extensions of 90 days each in certain circumstances), Paramount or Skydance may elect to terminate the Transaction Agreement. Moreover, Paramount and Skydance can mutually decide to terminate the Transaction Agreement at any time prior to the Closing. In addition, each of Paramount and Skydance may elect to terminate the Transaction Agreement in certain other circumstances, as described in the section entitled “Summary of the Transaction Agreement—Termination” beginning on page 204 of this information statement/prospectus. If the Transaction Agreement is terminated in certain circumstances, Paramount would be required to pay Skydance the Termination Fee and may incur substantial additional fees, and Paramount would not realize the anticipated benefits of the Transactions. For further information, see the section entitled “Summary of the Transaction Agreement—Effect of Termination; Termination Fee; Expenses” beginning on page 205 of this information statement/prospectus. There is no requirement for Skydance to pay Paramount a break-up fee under any circumstance. For further information, see the section entitled “The Transactions—Regulatory Approvals” beginning on page 163 of this information statement/prospectus.

 

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Paramount and Skydance have incurred, and along with New Paramount will incur, significant transaction and merger-related transition costs in connection with the Transactions.

Paramount and Skydance each have incurred, and expect that they, along with New Paramount, will incur, significant costs in connection with the completion of the Transactions and the integration of the operations of Paramount and Skydance. See the risk factor entitled “Risk Factors—Risks Relating to New Paramount After Completion of the Transactions—Risks Relating to the New Paramount Business—Combining the businesses of Paramount and Skydance may be more difficult, time-consuming or costly than expected and the actual benefits of combining the businesses of Paramount and Skydance may be less than expected, either or both of which may adversely affect New Paramount’s future results” beginning on page 67 of this information statement/prospectus. Paramount, Skydance and/or New Paramount may incur additional costs to maintain employee morale and to retain key employees. Paramount and/or Skydance will also incur significant fees and expenses relating to regulatory filings, legal, accounting, financial advisory and consulting fees and other costs associated with the Transactions. Some of these costs are payable regardless of whether the Transactions are completed. In addition, Paramount may be required to pay to Skydance the Termination Fee in the event of a termination of the Transaction Agreement for certain specified reasons. Additionally, such costs could adversely affect the business, financial condition or results of operations of Paramount prior to the completion of the Transactions and limit or eliminate New Paramount’s ability to make any post-closing cash dividend. For further information, see the section entitled “Summary of the Transaction Agreement—Effect of Termination; Termination Fee; Expenses” beginning on page 205 of this information statement/prospectus.

Paramount and Skydance will be subject to business uncertainties and contractual restrictions under the Transaction Agreement while the Transactions are pending.

Uncertainty about the effect of the Transactions on employees, commercial partners, clients, customers, suppliers and vendors may have an adverse effect on the ongoing business operations of Paramount and/or Skydance and, consequently, have an adverse impact on the business operations of New Paramount. Parties with whom Paramount or Skydance have business relationships, including distributors, advertisers, talent and content providers, may be uncertain as to the future of such relationships with third parties or seek to alter their present business relationships with Paramount and Skydance. Parties with whom Paramount and Skydance otherwise may have sought to establish business relationships may seek alternative relationships with third parties. These uncertainties may impair, as applicable, Paramount’s or Skydance’s ability to retain and motivate key personnel and could cause customers and others that deal with Paramount or Skydance to defer or decline entering into contracts with Paramount or Skydance or make other decisions concerning Paramount or Skydance. Certain of Paramount’s media rights contracts, vendor or supplier contracts, leases and financing-related agreements contain change of control restrictions that may give rise to a right of termination or cancellation in connection with the Transactions. See the risk factors entitled “—The Transactions may trigger change in control or other provisions in certain agreements, which may allow third parties to terminate or alter existing contracts or relationships with Paramount or Skydance” and “—Risks Relating to New Paramount After Completion of the Transactions—Risks Relating to the New Paramount Business—New Paramount will have a significant amount of indebtedness and may need to incur more in the future, which could adversely affect its business” beginning on pages 55 and 70, respectively, of this information statement/prospectus. In addition, if key employees of Paramount or Skydance, as applicable, depart because of uncertainty about their future roles and the potential complexities of the Transactions, Paramount’s or Skydance’s business could be adversely affected. Furthermore, the Transaction Agreement contains restrictions on the ability of Paramount and Skydance to undertake certain actions or business opportunities outside the ordinary course of business prior to the completion of the Transactions without the consent of the other party, which may adversely affect each company’s ability to execute certain of its business strategies. As a result, Paramount and Skydance may be unable, during the pendency of the Transactions, without the consent of the other, to make certain acquisitions, capital expenditures and sales or divestitures of assets, to borrow money, to enter into certain new business arrangements or opportunities and to otherwise pursue these or other actions specified in the Transaction Agreement, even if such actions would prove beneficial to Skydance or Paramount on a standalone basis, or to New Paramount. In addition, Skydance shares control in certain joint ventures and other investments, which limits its ability to manage third-party risks

 

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associated with these arrangements. See the sections entitled “Summary of the Transaction Agreement—Covenants and Agreements—Conduct of Business by Paramount” and “Summary of the Transaction Agreement—Covenants and Agreements—Conduct of Business by Skydance” beginning on pages 180 and 185, respectively, of this information statement/prospectus for a description of the restrictive covenants applicable to Paramount and Skydance while the Transactions are pending.

Under the terms of the Transaction Agreement, the go-shop period has expired and Paramount is no longer permitted to pursue alternatives to the Transactions.

The Transaction Agreement contains provisions that restrict Paramount’s ability to enter into alternative transactions. Under the Transaction Agreement, starting on the no-shop period start date, Paramount became subject to “no-shop” provisions that prohibit Paramount from, among other things, soliciting, initiating or knowingly facilitating or knowingly encouraging any proposal or offer that constitutes, or could reasonably be expected to constitute or lead to, any acquisition proposal from a third party. If such a proposal were made, Paramount would not be able to engage in or participate in any discussions or negotiations with the party making the proposal and would have no ability to terminate the Transaction Agreement in favor of the proposal.

The restrictions imposed on Paramount under the “no-shop” provisions in the Transaction Agreement may discourage a potential acquiror that might have had an interest in acquiring all or a significant part of Paramount from considering or proposing that acquisition, even if it were prepared to pay consideration with a higher per share value than the currently proposed merger consideration.

If the Transaction Agreement is terminated and Paramount decides to seek another business combination, it may not be able to negotiate or consummate transactions with another party on terms comparable to, or better than, the terms of the Transaction Agreement. In addition, Paramount may be required to pay to Skydance the Termination Fee if such business combination is agreed to or consummated within twelve months after such termination of the Transaction Agreement, subject to certain conditions. For more information, see the sections entitled “Summary of the Transaction Agreement—Termination” and “Summary of the Transaction Agreement—Effect of Termination; Termination Fee; Expenses” beginning on pages 204 and 205, respectively, of this information statement/prospectus.

There may be tax consequences of the Transactions that may adversely affect holders of Paramount common stock, if the Transactions fail to qualify as a tax-deferred exchange pursuant to Section 351 of the Code for U.S. federal income tax purposes.

The exchange of Paramount common stock for New Paramount common stock pursuant to the Transactions generally is expected to qualify as a tax-deferred exchange pursuant to Section 351 of the Code for U.S. federal income tax purposes. If such an exchange fails to qualify as a transaction described in Section 351 of the Code, then a U.S. Holder (as that term is defined in the section entitled “Material United States Federal Income Tax Consequences” beginning on page 279 of this information statement/prospectus) would recognize gain in an amount equal to the excess (if any) of (i) the fair market value of the New Paramount common stock received over (ii) such U.S. Holder’s adjusted tax basis in its Paramount common stock. Any such gain would be capital gain and generally would be long-term capital gain if the U.S. Holder’s holding period for the Paramount common stock exceeded one year at the time of the Transactions.

A new 1% U.S. federal excise tax could be imposed on Paramount or New Paramount in connection with redemptions by Paramount or New Paramount of their respective shares.

The Inflation Reduction Act of 2022 imposes a 1% excise tax on the fair market value of stock repurchased by “covered corporations” beginning in 2023 (the “Excise Tax”). The Excise Tax is imposed on the repurchasing corporation itself, not its stockholders from which the stock is repurchased. In general, publicly traded domestic corporations are “covered corporations.” Because each of Paramount and New Paramount is a Delaware corporation and its securities are or will be traded on Nasdaq, Paramount believes that it is, and New Paramount

 

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will be, a “covered corporation” for this purpose. The amount of the Excise Tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the Excise Tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the Excise Tax.

Any redemption or other repurchase that Paramount or New Paramount make of their respective shares may be subject to the Excise Tax. Whether and to what extent Paramount or New Paramount would be subject to the Excise Tax with respect to any such redemption or other repurchase would depend on a number of factors, including the nature and amount of any “PIPE” or other equity issuances within the same taxable year of the redemption or repurchase.

Executive officers, directors and affiliates of Paramount and Skydance may have interests in the Transactions that are different from, or in addition to, the rights of the Paramount stockholders and Skydance equityholders, respectively.

Certain of the executive officers, directors and affiliates of Paramount and Skydance may have interests in the Transactions that are different from, or in addition to, those of Paramount stockholders and Skydance equityholders, respectively. These interests include the potential continued employment of certain executive officers of Paramount and Skydance by New Paramount, the potential appointment of certain Paramount directors and Skydance as directors of New Paramount and the rights of Paramount and Skydance executive officers and directors to indemnification by New Paramount and the other surviving entities in the Mergers. These interests may also include the conversion of outstanding Paramount equity awards into equity awards of New Paramount in the New Paramount Merger and enhanced change of control severance benefits. Additionally, pursuant to the NAI Transaction, the NAI Equity Investors agreed to purchase, upon the terms and subject to the conditions set forth in the NAI Stock Purchase Agreement, all of the outstanding equity interests of NAI from the NAI Shareholders. As a beneficiary of the NAI Shareholders, Shari E. Redstone will receive a portion of the proceeds from the NAI Transaction. Furthermore, the New Paramount Board will consist of up to 13 members designated by Skydance prior to the Closing, including David Ellison and, if requested by Shari E. Redstone and Tyler Korff prior to the Closing, each of Shari E. Redstone and/or Tyler Korff. Further, in connection with the NAI Transaction, the NAI Shareholders; certain directors and officers of NAI, including Ms. Redstone in her capacity as Chairperson, CEO and President of NAI (such individuals, the “NAI D&O Indemnitees”); NAI and NAIEH entered into an indemnification and contribution agreement, which terminated and superseded certain existing indemnification arrangements among the parties thereto and provided the NAI Shareholders and the NAI D&O Indemnitees with certain indemnification rights relating to the Transactions and the NAI Transaction from NAI and NAIEH capped at a maximum of $200 million. Affiliates of the NAI Equity Investors have guaranteed the payment and performance of the foregoing indemnification obligations of NAI and NAIEH, subject to the limitations set forth in the indemnification and contribution agreement. The foregoing indemnification obligations of NAI and NAIEH continue for ten years following the date of execution of the indemnification and contribution agreement, subject to extension for active claims thereunder and automatic termination upon the occurrence of certain triggering events set forth in the indemnification and contribution agreement, including the termination of the NAI Stock Purchase Agreement. The indemnification arrangements that were in place prior to the signing of the NAI Stock Purchase Agreement and that were terminated and superseded by the indemnification and contribution agreement provided, among other things, for uncapped indemnification of the NAI D&O Indemnitees and the NAI Shareholders by NAI and NAIEH for losses incurred in connection with their status as the controller of NAI and, in the case of Ms. Redstone, Paramount, in any litigation relating to the Transactions or the NAI Transaction. For a description of the interests of Paramount and Skydance executive officers, directors and affiliates in the Transactions, see the section entitled “Interests of Affiliates in the Transactions” beginning on page 267 of this information statement/prospectus. For a description of the rights of stockholders of Paramount and stockholders of New Paramount before and following the Transactions, respectively, see the section entitled “Comparison of Stockholder Rights” beginning on page 296 of this information statement/prospectus. The members of the Special Committee and the Paramount Board who recommended that Paramount stockholders entitled to vote adopt the Transaction Agreement and

 

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approve the Transactions were aware of and considered these interests to the extent such interests existed at the time, among other matters, during their respective deliberations on the merits of the Transactions, in negotiating, evaluating and approving the Transaction Agreement and the Transactions, and in making the Paramount Board’s recommendation that the Paramount stockholders entitled to vote adopt the Transaction Agreement and approve the Transactions.

Failure to complete the Transactions could negatively impact the businesses or financial results of Paramount and the stock price of Paramount common stock.

If the Transactions are not completed, the ongoing business of Paramount may be adversely affected, and Paramount will be subject to several risks or consequences, including, but not limited to, the following:

 

•

Paramount will be required to pay certain costs relating to the Transactions whether or not the Transactions are completed, such as significant fees and expenses relating to regulatory filings, legal, accounting, financial advisory, consulting or other advisory fees and expenses, employee-benefit related expenses and/or filing and printing fees;

 

•

under the Transaction Agreement, Paramount is subject to certain restrictions on the conduct of its business prior to completing the Transactions, which may adversely affect its ability to execute certain of its business strategies;

 

•

litigation related to the failure to complete the Transactions or related to any enforcement proceeding that may be commenced against Paramount to perform its obligations pursuant to the Transaction Agreement;

 

•

matters relating to the Transactions may require substantial commitments of time and resources by Paramount management or the expenditure of significant funds in the form of fees and expenses, which could otherwise have been devoted to day-to-day operations or other opportunities that may have been beneficial to Paramount; and

 

•

Paramount may be required, under certain circumstances, to pay Skydance the Termination Fee.

Paramount may experience negative reactions from the financial markets and from its customers, commercial partners or employees in respect of the Transactions, including if the Transactions are not completed. Paramount could also be subject to litigation related to a failure to complete the Transactions or to enforce its obligations under the Transaction Agreement. If the Transactions are not completed, Paramount cannot assure its stockholders that the risks described above will not materialize and such risks may materially affect the business, financial results or prices of Paramount Class A common stock and Paramount Class B common stock.

For a description of the circumstances under which the Termination Fee is payable, see the sections entitled “Summary of the Transaction Agreement—Termination” and “Summary of the Transaction Agreement—Effect of Termination; Termination Fee; Expenses” beginning on pages 204 and 205, respectively, of this information statement/prospectus.

As of the date of this information statement/prospectus, two lawsuits have been filed challenging the Transactions and additional lawsuits may be filed in the future against Paramount, Skydance, NAI, their respective affiliates and/or their respective boards of directors and management and the Special Committee, challenging the Transactions. An adverse ruling in any such lawsuit could result in substantial costs and/or delay or prevent the completion of the Transactions.

In connection with the Transactions, on July 24, 2024, a purported holder of Paramount Class B common stock filed a putative class action lawsuit in the Court against NAI, Shari E. Redstone, Barbara M. Byrne, Linda M. Griego, Judith A. McHale, Charles E. Phillips, Jr., Susan Schuman, Skydance and David Ellison. The plaintiffs seek unspecified damages, costs and expenses, as well as other relief.

 

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Further, on April 30, 2024, a purported holder of Paramount Class B common stock filed a verified complaint for the inspection of books and records under DGCL Section 220 in the Court against Paramount, seeking the inspection of books and records of Paramount in order to investigate whether the Paramount Board, NAI, Shari E. Redstone and/or Paramount’s executive officers may have breached their fiduciary duties to Paramount’s stockholders for alleged diversion of corporate opportunities (the “220 Action”). The Court held a trial on July 24, 2024, relating to the 220 Action and denied the request for the inspection of books and records. The plaintiff in the 220 Action has since noticed an exception to the Court, and the matter is on appeal. Certain other purported holders of Paramount Class B common stock and Paramount Class A common stock have delivered demand letters to investigate similar alleged breaches of fiduciary duties in connection with the Transactions and are requesting the inspection of books and records.

Additionally, on August 20, 2024, LiveVideo. AI filed a lawsuit in the Southern District of New York against Shari Redstone, NAI, Christine Varney and Monica Seligman, alleging that defendants did not fairly consider its offer to purchase Paramount. The complaint asserts claims for unfair competition, tortious interference, unjust enrichment and aiding and abetting breach of fiduciary duty, among others, and seeks unspecified monetary damages, costs, as well as other relief. As of the date of this information statement/prospectus, the defendants have not been served.

For further information on litigation relating to the Transactions, see the section entitled “The Transactions—Litigation Relating to the Transactions” beginning on page 166 of this information statement/prospectus.

It is possible that additional litigation against Paramount, Skydance, NAI, their respective affiliates and/or their respective boards of directors and management and the Special Committee may be filed in the future. Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into transaction agreements in an effort to enjoin the relevant transactions or seek monetary relief. The outcome of any litigation, including those lawsuits described in the section entitled “The Transactions—Litigation Relating to the Transactions” beginning on page 166 of this information statement/prospectus, is uncertain and any such current or potential lawsuits could prevent or delay the Closing, result in reputational harm to New Paramount, negatively affect the price of New Paramount common stock and/or result in substantial costs to Paramount before or after the consummation of the Mergers. Any such current or future actions may create uncertainty relating to the Transactions and may be costly and distracting to Paramount management and New Paramount management. Further, the defense or settlement of any lawsuit or claim that remains unresolved at the time the Transactions are completed may involve significant costs, including settlement costs, and may otherwise adversely affect New Paramount’s business, financial condition, results of operations or cash flows.

Paramount may waive one or more of the conditions to the Closing without re-obtaining stockholder approval.

Paramount (upon the recommendation of the Special Committee) has the right to waive, in whole or in part, certain of the conditions to the Closing, to the extent permitted by applicable law. Any such waiver may not require re-obtaining the approval of Paramount’s stockholders (which has already been obtained via the Written Consent), in which case Paramount will have the ability to complete the Transactions without seeking additional stockholder approval. Additionally, if a new stockholder approval were to be required for any such waiver, the Specified NAI Stockholders’ approval would be sufficient. Any determination as to whether to waive any condition to the Closing, whether stockholder approval would be re-obtained as a result of any such waiver or whether this information statement/prospectus would be amended as a result of any waiver will be made by Paramount (upon the recommendation of the Special Committee) at the time of such waiver based on the facts and circumstances as they exist at that time, and any such waiver could have an adverse effect on New Paramount and the current stockholders of Paramount.

 

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Paramount, Skydance and, following completion of the Transactions, New Paramount must continue to retain, motivate and recruit executives and other key employees, which may be difficult in light of uncertainty regarding the Transactions and failure to do so could negatively affect Paramount, Skydance and New Paramount.

Both Paramount and Skydance must continue to retain, motivate and recruit executives and other key employees during the period prior to completion of the Transactions. Moreover, New Paramount must be successful at retaining and motivating key employees and service providers, including entertainers, performers and production talent, following the completion of the Transactions. New Paramount’s performance will be substantially dependent on the performance of members of its executive management, other key employees, and service providers, including entertainers, performers and production talent. See the risk factor entitled “—Risks Relating to Skydance’s Business—Risks Relating to Skydance’s Human Capital—Skydance’s success depends on retention of certain key employees and talent” beginning on page 67 of this information statement/prospectus.

Experienced employees and talent in the industries in which Paramount and Skydance operate are in high demand and competition for such employees and talent can be intense. Employees of both Paramount and Skydance may experience uncertainty about their future role with New Paramount until, or even after, strategies with regard to New Paramount as a combined company are announced or executed. The potential distractions of the Transactions may adversely affect the ability of Paramount, Skydance or, following completion of the Transactions, New Paramount to retain, motivate and recruit executives and other key employees and service providers, including entertainers, performers and production talent, and keep them focused on applicable strategies and goals. A failure by Paramount, Skydance or, following the completion of the Transactions, New Paramount to attract, retain and motivate executives, other key employees and service providers, including entertainers, performers and production talent, during the period prior to or after the completion of the Transactions, as applicable, could have a negative impact on the businesses of Paramount, Skydance and New Paramount.

Furthermore, if key employees or talent depart or are at risk of departing due to issues including the uncertainty and difficulty of integration, financial security or a desire not to become employees or talent of New Paramount, Paramount, Skydance and/or New Paramount may incur significant costs to retain such individuals or to identify, hire and retain replacements for departing employees and talent and may lose significant expertise and talent relating to the business of Paramount, Skydance and/or New Paramount, and New Paramount’s ability to realize the anticipated benefits of the Transactions may be adversely affected. The loss of any member of New Paramount’s senior management team could impair its ability to execute its business plan and growth strategy, have a negative impact on its revenues and the effective working relationships that its executive management have developed and cause employee morale problems and the loss of additional key employees, agents, managers and clients.

The Transactions may trigger change in control or other provisions in certain agreements, which may allow third parties to terminate or alter existing contracts or relationships with Paramount or Skydance.

Each of Paramount and Skydance has contracts with customers, licensees, vendors, landlords, lenders, business partners and other third parties, which may require Paramount and Skydance, respectively, to obtain consents from these other parties in connection with the Transactions. If these consents cannot be obtained, the counterparties to these contracts and other third parties with which Paramount or Skydance currently has relationships may have the ability to terminate, reduce the scope of or otherwise materially adversely alter their relationships with Paramount or Skydance, as applicable, in anticipation of the Transactions or with New Paramount following the Transactions. The pursuit of such rights may result in Paramount, Skydance or New Paramount suffering a loss of potential future revenue or incurring liabilities in connection with a breach of such agreements or losing rights that are material to their respective businesses.

Any such disruptions could adversely impact New Paramount’s ability to achieve the anticipated benefits of the Transactions. The adverse effect of such disruptions could also be exacerbated by a delay in the completion of the Transactions or the termination of the Transaction Agreement.

 

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The opinion of the Special Committee’s financial advisor will not be updated to reflect changes in circumstances between the signing of the Transaction Agreement on July 7, 2024 and the completion of the Transactions on the Closing Date.

The Special Committee’s financial advisor issued an opinion on July 7, 2024 in connection with the signing of the Transaction Agreement. The Special Committee has not obtained an updated opinion from its financial advisor as of the date of this information statement/prospectus and does not anticipate asking its financial advisor to update its opinion. Changes in the operations and prospects of Paramount or Skydance, general market and economic conditions and other factors that may be beyond the control of Paramount or Skydance, and on which the Special Committee’s financial advisor’s opinion was based, may significantly alter Paramount’s business prospects and the price of the shares of Paramount common stock by completion of the Transactions. The opinion of the Special Committee’s financial advisor does not speak as of the time the Transactions will be completed or as of any date other than the date of such opinion. For a description of the opinion that the Special Committee received from its financial advisor, see the section entitled “The Transactions—Opinion of the Special Committee’s Financial Advisor” beginning on page 154 of this information statement/prospectus.

Paramount stockholders will not be entitled to appraisal rights in connection with the Transactions.

Section 262 of the DGCL provides that stockholders have the right, in some circumstances, to dissent from certain corporate actions and to instead demand payment of the fair value of their shares. Stockholders do not have appraisal rights with respect to shares of any class or series of stock if such shares of stock, or depositary receipts in respect thereof, are either (a) listed on a national securities exchange or (b) held of record by more than 2,000 holders, unless the stockholders receive in exchange for their shares anything other than shares of stock of the surviving or resulting corporation (or depositary receipts in respect thereof), or of any other corporation that is publicly listed or held by more than 2,000 holders of record, cash in lieu of fractional shares or fractional depositary receipts described above or any combination of the foregoing.

Therefore, because the shares of Paramount’s common stock are currently listed on Nasdaq, a national securities exchange, and the holders of Paramount’s common stock (other than the Specified Stockholders, with respect to shares of Paramount Class B common stock, and the Specified NAI Stockholders, with respect to shares of Paramount Class A common stock) will be entitled to elect to receive, in connection with the Transactions, the entirety of their merger consideration in the form of shares of New Paramount Class B common stock (i.e., shares of which will also be listed on Nasdaq), holders of Paramount’s common stock (other than the Specified Stockholders, with respect to shares of Paramount Class B common stock, and the Specified NAI Stockholders, with respect to shares of Paramount Class A common stock) will not have rights under the DGCL to dissent from, or demand payment for, their shares in connection with the Transactions. NAI and the other Specified NAI Entities irrevocably waived all dissent rights under the DGCL pursuant to the Voting Agreement.

Risks Relating to Paramount’s Business

You should read and consider the risk factors relating to Paramount’s business described in the sections entitled “Risk Factors” in Paramount’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 28, 2024, and Paramount’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024, as filed with the SEC on August 8, 2024, each of which is incorporated by reference into this information statement/prospectus. For further information, see the section entitled “Where You Can Find More Information” beginning on page 316 of this information statement/prospectus.

Risks Relating to Skydance’s Business

The success of Skydance’s business depends on the acceptance of its content by audiences, which may be unpredictable and volatile.

The economic success of Skydance’s live-action and animated films, television programming, interactive games and other ancillary content is largely determined by Skydance’s ability to produce content that appeals to

 

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a broad audience and to its third-party distributors. The production of live action and animated films, television programs, sports content and interactive games is an inherently risky business because the revenue Skydance derives and its ability to find distributors for its content depend primarily on consumer tastes and preferences that often change in unpredictable ways. The appeal, success and performance of Skydance’s content with consumers, as well as with third-party licensees and other distribution partners, are critical factors that can affect the revenue that Skydance receives. Skydance’s success depends on its ability to consistently create content that meets the changing preferences of audiences. For example, feature films that perform well upon initial theatrical release generally also have commercial success in subsequent distribution channels. Therefore, the underperformance of a feature film upon its theatrical release can result in lower-than-expected revenues. For Skydance’s content that is licensed to third-party distributors such as streaming platforms, the performance of such content may determine whether additional seasons or sequels are ordered, which may impact Skydance’s revenues. Skydance needs to invest substantial amounts in the production of its live action and animated films, television programs, sports content and interactive games before it learns whether such content will reach anticipated levels of popularity with consumers and third-party distributors. Failing to gain the level of audience acceptance Skydance expects for its content may negatively impact its business, financial condition and results of operations.

The long-term economic success of any of Skydance’s live-action and animated films, television programming, interactive games and other ancillary content cannot be predicted because the revenue derived from the content that Skydance produces (which does not necessarily directly correlate with the production or marketing costs incurred) depends upon its acceptance by the public and third-party distributors, which may vary. The commercial success of Skydance’s content also depends upon the quality and acceptance of competing content available in the applicable marketplace. Other factors, including the availability of alternative forms of entertainment and leisure time activities, the availability and quality of content created by distributors internally, piracy and Skydance’s ability to develop strong brand awareness may also affect the audience demand for Skydance’s content.

Additionally, the number of feature films, television programming or interactive games produced and released by competitors may create an oversupply of content in the market and may make it more difficult for Skydance’s content to succeed. Oversupply of such content may become most pronounced during peak release times, such as the summer or the November-December time periods, when theater attendance has traditionally been highest, streaming activity can be high and consumers are more likely to purchase games and other content. Skydance may also not be able to release all of its content during those times, particularly given that Skydance does not control the distribution of its content and is reliant on third parties, and, therefore, may miss potentially higher gross box-office receipts, streaming numbers and revenue. See the risk factor entitled “—Skydance relies on a few major distributors to distribute its content and the loss of any of those distributors could reduce its revenues and materially adversely affect its business, financial condition and results of operations” beginning on page 58 of this information statement/prospectus.

Consequently, the failure of Skydance’s live action and animated films, television programs, sports content and interactive games to gain acceptance with consumers and third-party distributors could result in costs not being recouped or anticipated revenues and profits not being realized and could adversely affect its business, financial condition and results of operations.

The production of live-action and animated films, television programming, interactive games and other ancillary content is capital-intensive and Skydance’s capacity to generate cash from such content may be insufficient to meet anticipated cash requirements.

The production and development of live-action and animated films, television programming, interactive games and other ancillary content requires substantial capital. A significant amount of time may elapse between expenditure of funds for the production and development of content and the receipt of revenues after the release or distribution of such content. Skydance may not be able to successfully implement arrangements to reduce the risks of production exposure such as fully monetizing tax credits, government or industry rebates or other soft money benefits. In addition, the nature of creative content can be unpredictable and significant costs may be

 

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incurred in excess of those originally forecasted. From time to time, the production and/or development of Skydance’s content incurs substantial budget overages. Skydance has in the past and may in the future enter into co-financing commitments to support the financing of the films it produces or co-produces with third parties, in which case it may be responsible for an agreed portion of budget overages, the budgets for which may or may not be controlled by Skydance under such arrangements. In addition, Skydance may experience delays and increased costs due to disruptions or events beyond its control. For example, in 2023, strikes by the WGA and SAG-AFTRA (as defined herein) resulted in months-long shutdowns in television and film production. See the risk factor entitled “—Risks Relating to Skydance’s Human Capital—Labor disputes could disrupt Skydance’s operations and adversely affect its business, financial condition and results of operations” beginning on page 66 of this information statement/prospectus. If the production and/or development of its content incurs substantial budget overruns, Skydance may have to seek additional financing or fund the overrun itself. Increased costs or budget overruns incurred with respect to the production or development of particular content may prevent its completion or release, may result in a delayed release and the postponement to a potentially less favorable date, or may result in Skydance’s inability to recoup its costs of certain content. This could adversely affect the financial performance of certain content, and the overall financial success of such content. Any of the foregoing could have a material adverse effect on Skydance’s business, financial condition and results of operations.

Skydance relies on a few major distributors to distribute its content and the loss of any of those distributors could reduce its revenues and materially adversely affect its business, financial condition and results of operations.

Skydance generates a substantial majority of its revenue through relationships with a limited number of distributors of its content. Skydance may not be able to maintain such relationships or enter into or renew its agreements with such distributors in the future, or may not be able to obtain favorable terms in such agreements, including those related to production and distribution fees, profit sharing and the types of rights Skydance grants to distributors. The revenue concentration among a limited number of major distributors and the failure to maintain relationships or enter into or renew agreements with any distributor, or obtain favorable terms, could reduce the distribution of Skydance’s content and decrease the potential audience for such content, thereby negatively affecting Skydance’s growth prospects and revenues. Skydance received 70% of its revenue from Netflix, 13% from Apple, and 13% from Paramount for the six months ended June 30, 2024. Skydance received 43% of its revenue from Apple, 29% from Netflix, 16% from Amazon and 9% from Paramount in the year ended December 31, 2023.

Skydance may not maintain favorable relationships with certain major distributors and the distributors may, in the future, choose to solely distribute content they produce themselves. In addition, certain of Skydance’s long-term contracts with distributors and licensors contain “key person” protections allowing such contracts to be terminated if an individual specified as a “key person” no longer provides services to such counterparty on behalf of Skydance under the contract. If Skydance were to lose any of its distribution relationships, or if any of these distributors decline to distribute Skydance content and/or gain greater market power, Skydance’s business, financial condition and results of operations may be materially adversely affected. Such distributors may also be adversely affected by economic conditions, including as a result of global pandemics, wars, geopolitical conflicts, rising interest rates, inflation or a recession, which could also affect Skydance’s revenues and distribution relationships. Because the distributors of Skydance’s films and other content are third parties, Skydance is dependent on the timing, accuracy and sufficiency of the information Skydance receives from its distributors.

Skydance operates in highly competitive and dynamic industries and its business, financial condition and results of operations could be adversely affected if it does not compete effectively.

Skydance faces substantial and increasing competition to attract creative talent, to develop and produce high-quality content and to distribute its content on a variety of third-party platforms. Competition for talent, content, audiences, service providers, production infrastructure and distribution is intense and comes from other content studios and independent content producers and from major film studios, television networks and stations, streaming services, pirated content providers, game developers and/or publishers, social media and other

 

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entertainment outlets and platforms. Skydance also competes with additional entrants into the market for the production and development of original content. Skydance’s competitors include companies with interests in multiple media and entertainment businesses that are often vertically integrated, as well as companies in adjacent sectors with significant financial, marketing and other resources, greater efficiencies of scale and more competitive pricing. Skydance’s competitors may also enter into business combinations or alliances that strengthen their competitive position.

These competitive pressures have increased and may continue to increase. Accordingly, the prices Skydance pays for talent and intellectual property rights have resulted in, and may continue to result in, significant cost increases. Skydance invests significant resources to produce and develop original content. If these competitive pressures continue to increase, Skydance may not be able to produce or develop content in a cost-effective manner. Accordingly, there can be no assurance Skydance will realize anticipated returns on its investments. This competition could result in a decrease in demand for Skydance’s content and, therefore, a decrease in Skydance’s revenues, as well as increased content costs and promotional and other expenses, which can negatively affect Skydance’s ability to generate revenues and profitability. There can be no assurance that Skydance will be able to compete successfully in the future against existing or new competitors, or that competition in the marketplace will not have an adverse effect on its business, financial condition or results of operations.

The unpredictable and constantly shifting nature of consumer behavior, as well as evolving technologies and distribution models, have affected, and could continue to adversely affect, Skydance’s business, financial condition and results of operations.

Skydance’s success depends on its ability to anticipate and adapt to shifting content consumption patterns, evolving technologies and distribution models. Skydance’s ability to create popular content is key to its success and ability to generate revenues. The revenues Skydance generates primarily depend on its ability to consistently anticipate and satisfy consumer tastes and expectations in the United States and internationally. Consumer tastes and behaviors change frequently, and it is a challenge to anticipate what will be successful at any point in time. The popularity of Skydance’s content is affected by its ability to target key audiences, including acceptance by its third-party distributors, as well as the availability of alternative forms of entertainment and leisure-time activities, general economic conditions and other tangible and intangible factors, all of which can be unpredictable. Declines in the popularity of the content Skydance produces could have an adverse effect on its business, financial condition or results of operations.

Evolving technologies and distribution models and the size of the entertainment and content market affect the demand for Skydance’s content, how its content is developed, produced, distributed and consumed, the sources and nature of competing content offerings and the options available to its target audiences, all of which can affect how Skydance generates and maintains predictable revenues and profitability. These shifts in consumer behavior may also be exacerbated by future disruptions to Skydance’s operations, including prolonged disruptions to its ability to create content caused by global events outside Skydance’s control such as health outbreaks or pandemics similar to COVID-19 or industry-wide strikes similar to what Skydance experienced in 2023 with the WGA and SAG-AFTRA (as defined herein) strikes.

Damage to Skydance’s reputation or brand could adversely affect its business, financial condition and results of operations.

Skydance’s reputation and brand are critical to its success. Skydance’s reputation depends on a number of factors, including the quality of its content and its ability to successfully innovate and produce and develop future content. Because Skydance’s brand engages consumers across its businesses, including film and animation, television, games and sports, damage to its reputation or brand in one business may have an impact on its other businesses. Significant negative claims or publicity regarding Skydance’s business or its business decisions, operations, practices, content, products, social responsibility and culture, management, employees, business partners and individuals associated with the content it creates, as well as Skydance’s inability to adequately prepare for or

 

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respond to such negative claims or publicity, may damage its brand or reputation, even if such claims are untrue. Damage to Skydance’s reputation or brand could impact its business, financial condition and results of operations.

Skydance shares control in certain joint ventures and other investments, which limits its ability to manage third-party risks associated with these arrangements.

Skydance participates in joint ventures and other non-controlling investments, including, for example, its Skydance Sports, LLC joint venture with the NFL, the Nocturna joint venture, and the Skydance console gaming joint venture, and may continue to participate in such arrangements in the future. In these joint ventures and investments, Skydance has shared, or may share, control over the operation of the assets and businesses. Accordingly, Skydance may be unable to act without the approval of its partners. Such joint ventures and investments may also involve risks such as the possibility that a partner in a joint venture or investment might have economic or business interests or goals that are inconsistent with Skydance’s business interests or goals. In addition, the joint ventures and other non-controlling investments may have intellectual property rights, access to certain creators or preferential access to certain rights that may be renegotiated or that may terminate or expire, any of which could have an adverse effect on the business, financial condition and results of operations of such joint ventures and other non-controlling investments. Additionally, Skydance relies on its relationships with certain joint venture counterparties, such as the NFL for the production of its sports-related content. Any deterioration in Skydance’s relationship with the NFL in connection with the Skydance Sports, LLC joint venture or otherwise could have a material adverse effect on its business, financial condition and results of operations.

Preparation of Skydance’s financial statements requires it to have access to information regarding the results of operations, financial condition and cash flows of its joint ventures and other investments. Additionally, if Skydance’s joint ventures and other investments do not provide this information for any meaningful period or fail to meet expected deadlines, Skydance may be unable to satisfy its financial reporting obligations. Any deficiencies in Skydance’s internal control over financial reporting may affect its ability to report its financial results accurately or to prevent or detect fraud in any of the joint ventures and other investments it forms a part of or participates in. Such deficiencies also could result in restatements of, or other adjustments to, Skydance’s previously reported operating results.

Losses due to asset impairment charges could have an adverse effect on Skydance’s business, financial condition and results of operations.

Certain events and circumstances, including deterioration of market conditions, increases in interest rates, and declines in projections (including from changes in consumer behavior and/or a decrease in audience acceptance of Skydance’s content), or a material change to management’s assessment of the recoverability of the carrying value for particular content, could result in a downward revision in the estimated fair value of Skydance and/or its long-lived assets, which could result in a noncash impairment charge. Any such impairment charge could have a material adverse effect on Skydance’s results of operations.

Risks Relating to Skydance’s Business Continuity, Cybersecurity and Privacy and Data Protection

Disruptions or failures of, or attacks on, Skydance’s or its service providers’ networks, information systems and other technologies could result in the disclosure of business, confidential, or personal information, disruption of Skydance’s businesses, damage to its brands and reputation, and legal exposure and financial losses, which could materially adversely affect its business, financial condition and results of operations.

Cloud services, networks, software, information systems, computer systems, hardware, and other technologies Skydance uses or that are used by Skydance’s third-party service providers and its product suppliers (“Providers”), including technology systems used by Skydance and its Providers in connection with the production and distribution of its content (including content delivery networks to stream programming, films, interactive games and other content in high volume to viewers) and that otherwise perform important functions (“Systems”), are critical to Skydance’s business activities. These Systems have experienced, and are expected to

 

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continue to experience, cybersecurity attacks intended to disrupt Skydance’s services and operations, exfiltrate, corrupt or prevent its access and/or use of its data, proprietary information or intellectual property, or exfiltrate or corrupt the personal and other information of employees, contractors, customers and other third parties.

Shutdowns, disruptions and attacks on Skydance or its Providers’ Systems pose increasing risks to Skydance’s business and may be caused by diverse threat actors, such as state-sponsored organizations, opportunistic hackers, hacktivists and other hackers, and may include social engineering/phishing; third-party hacking; dissemination of computer viruses, worms, malware, ransomware and other destructive or disruptive software; malfeasance by insiders; denial-of-service attacks and other bad acts; human or technological error; and malicious code embedded in open-source software, or misconfigurations, bugs or other vulnerabilities in commercial software that is integrated into Skydance’s (or its Providers’) Systems, products or services. Shutdowns and disruptions may also occur as a result of power outages, natural disasters, extreme weather, terrorist attacks or other similar events. Shutdowns, disruptions and attacks could have an adverse impact on Skydance, its business partners and other Providers, its employees and consumers of its content, including degradation or disruption of service, loss of data or intellectual property, unauthorized disclosures of or access to confidential or personal information, and damage to equipment and data. Steps Skydance or its Providers take to enhance, improve, protect or upgrade Systems may not be sufficient to avoid shutdowns, disruptions and attacks. Significant events could result in a disruption of Skydance’s operations and reduction of its revenues, the loss of or damage to intellectual property, the loss of or damage to the integrity of data used by management to make decisions and operate its businesses, consumer dissatisfaction or a loss of consumers and damage to Skydance’s reputation or brand. In addition, Skydance’s recovery and business continuity plans may prove inadequate to address any such disruption, failure or cybersecurity attack.

Skydance is also subject to risks caused by the misappropriation, misuse, falsification or intentional or accidental release or loss of business or personal information or content maintained in Skydance’s or its Providers’ Systems, including proprietary and personal information of third parties and employees, business information, intellectual property or other confidential information. Outside parties may attempt to penetrate Skydance’s or its Providers’ Systems, or fraudulently induce employees or business partners to disclose sensitive or confidential information, to gain access to Skydance’s proprietary data or the data of its employees or contractors, its content or other intellectual property. The number and sophistication of attempted and successful phishing, information security breaches or disruptive ransomware, denial-of-service attacks and other risks have increased significantly in recent years, and Skydance and/or its Providers may be a particularly attractive target for such attacks. Because the techniques used to obtain unauthorized access to, or disable, degrade or sabotage, networks and Systems change frequently, including the increasing use of techniques and tools—including artificial intelligence—that circumvent security controls, evade detection and remove forensic evidence, Skydance or its Providers may be unable to anticipate these techniques, implement adequate security measures or remediate flaws or detect intrusion on a timely or effective basis. Skydance also relies on proprietary and third-party technologies to optimize operations across certain areas of Skydance’s business. The use of these technologies may lead to unintentional disclosure of sensitive, confidential, proprietary or personal information of its and of its employees. Such technologies may be subject to manipulation or prone to error from data or manipulation outside Skydance’s direct control. Remote and hybrid working arrangements at Skydance (and at many Providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.

Skydance operates an information security program to identify and mitigate cybersecurity risks. Despite its efforts, the risk of unauthorized access, modification, exfiltration, destruction or denial of access with respect to its data, the data of its customers and its employees or its Systems and other cybersecurity attacks cannot be eliminated entirely, and the risks associated with a potential incident remain. If a breach or perceived breach of its Systems or those of its Providers occurs, the perception of the effectiveness of Skydance’s security measures could be harmed, Skydance could lose distributors, consumers and business partners; its reputation, brand, credibility and the overall attractiveness of its content and products could be damaged; and it could be required to expend significant amounts of money and other resources to repair, replace or recover such Systems. Skydance could also be subject to actions

 

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or investigations by regulatory authorities and claims asserted in private litigation (including class actions), as well as fines and penalties. The costs relating to any data breach could be material, and Skydance may not have adequate insurance coverage to compensate it for any losses associated with such events.

Business interruptions from circumstances or events out of Skydance’s control could adversely affect its business, financial condition and results of operations.

Skydance’s operations and business are vulnerable to outages and interruptions due to fire, floods, power loss, telecommunications failures, information technology failures or outages, loss of data, security breaches, cyberattacks or other cybersecurity incidents, personnel misconduct or error, global pandemics, work stoppages and strikes, and similar events, which may be beyond its control. Skydance’s headquarters are located in Southern California, which is subject to natural disasters such as earthquakes and wildfires. Skydance may not have sufficient protection from its recovery plans and its insurance may be insufficient to compensate Skydance for losses that occur. Any losses or damages Skydance incurs as a result of such outages or interruptions could have a material adverse effect on its business, financial condition and results of operations.

Risks Relating to Skydance’s IP and Infringement

Infringement of Skydance’s content reduces, and could continue to reduce, revenue received from the distribution of its live-action and animated films, television programming, interactive games and other ancillary content.

Skydance’s success depends in part on its ability to maintain and monetize its intellectual property rights. Skydance is fundamentally a content company and infringement of its content adversely affects the value of its business. Copyright infringement is particularly prevalent in many parts of the world that lack effective laws and technical protection measures similar to those in the United States and Europe or lack effective enforcement of such measures, or both. Such foreign copyright infringement can also create a supply of pirated content for major markets. The interpretation of copyright, trademark and other intellectual property laws as applied to Skydance’s content, and its infringement-detection and enforcement efforts, remain in flux. The failure to appropriately enforce and/or the weakening of existing intellectual property laws could make it more difficult for Skydance to adequately protect and monetize its intellectual property and thus negatively affect its value.

Copyright infringement is made easier by the wide availability of higher Internet bandwidth and reduced storage costs, as well as tools that undermine encryption and other security features and enable infringers to disguise their identities online. Skydance and its production and distribution partners operate various technology systems in connection with the production and distribution of Skydance’s content, and intentional or unintentional acts could result in unauthorized access to such technology systems and, consequently, Skydance’s content. The continuing proliferation of digital formats and technologies heightens this risk. Internet-connected televisions, set-top boxes and mobile devices are ubiquitous, and many can support illegal retransmission platforms, and illicit video-on-demand or streaming services and preloaded hardware provide more accessible, versatile and legitimate-looking environments for consuming unlicensed interactive games, film and television content. Unauthorized access to Skydance’s content could result in the premature release of its content, which could result in a reduction in demand for authorized content and would likely have adverse effects on the value of the affected content and Skydance’s ability to monetize it. Additionally, laws and regulations governing new technologies, including around the use of artificial intelligence and machine learning technologies (“AI Technologies”), remain unsettled, and legal and further technological developments in this area could impact Skydance’s ability to protect against infringing uses of its content.

Copyright infringement reduces the revenue that Skydance and its distribution partners are able to generate from the legitimate sale and distribution of Skydance’s content, undermines lawful distribution channels, reduces the public’s and some partners’ perceived value of Skydance’s content and inhibits Skydance’s ability to recoup or profit from the costs incurred to create such content. Efforts to prevent the unauthorized reproduction, distribution and exhibition of Skydance’s content may affect its profitability and may not be successful in preventing harm to its business.

 

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Skydance’s business is dependent on the maintenance and protection of its intellectual property, and pursuing and defending against intellectual property claims may have a material adverse effect on its business, financial condition and results of operations.

Skydance’s ability to compete depends, in part, upon successful maintenance and protection of its intellectual property and other proprietary business information. Skydance attempts to maintain and protect its proprietary and intellectual property rights through available copyright, patent, trademark and other intellectual property laws, contractual provisions in agreements with its employees, contractors and production partners that develop intellectual property on its behalf, and licensing and distribution arrangements with reputable international companies in specific territories and media for limited durations. Skydance has registered and applied to register its trademarks, copyrights and patents in the United States and foreign jurisdictions. However, there can be no assurance that pending or future U.S. or foreign trademark, copyright or patent applications will be approved in a timely manner or at all, or that such registrations or issuances will effectively protect Skydance’s brand names, technology and content. If Skydance is unable to protect its brand names, technology and content, its business, financial condition and results of operations could be adversely affected. In addition, despite these precautions, existing copyright, patent and trademark laws afford only limited practical protection in certain foreign jurisdictions, and mechanisms for enforcement may be inadequate. As a result, it may be possible for unauthorized third parties to knowingly or unknowingly infringe or challenge Skydance’s intellectual property or proprietary rights, including by copying and distributing Skydance’s content, or certain portions of its content, which could have a material adverse effect on its business, financial condition and results of operations. Moreover, there can be no assurance that Skydance, its content producers or other third parties from whom it has licensed or acquired content, have, in every instance, entered into agreements that contain appropriate protections regarding intellectual property, including non-disclosure, “work made for hire” or valid assignment provisions, with each party who has developed intellectual property on their respective behalf.

Litigation may also be necessary to enforce Skydance’s intellectual property rights, to protect its trade secrets, or to determine the validity and scope of the proprietary rights of others. Any such litigation could result in substantial costs and the diversion of resources and could have a material adverse effect on Skydance’s business, financial condition and results of operations. Skydance’s more successful and popular products or franchises may experience higher levels of infringing activity, particularly around key release dates. Alleged infringers have claimed and may claim that their products or content are permitted under fair use or similar doctrines, that they are entitled to compensatory or punitive damages because Skydance’s efforts to protect its intellectual property rights are illegal or improper, or that its key trademarks or other significant intellectual property are not legally protectable or enforceable. Such claims, even if meritless, may result in adverse publicity or costly litigation. Skydance may receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurance that a favorable final outcome will be obtained in all cases.

Additionally, despite Skydance’s efforts to obtain all permissions and clearances it deems necessary in relation to the content it creates, one of the risks of the entertainment content production and development business is the possibility that others may claim that Skydance’s content or production techniques misappropriate, infringe or otherwise violate the intellectual property rights of third parties, and litigation may be necessary to defend against claims of infringement or invalidity. Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, require the development of alternative technology or business practices, injunctions against Skydance, or payments for licenses or damages. These risks may be amplified by the increase in third parties whose sole or primary business is to assert such claims. Regardless of the validity or the success of the assertion of any such claims, Skydance could incur significant costs and diversion of resources in enforcing its intellectual property rights or in defending against such claims, which could have a material adverse effect on its business, financial condition and results of operations.

In addition, Skydance may, from time to time, lose or cease to control certain of its rights in the intellectual property on which it relies. Pursuant to applicable intellectual property laws, such rights may expire or be transferred to third parties as a result of the operation of copyright reversion and/or termination of transfer rights

 

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under applicable laws. Additionally, where Skydance acquires rights in certain properties or content, Skydance may only acquire such rights for a limited period or subject to other restrictions. Where Skydance loses intellectual property rights, it may not be able to re-acquire such rights on reasonable terms or at all, including due to materials entering the public domain. The loss of (or loss of control of) such intellectual property rights may adversely impact Skydance’s ability to prevent others from exploiting content based on such rights.

Moreover, Skydance does not fully own all of the content it develops and produces. As such, Skydance may not have control or decision-making power over the exploitation of such content, including how it is used and by which parties. The inability by Skydance to exercise control over such content makes it difficult for Skydance to make claims to enforce certain intellectual property rights and to prevent others from exploiting certain content, which could materially adversely affect Skydance’s business, financial condition or results of operations.

Certain aspects of Skydance’s business relies on third-party technology and third-party technology licenses may not continue to be available to Skydance in the future.

In addition to its proprietary technology, certain aspects of Skydance’s business rely on certain technology, particularly in its video game division and animation pipeline, that it licenses from third parties, including software that it uses with its proprietary software. These third-party technology licenses, or support for such licensed products and technologies, may not continue to be available to Skydance on commercially reasonable terms, or at all. Skydance cannot be certain that its licensors are not infringing the intellectual property rights of others, which may result in intellectual property infringement claims by third parties. The loss of or inability to maintain any of these technology licenses could result in delays in content releases until equivalent technology is identified, licensed and integrated. Any such delays or failures in content releases could materially adversely affect Skydance’s business, financial condition or results of operations.

Risks Relating to Macroeconomic and Political Conditions

Economic and political conditions in the United States and around the world could have an adverse effect on Skydance’s business, financial condition and results of operations.

Skydance’s businesses operate and have audiences, customers and partners worldwide. Accordingly, the economic conditions in the United States and around the world affect a number of aspects of its businesses. The global financial markets have experienced significant recent volatility, marked by declining economic growth, diminished liquidity and availability of credit, declines in consumer confidence, significant concerns about increasing and persistently high inflation and uncertainty about economic stability. The global financial markets have also been adversely affected by current geopolitical events. There can be no assurance further deterioration in credit and financial markets and confidence in economic conditions will not occur. Volatility and weakness in the capital markets, and the tightening of credit markets could adversely affect Skydance’s ability to obtain cost-effective financing. Increasing inflation in the United States raises its costs for labor and services and other costs required to operate its business.

Economic conditions in each market (such as current high inflation or global supply chain issues) can also impact the discretionary spending of Skydance’s consumers and therefore their willingness to access Skydance’s content, causing them to reduce their spending. Skydance may also be subject to longer payment cycles. In addition, foreign currency fluctuations have impacted, and may continue to impact, revenues and expenses of Skydance’s international operations and expose Skydance to foreign currency exchange rate risk. Skydance may also be impacted by the efficiency and dependability of the tax incentive regimes domestically and internationally.

Skydance’s businesses are also exposed to certain political risks inherent in conducting a global business, including retaliatory actions by governments reacting to changes in the United States and other countries, including in connection with trade negotiations; issues related to the presence of corruption in certain markets

 

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and enforcement of anticorruption laws and regulations; increased risk of political instability in some markets as well as conflict and sanctions preventing Skydance from accessing those markets; escalating trade, immigration and nuclear disputes; wars, acts of terrorism or other hostilities; and other political, economic or other uncertainties.

These political and economic risks could create instability in any of the markets where Skydance’s businesses generate revenues, which could result in a reduction of revenue or loss of investment that adversely affects its businesses, financial condition or results of operations.

Risks Relating to Skydance Legal and Regulatory Matters

Failures to comply with or changes in U.S. or foreign laws or regulations could have an adverse effect on Skydance’s business, financial condition or results of operations.

Skydance is subject to a variety of laws and regulations, in the United States and in the foreign jurisdictions in which Skydance or its partners operate, including laws and regulations relating to intellectual property, content regulation, privacy, data protection, anticorruption, repatriation of profits, tax regimes, quotas, tariffs or other trade barriers, currency exchange controls, operating license and permit requirements, restrictions on foreign ownership or investment, anticompetitive conduct, export and market access restrictions.

Skydance’s businesses could be adversely affected by new laws and regulations, changes in existing laws, changes in the interpretation or enforcement of existing laws by courts and regulators and the threat that additional laws or regulations may be forthcoming, as well as Skydance’s ability to enforce its legal rights. Laws and regulations governing new technologies, including generative AI Technologies, remain unsettled, and legal and regulatory developments in this area could also impact Skydance’s businesses. Skydance could be required to change or limit certain of its business practices, which could impact its ability to generate revenues. Skydance could also incur substantial costs to comply with new and existing laws and regulations, or face substantial fines and penalties or other liabilities, or be subjected to increased scrutiny from regulators and stakeholders, if it fails to comply with such laws and regulations.

Skydance is subject to complex, often inconsistent and potentially costly laws, regulations, industry standards and contractual obligations relating to privacy and personal data protection, and compliance with such laws, industry standards and contractual obligations may require significant expenditure and resources.

In connection with running its business, Skydance receives, stores, uses and otherwise processes information that relates to individuals and/or constitutes “personal data,” “personal information,” “personally identifiable information,” or similar terms under applicable data privacy laws (collectively, “Personal Information”), including from and about employees and business contacts. Skydance and its Providers are subject to a variety of federal, state and foreign laws, regulations, industry standards and contractual obligations in the United States and in other countries relating to privacy and the collection, use, transfer, storage and security of Personal Information, including certain types of sensitive Personal Information (e.g., biometric data). These requirements, and their application and interpretation are constantly evolving and may at times conflict. It is also possible that new laws, regulations and other requirements, or amendments to or changes in interpretations of existing laws, regulations and other requirements, may require Skydance to incur significant costs, implement new processes or change its handling of information and business operations.

In the United States, numerous states have passed comprehensive data privacy laws. These laws mandate a host of obligations for businesses regarding how they handle Personal Information and provide new and expansive rights to the residents of these states. For example, in California, the California Consumer Privacy Act (“CCPA”), which was recently amended to expand consumer rights to envelop information processed in the employment and business-to-business contexts, places certain obligations on businesses, such as providing notice to, and honoring requests from, consumers regarding their rights to access, correct or delete their personal

 

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information and/or stop certain processing of their personal information. The enactment of the CCPA prompted a wave of similar legislative developments in other states in the United States, which creates a patchwork of overlapping but different state laws. In addition, many other states are currently reviewing or proposing the need for greater regulation of the collection, sharing, use and other processing of information related to individuals or otherwise and there remains increased interest at the federal level for a new comprehensive federal data protection law to which Skydance would become subject if it is enacted, which may add additional complexity, variation in requirements, restrictions and potential legal risks, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data, and could result in increased compliance costs or changes in business practices and policies.

Outside the United States, in Europe, for example, Skydance is subject to the European Union General Data Protection Regulation (“EU GDPR”) and in the United Kingdom (“UK”), to the UK General Data Protection Regulation and Data Protection Act 2018 (the “UK GDPR”) (the EU GDPR and UK GDPR together referred to as the “GDPR”) which mandate comprehensive data protection compliance obligations in relation to Skydance’s collection and use of Personal Information, including regulating transfers of Personal Information out of the European Economic Area and UK. There is continuing legal complexity regarding international personal data transfers, and Skydance expects such data transfers to be subject to sustained scrutiny by regulators. As the regulatory guidance and enforcement landscape in relation to compliance with GDPR, including in relation to data transfers, continues to develop, Skydance may have to stop using certain tools and vendors and make other operational changes; Skydance may have to implement alternative data transfer mechanisms under the GDPR and/or take additional compliance and operational measures; and/or it could otherwise affect the manner in which Skydance conducts certain aspects of its business.

Compliance with privacy and data protection rules, regulations, industry standards and contractual obligations, which may be inconsistent with one another, and noncompliance could result in regulatory investigations and enforcement, significant monetary fines, breaches of contractual obligations and private litigation (including class actions) and other liability or expenses. Any actual or perceived noncompliance could also lead to harm to Skydance’s reputation, trust, publicity and market position, and may result in costly proceedings to ensure compliance or defend accusations of noncompliance, all of which could materially adversely affect its business, financial condition and results of operations.

Risks Relating to Skydance’s Human Capital

Labor disputes could disrupt Skydance’s operations and adversely affect its business, financial condition and results of operations.

Skydance and its business partners engage the services of writers, directors, actors, musicians and other creative talent, production crew members, trade employees, professional athletes and others who are subject to collective bargaining agreements. Any labor dispute may disrupt Skydance’s or its business partners’ operations and cause production delays, which could increase Skydance’s costs and have an adverse effect on its businesses, financial condition or results of operations. A strike by one or more of the unions that provide personnel essential to Skydance’s production of live-action and animated films, television programming, interactive games, and other ancillary content could delay or halt its ongoing production activities. Such a halt or delay, depending on the length of time involved, could cause a delay of the release date of such content and thereby could adversely affect Skydance’s revenue. In 2023, the Writers Guild of America (“WGA”) and the Screen Actors Guild-American Federation of Television and Radio Artists (“SAG-AFTRA”) commenced industry-wide strikes following the expiration of their collective bargaining agreements with the Alliance of Motion Picture and Television Producers, which negotiates with the guilds on behalf of content producers. These strikes resulted in months-long shutdowns in television and film production, and, while new three-year collective bargaining agreements were ultimately reached with the WGA and SAG-AFTRA (expiring in May and June 2026, respectively), negotiations with other unions could lead to further work stoppages or other labor disruptions. There can be no assurance Skydance will be able to renew its collective bargaining agreements as they expire or

 

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without work stoppages or other labor disruptions. Labor disputes may result in work stoppages, which may result in increased costs and decreased revenue, which could have a material adverse effect on Skydance’s business, financial condition and results of operations.

Skydance’s success depends on retention of certain key employees and talent.

Skydance’s success greatly depends on retention of its employees and other performers or technical and creative talent, and the loss of service of any of its key employees or talent could materially disrupt Skydance’s operations or delay the production and development of Skydance’s live-action and animated films, television programming, interactive games and other ancillary content. In particular, Skydance is dependent upon the services of David Ellison, Skydance’s founder and Chief Executive Officer, Skydance’s other executive officers and certain key creative employees, including directors, animators and producers. Skydance relies on these individuals to drive Skydance’s business plans, growth, success and brand. If David Ellison or any of Skydance’s key employees were to discontinue their service to Skydance due to death, disability or any other reason, or if their reputation is adversely impacted by personal actions or omissions or other events within or outside their control, Skydance’s reputation could be harmed, and their departure from Skydance could result in a material adverse effect on Skydance’s business, financial condition and results of operations. Skydance has entered into employment agreements with David Ellison and with all of its top executive officers and production executives. However, although it is standard in the film industry to rely on employment agreements as a method of retaining the services of key employees, these agreements cannot assure Skydance of the continued services of such employees. Skydance’s future success also depends upon its ability to attract, hire and retain certain key employees including producers, directors, animators, programmers, designers, developers, technicians and other performers or technical and creative talent to support Skydance’s increased production and development of live-action and animated films, television programming, interactive games and other ancillary content. Skydance competes for executives, employees and talent in highly specialized and evolving industries and its ability to attract, retain and engage such individuals may be impacted by several factors, including its reputation, workplace culture, training and employee development programs, compensation and benefits practices, executive succession management, and commitment to diversity, equity and inclusion.

Risks Relating to New Paramount After Completion of the Transactions

Risks Relating to the New Paramount Business

Combining the businesses of Paramount and Skydance may be more difficult, time-consuming or costly than expected and the actual benefits of combining the businesses of Paramount and Skydance may be less than expected, either or both of which may adversely affect New Paramount’s future results.

The success of the Transactions will depend, to a large extent, on New Paramount’s ability to integrate the Paramount and Skydance businesses in a manner that facilitates growth opportunities and achieves certain cost savings, operating synergies and revenue growth trends identified by each company without adversely affecting current revenues or investments in future growth. Such anticipated benefits may not be achieved if the businesses of Paramount and Skydance are not successfully combined. Although Paramount and Skydance expect that the Transactions will result in synergies and other benefits, even if New Paramount is able to integrate the two companies successfully, the anticipated benefits of the Transactions, as further described in the section entitled “The Transactions—Recommendations of the Special Committee and the Paramount Board; Paramount’s Reasons for the Transactions” beginning on page 140 of this information statement/prospectus, may not be realized fully or at all or may take longer to realize than expected.

The combination of two independent businesses is complex, costly and time-consuming and may divert significant management attention and resources towards integration planning at the expense of Paramount’s and Skydance’s ordinary course business practices and operations. This process also may disrupt Paramount’s and Skydance’s businesses. Paramount and Skydance have operated as independent businesses and will continue to operate as such until the completion of the Transactions. Upon completion of the Transactions, the management

 

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of New Paramount may face significant challenges in integrating the technologies, organizations, systems, procedures, policies and operations, as well as addressing the different business cultures at Paramount and Skydance, managing the increased scale and scope of the combined business, identifying and eliminating duplicative programs, and retaining key personnel. Failure to meet the challenges involved in combining the businesses and to realize the anticipated benefits of the Transactions could adversely affect the business, financial condition or results of operations of New Paramount. The combination of Paramount’s and Skydance’s businesses may also result in material unanticipated problems, expenses, liabilities, competitive responses, and loss of customer and other business relationships or strategic partnerships. The difficulties of combining the operations of Paramount and Skydance may include, among others:

 

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the diversion of management attention to integration matters and/or litigation matters brought against the companies;

 

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difficulties in integrating operations and systems, including intellectual property and communications systems, administrative and information technology infrastructure and financial reporting and internal control systems;

 

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challenges in conforming business cultures, standards, controls, procedures and accounting and other policies between the two companies;

 

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difficulties in integrating employees and compensation structures, and attracting and retaining key personnel, including talent;

 

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challenges in retaining existing, and obtaining new customers, viewers, suppliers, distributors, licensors, lessors, employees, business associates and others, including material content providers, writers, producers, directors, actors and other talent, and advertisers;

 

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difficulties in achieving anticipated cost savings, synergies, business opportunities, financing plans and growth prospects from the combination;

 

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difficulties in managing the expanded operations of a larger and more complex company;

 

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challenges in continuing to develop valuable and widely-accepted content and technologies;

 

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contingent liabilities that are larger than expected; and

 

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potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the Transactions.

Many of these factors are outside of the control of Paramount and Skydance and/or will be outside the control of New Paramount, and any one of them could result in lower revenues, higher costs and diversion of management time and energy, which could materially and adversely impact the business, financial condition or results of operations of New Paramount. In addition, even if the operations of the businesses of Paramount and Skydance are integrated successfully, the full benefits of the Transactions may not be realized, including, among others, the anticipated synergies, cost savings or growth opportunities. These benefits may not be achieved within the anticipated time frame or at all. Further, additional unanticipated costs may be incurred in the integration of the businesses of Paramount and Skydance. All of these factors could cause dilution to the earnings per share of New Paramount, decrease or delay the projected benefits of the Transactions, and negatively impact the price of the New Paramount Class B common stock following the Transactions. As a result, no assurances can be provided that the combination of Paramount and Skydance will result in the realization of the full benefits expected from the Transactions within the anticipated time frames or at all.

The financial assumptions, estimates, projections and synergies considered by the Special Committee and its financial advisor may not be realized, which may adversely affect the market price of New Paramount common stock following the completion of the Transactions.

In performing its financial analysis and rendering its opinion regarding the fairness of the merger consideration proposed to be paid to the holders of shares of Paramount common stock (other than Excluded

 

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Shares (as defined herein)), taken in the aggregate, from a financial point of view, as of the date thereof, pursuant to the Transaction Agreement, the financial advisor to the Special Committee relied on, among other things, certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of each of Paramount and Skydance, as well as certain estimated integration synergies in a transaction between Paramount and Skydance. See the section entitled “The Transactions—Certain Unaudited Prospective Financial Information” beginning on page 149 of this information statement/prospectus. The unaudited prospective financial information of each of Paramount and Skydance was not prepared with a view toward public disclosure, and the unaudited prospective financial information and the estimated integration synergies were not prepared with a view toward compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information.

The unaudited prospective financial information and synergies described in the preceding paragraph were based on numerous estimates and assumptions with respect to industry performance and competition, general business, economic, market and financial conditions and matters specific to Paramount’s and Skydance’s businesses, including the factors listed under “Risk Factors” beginning on page 45 of this information statement/prospectus, all of which are difficult to predict and many of which are beyond the control of Paramount, Skydance and New Paramount. There can be no assurance that the prospective results and synergies reflected in any of such unaudited prospective financial information will be realized or that actual results will not materially vary from such projections. In addition, such unaudited prospective financial information covers multiple years and such information by its nature becomes less predictive with each successive year. The failure of the prospective results or synergies reflected in any of such unaudited prospective financial information to be realized or any deviation of actual results may adversely affect the financial condition of New Paramount and, therefore, the market price of New Paramount common stock following completion of the Transactions.

Additionally, under the Transaction Agreement, the Skydance Merger Consideration is a fixed number of shares of New Paramount Class B common stock, to be allocated to members of Skydance in accordance with the Skydance LLC Agreement. The consideration to be paid to members of Skydance under the Transaction Agreement is therefore fixed and will not be adjusted prior to completion of the Transactions for changes in the businesses, operations, results and prospects of Paramount, New Paramount or Skydance, including any changes in the value of Skydance, which may result from a variety of factors, including changes in the business, results of operations or prospects of Skydance, regulatory considerations and general business, market, industry or economic conditions, which may or may not be within the control of Paramount or Skydance. Such changes may affect the market value of the common stock of Paramount or New Paramount or the anticipated benefits to Paramount of the Transactions.

The unaudited pro forma condensed combined financial statements included herein are presented for illustrative purposes only and may not be an indication of New Paramount’s financial condition or results of operations in the future.

The unaudited pro forma condensed combined financial statements included herein are presented for illustrative purposes only and are not intended to indicate, and are not necessarily indicative of, what New Paramount’s actual financial condition or results of operations would have been had the Transactions and the NAI Transaction been completed on the date indicated, nor are they necessarily indicative of the financial condition or results of operations that may be expected for any future period or date. The historical information about Skydance herein refers to its businesses as such businesses have been operated independently and privately. New Paramount’s pro forma financial information included herein is derived from the consolidated financial statements and accounting records of Paramount and Skydance. Additionally, the pro forma adjustments to adjust Paramount’s assets and liabilities to the basis of Ultimate Parent (as defined herein) are based on preliminary estimates of fair value on the basis of information available to Paramount as of the date of this information statement/prospectus. The fair value amounts assumed herein may differ materially based on market factors at the completion of the NAI Transaction, including the closing stock price of Paramount Class B common stock, and upon the finalization of appraisals and other valuation analyses, which is expected no later

 

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than one year from the date the Transactions are completed. Accordingly, the pro forma financial information included herein does not necessarily reflect the financial condition or results of operations that New Paramount would have achieved as a publicly traded company during the periods presented or those that it will achieve in the future, and such information should not be relied upon as an indicator of future performance, financial condition or liquidity.

Further, the pro forma financial information does not give effect to, among other things, revenue synergies, operating efficiencies or cost savings that may be achieved with respect to the combined company, as well as future acquisitions or disposals not yet known or probable, including those that may be required by regulatory or governmental authorities in connection with the Transactions or impacts of merger-related change in control provisions that are currently not factually supportable and/or probable of occurring, and other factors that may affect New Paramount’s financial condition or results of operations. New Paramount’s actual results and financial condition after the pro forma events occur may differ materially and adversely from the assumptions within the unaudited pro forma information included in this information statement/prospectus.

New Paramount will have a significant amount of indebtedness and may need to incur more in the future, which could adversely affect its business.

Even though the PIPE Transactions will result in $1.5 billion to $3.0 billion of cash being funded to the New Paramount balance sheet (prior to giving effect to the subscription discount), New Paramount and its subsidiaries will have a significant amount of indebtedness following the completion of the Transactions and may need to incur more in the future. As of June 30, 2024, Paramount had $15.1 billion of unsecured notes and debentures outstanding, the significant majority of which amount is expected to remain outstanding following the Closing, and an unsecured credit facility with $3.5 billion of revolving loan capacity. In addition, in connection with executing its business strategies following the Closing, New Paramount may determine to make additional acquisitions and other strategic investments, and it may elect to finance these endeavors by incurring additional indebtedness. In connection therewith, New Paramount may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements. In March 2024, S&P downgraded Paramount’s credit rating to BB+, which is a below-investment grade rating. Moody’s and Fitch currently assign investment grade credit ratings to Paramount; however, in July 2024, Moody’s put Paramount on a negative credit watch. If the S&P credit rating remains below investment grade or if other ratings agencies downgrade Paramount to a below-investment grade rating, Paramount may not be able to issue debt on as attractive terms as it did as an investment grade issuer. Among other things, Paramount or New Paramount may be required, in connection with issuing new bonds, to agree to additional covenants that Paramount has not been required to agree to in the past as an investment grade issuer. The financing costs and interest expense that Paramount or New Paramount may be required to pay on such indebtedness will likely be higher than they would have been if Paramount had remained investment grade rated.

This significant amount of indebtedness could:

 

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require New Paramount to dedicate a substantial portion of its cash flow from operations to payments on its indebtedness, thereby reducing funds available for working capital, capital expenditures or other purposes;

 

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increase New Paramount’s vulnerability to adverse economic and industry conditions, which could lead to a downgrade in its credit rating and may place it at a disadvantage compared to competitors who may have proportionally less indebtedness;

 

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increase New Paramount’s cost of borrowing and cause it to incur substantial fees from time to time in connection with debt amendments or refinancings; and

 

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limit New Paramount’s ability to obtain necessary additional financing for working capital, capital expenditures or other purposes in the future, plan for or react to changes in its business and the industries in which it operates, make future acquisitions or pursue other business opportunities, and react in an extended economic downturn.

 

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The terms of such indebtedness may impose material restrictions on New Paramount. These restrictions, subject in certain cases to ordinary course of business and other exceptions, may limit New Paramount’s ability to engage in some transactions, including the following:

 

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selling assets, properties or licenses;

 

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creating liens on assets;

 

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entering into sale and lease-back transactions;

 

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undergoing a change in control;

 

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merging, consolidating or disposing of all or substantially all of New Paramount’s assets;

 

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entering into transactions with affiliates; and

 

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placing restrictions on the ability of subsidiaries to pay dividends or make other payments, or with respect to subsidiaries other than Paramount, to incur debt.

Any of these restrictions on New Paramount’s ability to operate its business in its discretion could adversely affect its business by, among other things, limiting New Paramount’s ability to adapt to changing economic, financial or industry conditions and to take advantage of corporate opportunities, including opportunities to obtain debt financing, repurchase stock, refinance or pay principal on its outstanding debt or complete acquisitions for cash or debt.

Paramount has senior notes and debentures and junior subordinated debentures outstanding, in an aggregate principal amount of approximately $15 billion as of June 30, 2024. The majority of these bonds contain change of control provisions that may require Paramount, under certain circumstances, to make an offer to purchase such bonds, or increase the applicable interest rate thereon, as specified in the relevant bonds or governing indentures (as such indentures are amended from time to time), the terms of which are publicly available. Although Paramount believes this is unlikely to occur, if the change of control provisions were to be triggered with respect to a material amount of these bonds, it could have a material adverse effect on New Paramount’s business, financial condition and results of operations.

Moreover, New Paramount may be required to raise substantial additional capital to execute its business strategy. New Paramount’s ability to arrange additional financing will depend on, among other factors, its financial condition and performance, as well as prevailing market conditions and other factors beyond its control. If New Paramount is unable to obtain additional financing, its credit ratings could be further adversely affected, which could further raise its borrowing costs and further limit its future access to capital and its ability to satisfy its obligations under its indebtedness.

Failures to comply with or changes in U.S. or foreign laws or regulations may have an adverse effect on New Paramount’s business, financial condition or results of operations.

New Paramount will be subject to a variety of laws and regulations, both in the United States and/or in the foreign jurisdictions in which New Paramount or its partners operate, including laws and regulations relating to intellectual property, content regulation, privacy, data protection, anticorruption, repatriation of profits, tax regimes, quotas, tariffs or other trade barriers, currency exchange controls, operating license and permit requirements, restrictions on foreign ownership or investment, anticompetitive conduct, export and market access restrictions.

The broadcast and cable industries in the United States are highly regulated by U.S. federal laws and regulations issued and administered by various federal agencies, including the FCC, as well as by state and local governments, in ways that will affect the daily conduct of New Paramount’s broadcasting operations and programming units. For example, New Paramount is required to obtain licenses from the FCC to operate its television stations and periodically renew them. It cannot be assured that the FCC will approve its future renewal applications or that the renewals will be for full terms or will not include conditions or qualifications. The nonrenewal, or renewal with substantial conditions or modifications, of one or more of New Paramount’s licenses

 

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could have a material adverse effect on its business, financial condition and results of operations. New Paramount must also comply with extensive FCC limits on the ownership and operation of its television stations and the CBS Television Network, which could restrict New Paramount’s ability to consummate future transactions and in certain circumstances could require New Paramount to divest some television stations. Other legal and regulatory obligations to which New Paramount will be subject include requirements related to closed captioning of programming for the hearing impaired and audio descriptions of programming for the visually impaired, limitations on the amount and content of commercial matter that may be shown during programming aimed primarily at audiences of children aged 12 and under, and requirements related to the identification of sponsors of political advertising. New Paramount cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad. In the United States, the policies and priorities of any incoming presidential administration in the United States are unknown and could materially impact the regulatory framework that will govern New Paramount.

New Paramount’s businesses could be adversely affected by new laws and regulations, changes in existing laws, changes in the interpretation or enforcement of existing laws by courts and regulators and the threat that additional laws or regulations may be forthcoming, as well as New Paramount’s ability to enforce its legal rights. The U.S. Congress and the FCC currently are considering, and in the future may adopt, new laws and regulations that could, directly or indirectly, impact New Paramount’s broadcasting operations and programming units. New Paramount could be required to change or limit certain of its business practices, which could impact its ability to generate revenues. New Paramount could also incur substantial costs to comply with new and existing laws and regulations, or face substantial fines and penalties or other liabilities, or be subjected to increased scrutiny from regulators and stakeholders, if New Paramount fails to comply with such laws and regulations.

New Paramount may share control in joint ventures and other investments, which would limit its ability to manage third-party risks associated with these arrangements.

New Paramount may participate in joint ventures and other non-controlling investments in the future. In these joint ventures and investments, New Paramount may have shared or limited control over the operation of the assets and businesses. Accordingly, New Paramount may be unable to act without the approval of its partners, or its partners could take binding actions without its consent. Such joint ventures and investments may also involve risks such as the possibility that a partner in a joint venture or investment might become bankrupt, be unable to meet its capital contribution obligations, have economic or business interests or goals that are inconsistent with New Paramount’s business interests or goals, or take actions that are contrary to New Paramount’s instructions or to applicable laws and regulations. In addition, the joint ventures and other investments may have intellectual property rights, access to certain creators or preferential access to certain rights that may be renegotiated or that may terminate or expire, any of which could have an adverse effect on the business, financial condition and results of operations of such joint ventures and other investments. Consequently, actions by a partner or other third party could expose New Paramount to claims for damages, financial penalties, additional capital contributions or reputational harm, any of which could have an adverse effect on its business, financial condition and results of operations. Preparing New Paramount’s financial statements will require it to have access to information regarding the results of operations, financial condition and cash flows of its joint ventures and other investments. If New Paramount’s joint ventures and other investments do not provide this information for any meaningful period or fail to meet expected deadlines, New Paramount may be unable to satisfy its financial reporting obligations or timely file its periodic reports.

Increasing scrutiny of, and evolving expectations for, sustainability and environmental, social and governance initiatives could increase New Paramount’s costs, harm its reputation, or otherwise adversely impact its business.

New Paramount, as with other companies, may face increasing scrutiny related to its environmental, social and governance (“ESG”) practices and disclosures from certain investors, capital providers, shareholder advocacy groups, other market participants, customers and other stakeholder groups. With this increased focus, public reporting regarding ESG practices is becoming more broadly expected. While New Paramount may at

 

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times engage in voluntary initiatives, such initiatives may be costly and may not have the desired effect. For example, New Paramount may not ultimately be able to achieve any initiatives or commitments it undertakes due to cost, technological constraints, or other factors outside of its control. Moreover, actions that New Paramount may take, or statements it may make, based on expectations or assumptions that it believes to be reasonable at the time made may subsequently be determined to be erroneous or subject to misinterpretation. If New Paramount’s ESG practices and reporting do not meet investor, consumer, employee or other stakeholder expectations, which continue to evolve, its business, brand or reputation may be negatively impacted and subject to investor or regulator engagement regarding such matters. Furthermore, some market participants, including major institutional investors, may also use third-party benchmarks or scores to measure New Paramount’s ESG practices in making investment and voting decisions.

In addition, new sustainability rules and regulations have been adopted and may continue to be introduced in various states and other jurisdictions. Operating in more than one jurisdiction may make New Paramount’s compliance with any applicable ESG and sustainability-related rules more complex and expensive, and potentially expose it to greater levels of legal risks associated with its compliance. New Paramount’s failure to comply with any applicable rules or regulations could lead to penalties and adversely impact its reputation, customer attraction and retention, access to capital and employee retention. Such ESG matters may also cause additional impacts on New Paramount’s business, financial condition or results of operations.

The Transactions may not be accretive and may cause dilution to the earnings per share of New Paramount, which may negatively affect the market price of the New Paramount Class B common stock.

The issuance of shares of New Paramount Class B common stock as part of the Transactions could have the effect of depressing the market price of the New Paramount Class B common stock. In addition, Paramount (or New Paramount after the Transactions) could encounter other transaction-related costs or effects, such as the failure to realize all of the benefits anticipated in the Transactions which could cause dilution to New Paramount’s earnings per share or decrease or delay the expected accretive effect of the Transactions and cause a decrease in the market price of the New Paramount Class B common stock. However, factors decreasing the market price of Paramount Class A common stock and Paramount Class B common stock may not cause the same or similar decreases in the market price of New Paramount Class B common stock. See the risk factor below entitled “—The market price for shares of New Paramount Class B common stock following the completion of the Transactions may be affected by factors different from, or in addition to, those that have historically affected or currently affect the market price for shares of Paramount Class A common stock and Paramount Class B common stock” beginning on page 79 of this information statement/prospectus. For further information regarding potential dilution to the earnings per share of New Paramount, see the section entitled “New Paramount Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 237 of this information statement/prospectus.

Changes and uncertainties with respect to taxes in the jurisdictions in which New Paramount will operate may have an adverse effect on New Paramount’s business, financial condition or results of operations.

New Paramount and its subsidiaries will conduct business globally and be subject to tax in multiple U.S. federal, state and local and non-U.S. jurisdictions. New Paramount’s tax position could be materially adversely affected by several factors, including: new or changing tax laws both domestically and internationally, including regulations and treaties, or the interpretation thereof, tax policy initiatives and reforms under consideration by the international community (such as those related to the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting Project, the European Commission’s state aid investigations and other initiatives), the practices of tax authorities in jurisdictions in which New Paramount operates, and the resolution of issues arising from tax audits, examinations or assessments and any related interest or penalties. New Paramount is currently unable to predict whether such changes or events will occur and, if so, the ultimate impact on New Paramount’s business. To the extent that any such changes or events have a negative impact on New Paramount, including as a result of related uncertainty, New Paramount’s business, financial condition and results of operations may be adversely impacted.

 

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Risks Relating to New Paramount’s Organization and Structure

Entities controlled by the Ellison family will control New Paramount. The interests of the Ellison family may differ from the interests of other stockholders of New Paramount.

NAI, through its direct and indirect ownership of Paramount Class A common stock, has voting control of Paramount. Upon the completion of the Transactions, entities controlled by the Ellison family will collectively own approximately 77.5% of NAI. As a result, such entities, through their indirect ownership of New Paramount Class A common stock, will have voting control of New Paramount and will indirectly own approximately 77.5% of the shares of New Paramount’s voting Class A common stock outstanding. Through their approximately 77.5% collective ownership interest in NAI and as a result of the PIPE Transaction and the Skydance Merger, entities controlled by the Ellison family are also expected to directly and indirectly own approximately 48% of the shares of New Paramount’s non-voting Class B common stock outstanding assuming public stockholders elect to receive the maximum cash consideration in the Mergers. In addition, entities controlled by the Ellison family will have voting control of the New Paramount Board and David Ellison will initially serve as the Chair and Chief Executive Officer of New Paramount upon the Closing. This control will provide the Ellison family significant influence over the daily operations and internal functions of New Paramount.

Under the terms of the Transaction Agreement and the A&R Charter, the New Paramount Board will consist of up to 13 members designated by Skydance prior to the Closing, including David Ellison, and, if requested by Shari E. Redstone and Tyler Korff prior to the Closing, each of Shari E. Redstone and/or Tyler Korff. Additionally, the Governance Agreement, which provides, among other things, that NAI will not take any action which would result in the Paramount Board or the compensation or nominating and governance committees of the Paramount Board being comprised of less than a majority of independent directors, will be terminated as of the Closing. Following the Closing, New Paramount will be a “controlled company” for purposes of Nasdaq rules, and, therefore, New Paramount will be exempt from certain corporate governance requirements, and it is expected that a majority of New Paramount directors will not be “independent” within the meaning of Nasdaq rules. See the risk factor entitled “—New Paramount will be exempt from certain corporate governance requirements since it will be a ‘controlled company’ within the meaning of Nasdaq rules, and as a result its stockholders will not have the protections afforded by these corporate governance requirements” beginning on page 76 of this information statement/prospectus. For further information regarding the New Paramount Board and its committees following the Closing, see the section entitled “Management and Directors of New Paramount After Completion of the Transactions” and “Comparison of Stockholder Rights” beginning on pages 258 and 296, respectively, of this information statement/prospectus.

As a result, entities controlled by the Ellison family will have the ability to control New Paramount, including the ability to control any action requiring the general approval of its stockholders, the designation or removal of certain members to the New Paramount Board, the ability to control any action requiring the general approval of the New Paramount Board, the adoption of amendments to the A&R Charter and the A&R Bylaws and any major corporate transaction requiring stockholder approval, including change of control transactions, as further described in the sections entitled “Management and Directors of New Paramount After Completion of the Transactions” and “Comparison of Stockholder Rights” beginning on pages 258 and 296, respectively, of this information statement/prospectus. This concentration of ownership and voting power may also delay, defer or even prevent an acquisition by a third party or other change of control of New Paramount, and may make some transactions more difficult or impossible without the support of the Ellison family, even if such events are in the best interests of other stockholders. This concentration of voting power may have a negative impact on the trading price of New Paramount Class B common stock.

The interests of the Ellison family may not be fully aligned with the interests of the holders of New Paramount Class B common stock, which could lead to actions that are not in the best interest of holders of New Paramount Class B common stock because stockholders who only hold New Paramount Class B common stock will have no voting rights to affect the corporate actions of New Paramount. In addition, the Ellison family’s ability to effectively control New Paramount may discourage someone from making a significant equity

 

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investment in New Paramount, or could discourage transactions involving a change in control, including transactions in which holders of shares of New Paramount Class B common stock might otherwise receive a premium for their shares over the then-current market price.

Section 203 of the DGCL (“Section 203”) may affect the ability of an “interested stockholder” to engage in certain business combinations, including mergers, consolidations or acquisitions of additional shares, for a period of three years following the time that the stockholder becomes an “interested stockholder.” An “interested stockholder” is defined to include persons owning directly or indirectly 15% or more of the outstanding voting stock of a corporation. New Paramount will elect in the A&R Charter to not be subject to Section 203. The PIPE Equity Investors and their respective affiliates and direct and indirect transferees will not be deemed to be “interested stockholders,” regardless of the percentage of New Paramount voting stock owned by them, and accordingly will not be subject to such restrictions.

The A&R Charter will provide that, to the fullest extent permitted by law, New Paramount renounces any interest or expectancy in a transaction or matter that may be a corporate opportunity for New Paramount, and the Identified Persons (as defined herein) have no duty to present such corporate opportunity to New Paramount and they may invest in competing businesses or do business with New Paramount’s clients, customers or suppliers. To the extent that the Identified Persons invest in other businesses, they may have differing interests than New Paramount’s other stockholders. In addition, subject to the restrictions set forth in the A&R Charter, New Paramount may in the future partner with or enter into transactions with existing investors or their affiliates, including with respect to future investments, acquisitions, and dispositions.

New Paramount cannot predict the impact its capital structure and the concentrated control by the NAI Equity Investors may have on its stock price or its business.

New Paramount cannot predict whether its dual share class capital structure, combined with the concentrated control of New Paramount by entities controlled by the Ellison family, will result in a lower trading price or greater fluctuations in the trading price of the New Paramount Class B common stock or have other adverse consequences or additional costs. In addition, some stock indices have in the past excluded companies with multiple share classes from their membership and may decide to do so again in the future.

If the entities controlled by the Ellison family sell a controlling interest in New Paramount to a third party in a private transaction, New Paramount stockholders may not realize any change of control premium on shares of New Paramount Class B common stock and New Paramount may become subject to the control of a presently unknown third party.

Following the completion of the Transactions, entities controlled by the Ellison family will indirectly own a controlling interest in New Paramount. Subject to other agreements described herein, the entities controlled by the Ellison family will have the ability, should they choose to do so, to sell, or cause the sale of, some or all of the shares of New Paramount common stock held directly and indirectly by them in a privately negotiated transaction, which, if sufficient in size, could result in a change of control of New Paramount. Further, the distribution or sale, directly or indirectly, by the NAI Equity Investors of a substantial number of shares after the Transactions, even if not a controlling interest, or a perception that a distribution or such sales could occur, could significantly reduce the market price of New Paramount Class B common stock.

Subject to the other agreements described herein, the ability of the NAI Equity Investors to, directly or indirectly, privately sell shares of New Paramount common stock, with no requirement for a concurrent offer to be made to acquire all of the outstanding shares of New Paramount Class B common stock, could prevent New Paramount stockholders from realizing any change of control premium on their shares of New Paramount Class B common stock that may otherwise accrue to the NAI Equity Investors on a private sale of New Paramount common stock. Additionally, if the entities controlled by the Ellison family, directly or indirectly,

 

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privately sell a controlling interest in New Paramount, New Paramount may become subject to the control of a presently unknown third party. Such third party may have conflicts of interest with those of other stockholders. In addition, if the entities controlled by the Ellison family sell a controlling interest in New Paramount to a third party, future indebtedness of New Paramount may be subject to acceleration and New Paramount’s other commercial agreements and relationships could be impacted, all of which may adversely affect New Paramount’s ability to run its business as described herein and may have an adverse effect on its operating results and financial condition.

New Paramount will be exempt from certain corporate governance requirements since it will be a “controlled company” within the meaning of Nasdaq rules, and as a result its stockholders will not have the protections afforded by these corporate governance requirements.

Following the consummation of the Transactions, NAI and its applicable subsidiaries will control 100% of New Paramount’s combined voting power for the election of the New Paramount Board. As a result, New Paramount will be considered a “controlled company” for the purposes of Nasdaq listing standards, and, therefore, New Paramount will be permitted to, and intends to, elect not to comply with certain corporate governance requirements of Nasdaq, including the requirements that a majority of the New Paramount Board consists of “independent directors,” as defined under the rules of Nasdaq, and that the New Paramount Board has a compensation committee composed entirely of independent directors. For so long as New Paramount remains a “controlled company,” it may at any time and from time to time, utilize any or all of the applicable governance exemptions available under Nasdaq rules to controlled companies. Accordingly, holders of New Paramount common stock will not have the same protections afforded to stockholders of companies that are subject to all of Nasdaq’s rules and corporate governance standards, and the ability of New Paramount’s independent directors to influence its business policies and affairs may be reduced. New Paramount expects to remain a controlled company until the Ellison family or NAI and its applicable subsidiaries no longer control, including indirectly, more than 50% of New Paramount’s combined voting power. Additionally, New Paramount will have twelve months from the date it ceases to be a “controlled company” to have a majority of independent directors on the New Paramount Board.

Furthermore, the Governance Agreement that is currently in effect provides, among other things, that NAI will not take any action that would result in the Paramount Board or the compensation or nominating and governance committees of Paramount being comprised of less than a majority of independent directors. Effective as of immediately prior to the Closing, the Governance Agreement will be terminated, thereby terminating NAI’s obligation to maintain a board of Paramount comprised of a majority of independent directors.

For further information regarding the composition of the New Paramount Board and its committees following the Closing, see the section entitled “Management and Directors of New Paramount After Completion of the Transactions” beginning on page 258 of this information statement/prospectus.

If New Paramount is unable to effectively implement or maintain a system of internal control over financial reporting, it may not be able to accurately or timely report its financial results and its stock price could be adversely affected.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), New Paramount will be required to furnish a report by its management on its internal control over financial reporting, including an attestation report on internal control over financial reporting issued by its independent registered public accounting firm. While Paramount has historically furnished this report, as a private company, Skydance has not been subject to the information and reporting requirements of the Sarbanes-Oxley Act. Therefore, to bring New Paramount into compliance with Section 404 of the Sarbanes-Oxley Act, New Paramount will be engaged in a process to document and evaluate internal controls for Skydance which is both costly and challenging. New Paramount will need to dedicate internal resources, potentially engage outside consultants, adopt a detailed work plan to establish and document internal controls for Skydance, validate through testing that controls are

 

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functioning as documented and integrate Skydance into the continuous reporting and improvement process for internal control over financial reporting already established at Paramount. The completion of the Transactions described in this information statement/prospectus and the subsequent integration of Skydance into Paramount’s accounting and operations may make it more difficult for New Paramount to comply with Section 404 of the Sarbanes-Oxley Act. Despite New Paramount’s efforts, there is a risk that neither it nor its independent registered public accounting firm will be able to conclude that its internal control over financial reporting is effective as required by Section 404 of the Sarbanes-Oxley Act. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of New Paramount’s financial statements. New Paramount could also become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources. Additionally, any deficiencies in New Paramount’s internal control over financial reporting may affect its ability to report its financial results accurately or to prevent or detect fraud. Such deficiencies also could result in restatements of, or other adjustments to, New Paramount’s previously reported or announced operating results, which could diminish investor confidence and reduce the market price for New Paramount’s common stock.

Anti-takeover provisions contained in the A&R Charter and the A&R Bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

Provisions of the A&R Charter and the A&R Bylaws, in addition to those relating to the voting rights of the New Paramount common stock, may have the effect of delaying, deferring or preventing a change in control of New Paramount or changes in New Paramount’s management. These include provisions that:

 

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authorize the New Paramount Board to provide for the issuance, without stockholder approval, of up to 100 million shares of preferred stock with rights, powers and preferences fixed by the New Paramount Board (subject to certain limitations set forth in the A&R Charter), which rights, powers and preferences could be senior to those of the New Paramount common stock;

 

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provide that each director of New Paramount (except for the Ellison Designees (as defined in the A&R Charter), but including any Low-Vote Designee (as defined in the A&R Charter)) will be entitled to one vote for so long as Ellison (as defined in the A&R Charter) holds an Original Ownership Percentage (as defined in the A&R Charter) of at least 50%; provided that each Ellison Designee (which will not include any Low-Vote Designee) will have a number of votes on any matter presented to the New Paramount Board or any committee thereof equal to one more than the total number of directors of the whole New Paramount Board or committee thereof, as applicable;

 

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provide that each Specified Stockholder (as defined in the A&R Charter) will have the exclusive right to (i) remove at any time, with or without cause, its respective designee from the New Paramount Board and (ii) subject to the rights of holders of any series of New Paramount preferred stock, fill any vacancy created at any time by the death, removal, disqualification or resignation of any director designated by such Specified Stockholder (as defined in the A&R Charter) with a new designee;

 

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provide that a special meeting of New Paramount stockholders may be called only by or at the direction of (i) the New Paramount Board, (ii) by the Chair, (iii) by the chief executive officer of New Paramount or (iv) by any holder of at least 25% of the aggregate voting power of all outstanding shares of the capital stock of New Paramount; and

 

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establish advance notice procedures for New Paramount stockholders to make nominations of candidates for election as directors or to present any other proposal to be acted upon at any annual or special meeting of New Paramount stockholders.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in New Paramount’s management and reduce the price that investors might be willing to pay for shares of New Paramount Class B common stock in the future, which could reduce the market price of the New Paramount Class B common stock. See the section entitled “Description of New Paramount’s Capital Stock” beginning on page 286 of this information statement/prospectus.

 

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New Paramount will elect in the A&R Charter not to be subject to Section 203 of the DGCL. Subject to specified exemptions, Section 203 of the DGCL prohibits a Delaware corporation listed on a national securities exchange from engaging in a “business combination,” including mergers, consolidations, sales and leases of assets, issuances of securities and other similar transactions, with an interested stockholder (generally, a person that, together with its affiliates and associates, owns 15% or more of the corporation’s voting stock) for a period of three years after the date of the transaction in which the person became an interested stockholder. As a result of New Paramount’s election in the A&R Charter to not be subject to Section 203 of the DGCL, such restrictions on business combinations under Section 203 of the DGCL will not be applicable to New Paramount following the consummation of the Transactions.

The provisions of the A&R Charter requiring exclusive venue in the Court of Chancery of the State of Delaware for certain types of lawsuits and the federal district courts of the United States for the resolution of any complaint asserting a cause of action under the Securities Act may have the effect of discouraging lawsuits against New Paramount’s directors and officers.

The A&R Charter will provide that unless the New Paramount Board consents in writing to the selection of an alternative forum, (A) the Court of Chancery of the State of Delaware be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of New Paramount, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee, agent or stockholder of New Paramount to New Paramount or to the New Paramount stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, the A&R Charter or the A&R Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) any action asserting a claim governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein or, if such court does not have subject matter jurisdiction thereof, the federal district court located in the State of Delaware; and (B) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act. Notwithstanding the foregoing, the exclusive forum provision shall not apply to claims seeking to enforce any liability or duty created by the Exchange Act. Although New Paramount believes this provision benefits it by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against its directors and officers. It is possible that, in connection with any applicable action brought against New Paramount, a court could find the choice of forum provisions contained in the A&R Charter to be inapplicable or unenforceable in such action. If a court were to find the choice of forum provisions contained in the A&R Charter to be inapplicable or unenforceable in an action, New Paramount may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect its business, financial condition or results of operations.

The competitive opportunity provisions in the A&R Charter could enable certain directors, principals, officers, employees, members and/or other representatives of the PIPE Equity Investors or their respective affiliates to benefit from competitive opportunities that might otherwise be available to New Paramount.

The A&R Charter will provide that, to the fullest extent permitted by law, New Paramount renounces any interest or expectancy in a transaction or matter that may be a competitive opportunity for certain directors, principals, officers, employees, members, equityholders and/or other representatives of the PIPE Equity Investors or their respective affiliates (the “Identified Persons”) (other than any such Identified Person in his or her capacity as a director of New Paramount), and such Identified Persons have no duty to refrain from directly or indirectly (i) participating or otherwise engaging in any competitive opportunity, (ii) otherwise competing with New Paramount or any of its controlled affiliates, (iii) otherwise doing business or transacting with any potential or actual customer, supplier or other business relation of New Paramount or any of its controlled affiliates or (iv) otherwise employing or engaging any officer, employee or other service provider of New Paramount or any of its controlled affiliates. In addition, the Identified Persons have no duty to present any such competitive opportunity to New Paramount. To the extent that any Identified Person engages in any of the foregoing actions,

 

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they may have differing interests than New Paramount’s other stockholders. For a more complete description of the terms of the A&R Charter, see the section entitled “Comparison of Stockholder Rights” beginning on page 296 of this information statement/prospectus.

New Paramount will be a holding company, and its principal assets will be equity interests in Paramount and Skydance and, accordingly, New Paramount will be dependent upon distributions from Paramount and/or Skydance to pay taxes and other expenses.

New Paramount will be a holding company, and its principal assets will be its ownership interests of Paramount and Skydance. New Paramount will not have independent means of generating revenue. Each of New Paramount’s subsidiaries following the Closing, including each of Paramount and Skydance, will be a distinct legal entity, and under certain circumstances legal and contractual restrictions may limit New Paramount’s ability to obtain cash from such subsidiaries. In the future, it is possible that lack of cash flow from operating activities could impact New Paramount’s ability to fund its debt service obligations. The deterioration of the earnings from, or other available assets of, New Paramount’s subsidiaries for any reason could also limit or impair such subsidiaries’ ability to pay dividends or other distributions to New Paramount.

Risks Relating to New Paramount Common Stock

No trading market currently exists for New Paramount Class B common stock.

Prior to the completion of the Transactions, there will be no market for New Paramount Class B common stock. Upon completion of the Transactions, shares of New Paramount Class B common stock are expected to be listed for trading on Nasdaq. However, there can be no assurance that an active market for New Paramount Class B common stock will develop after the Transactions are completed, or that if it develops, the market will be sustained. The liquidity of New Paramount Class B common stock may also be affected depending upon the number of shares of Paramount Class A common stock or Paramount Class B common stock exchanged for cash and whether the New Paramount Class B common stock is freely tradable without restriction under the Securities Act. See the risk factor entitled “—Risks Relating to New Paramount After Completion of the Transactions—Risks Relating to New Paramount Common Stock—Future sales of New Paramount Class B common stock, or the perception in the public markets that these sales may occur, may depress the price of New Paramount Class B common stock” beginning on page 81 of this information statement/prospectus.

The market price for shares of New Paramount Class B common stock following the completion of the Transactions may be affected by factors different from, or in addition to, those that have historically affected or currently affect the market price for shares of Paramount Class A common stock and Paramount Class B common stock.

Upon completion of the Transactions, certain holders of Paramount Class A common stock and holders of Paramount Class B common stock will become holders of New Paramount Class B common stock. As a result of the Transactions, the business, financial condition and results of operations of New Paramount will be affected by factors that are different from those currently affecting the business, financial condition or results of operations of Paramount. Accordingly, the market price and performance of New Paramount Class B common stock is likely to be different from the market price and performance of the Paramount Class A common stock and Paramount Class B common stock in the absence of the Transactions. Factors that caused a fluctuation in the market price of Paramount Class B common stock may not cause the same or similar fluctuations in the market price for shares of New Paramount Class B common stock following completion of the Transactions. In addition, general fluctuations in stock markets could have a material adverse effect on the market for, or liquidity of, New Paramount Class B common stock, regardless of New Paramount’s actual operating performance. For a discussion of Paramount’s business and of certain risk factors to consider in connection therewith, see Paramount’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 28, 2024, and its subsequently filed Quarterly Reports on Form 10-Q, each of which is incorporated by reference into this information statement/prospectus as described in the section entitled “Where You Can Find

 

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More Information” beginning on page 316 of this information statement/prospectus. For a discussion of the business of Skydance and of certain risk factors to consider in connection therewith, see the risk factors included under the sections entitled “Risks Relating to Skydance’s Business” and “Risks Relating to New Paramount After Completion of the Transactions” beginning on pages 56 and 67, respectively, of this information statement/prospectus.

The shares of New Paramount Class B common stock to be received by the Paramount stockholders in connection with the Transactions will have rights that are different from the rights of shares of Paramount Class A common stock and Paramount Class B common stock.

Following completion of the Transactions, Paramount stockholders will no longer be Paramount stockholders but will instead be New Paramount stockholders whose rights as stockholders of New Paramount will be governed by the A&R Charter and the A&R Bylaws and by Delaware law. Furthermore, the shares of New Paramount Class B common stock to be received by holders of Paramount Class A common stock are shares of non-voting common stock in New Paramount. There will be important differences between the current rights of a Paramount stockholder and the rights of a New Paramount stockholder. For further information, see the section entitled “Comparison of Stockholder Rights” beginning on page 296 in this information statement/prospectus.

Declaration, payment and amounts of dividends, if any, to holders of shares of New Paramount Class B common stock will be uncertain and are not guaranteed.

Whether any dividends are declared and paid to New Paramount stockholders following the Closing, and the amounts of any dividends that are declared or paid, are uncertain and are not guaranteed. If dividends are declared, they may not be of the same amount as paid by Paramount to its stockholders prior to the Closing.

Following the completion of the Transactions and the listing of the New Paramount Class B common stock on Nasdaq, the New Paramount Board will be permitted to declare, set a record date for and pay a dividend on shares of New Paramount Class A common stock and New Paramount Class B common stock.

However, the amount of dividends, if any, that are declared or paid to New Paramount stockholders cannot yet be determined and will depend on a number of factors. The New Paramount Board will have sole discretion to determine whether any dividends will be declared, when dividends, if any, are declared, and the amount of such dividends.

Such determination would be based on a number of considerations, including, but not limited to, New Paramount’s results of operations and capital management plans, the market price of New Paramount Class B common stock, the availability of funds to New Paramount, industry practice and other factors deemed relevant by the New Paramount Board. In addition, New Paramount’s ability to pay dividends and the amount of any dividends ultimately paid in respect of the New Paramount common stock will, in each case, be subject to New Paramount receiving funds, directly or indirectly, from its operating subsidiaries, including, but not limited to, Paramount and Skydance.

For these and other reasons generally affecting the ability to pay dividends, you should be aware that New Paramount stockholders may not receive the same or similar dividends following the consummation of the Transactions as they may have received prior to the consummation of the Transactions.

The market price for shares of New Paramount Class B common stock may decline as a result of the Transactions failing to meet expectations and as a result of New Paramount stockholders adjusting their portfolios.

Following the completion of the Transactions, the market price of New Paramount Class B common stock may decline for a variety of reasons, including if, among other things, the Transactions do not achieve their expected benefits, or if New Paramount does not achieve the expected benefits of the Transactions as rapidly or

 

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to the extent anticipated by financial or industry analysts. The market price of New Paramount Class B common stock may also decline if the effect of the Transactions on New Paramount’s financial condition, results of operations or cash flows is not consistent with the expectations of financial or industry analysts.

Based on the number of shares of Paramount common stock outstanding as of [   ], 2024, which was the latest practicable date before the printing of this information statement/prospectus, and assuming that all holders of Paramount Class A common stock make a cash election and that holders of Paramount Class B common stock make cash elections equal to the Maximum Class B Cash Share Number, approximately [   ] shares of New Paramount Class B common stock are expected to be issued and outstanding following the completion of the Transactions. Certain Paramount stockholders may decide not to hold the shares of New Paramount Class B common stock that they receive in the Transactions. Other New Paramount stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of New Paramount Class B common stock that they receive in the Mergers. Such sales of New Paramount Class B common stock, including any such sales of New Paramount Class B common stock by the PIPE Equity Investors, could have the effect of depressing the market price for New Paramount Class B common stock and may take place promptly following the completion of the Transactions.

Future sales of New Paramount Class B common stock, or the perception in the public markets that these sales may occur, may depress the price of New Paramount Class B common stock.

Additional sales of a substantial number of shares of New Paramount Class B common stock in the public market after the Closing or the perception that such sales may occur, could have an adverse effect on New Paramount’s stock price. The New Paramount Class B common stock registered herein will be freely tradable without restriction under the Securities Act, except for any New Paramount Class B common stock that may be held or acquired by its directors, executive officers, and other affiliates (as that term is defined in the Securities Act), which will be restricted securities under the Securities Act.

Based on the number of shares of Paramount common stock outstanding as of [   ], 2024, which was the latest practicable date before the printing of this information statement/prospectus, and assuming that holders of Paramount Class A common stock make a cash election in respect of all of their shares of Paramount Class A common stock and that holders of Paramount Class B common stock make cash elections equal to the Maximum Class B Cash Share Number, upon the completion of the Transactions, New Paramount will have [   ] shares of New Paramount Class B common stock issued and outstanding. In addition, [   ] shares of New Paramount Class B common stock are eligible to be issued upon conversion from shares of Paramount Class A common stock. Of these shares of New Paramount Class B common stock issued in connection with the Transactions:

 

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[   ] shares are not subject to the resale restrictions under Rule 144; and

 

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[   ] shares are subject to the volume, manner of sale and other restrictions of Rule 144 to the extent these shares are sold pursuant to Rule 144.

Further, in connection with the PIPE Transactions, the parties thereto agreed that New Paramount will issue an aggregate of 200 million warrants, with each warrant entitling the holder thereof to subscribe for one share of New Paramount Class B common stock per warrant at an initial exercise price of $30.50 per share for a term of five years. Such warrants will be issued to the NAI Equity Investors in the PIPE Transactions. If the holders of such warrants elect to exercise any or all of the warrants, the issuance of the underlying shares of New Paramount Class B common stock will result in dilution to the percentage of shares of New Paramount Class B common stock held by other stockholders. See the risk factor entitled “—The conversion of warrants issued to the NAI Equity Investors in connection with the PIPE Transaction into shares of New Paramount Class B common stock could cause holders of New Paramount Class B common stock to be diluted and may decrease the value of such New Paramount Class B common stock as a result” beginning on page 83 of this information statement/prospectus for a discussion of the dilutive effects of the PIPE Transaction to public stockholders.

 

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Shares issuable in respect of New Paramount equity awards are expected to be registered on Form S-8 under the Securities Act. These shares will be able to be freely sold in the public market upon issuance, subject to applicable vesting requirements, compliance by affiliates with Rule 144, and other restrictions provided under the terms of the applicable plan and/or the award agreements entered into with participants. Further, New Paramount expects to maintain an equity incentive plan, under which additional shares of New Paramount Class B common stock will be reserved for future issuance. In the future, New Paramount may also issue additional securities in connection with investments, acquisitions or capital-raising activities, which could constitute a material portion of its then-outstanding shares of New Paramount Class B common stock. Any shares of New Paramount Class B common stock that it issues will have a dilutive effect on the number of outstanding shares of New Paramount Class B common stock.

Concurrently with the Closing, the PIPE Equity Investors and NAI will enter into a registration rights agreement with New Paramount that will obligate New Paramount to register the shares of New Paramount Class B common stock held by such parties, including shares of New Paramount Class B common stock issuable upon conversion of New Paramount Class A common stock, as well as those shares received as part of the PIPE Transaction, shares of New Paramount Class B common stock issuable upon the exercise of the warrants received by such holders at the Closing pursuant to the PIPE Transaction and shares of New Paramount Class B common stock received by the PIPE Equity Investors or their respective affiliates in their capacity as equityholders of Skydance in the Skydance Merger.

The price of New Paramount Class B common stock may be volatile, and the market prices of New Paramount Class B common stock may fluctuate significantly.

The market price for New Paramount Class B common stock may fluctuate significantly in response to a number of factors, most of which New Paramount cannot control, including, among others:

 

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trends and changes in consumer preferences in the industries in which New Paramount operates;

 

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changes in general economic or market conditions or trends in New Paramount’s industry or the economy as a whole and, in particular, in the consumer, entertainment and advertising marketplaces;

 

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changes in key personnel;

 

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New Paramount’s entry into new markets;

 

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changes in New Paramount’s operating performance;

 

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investors’ perceptions of New Paramount’s prospects and the prospects of the businesses in which it participates;

 

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fluctuations in quarterly revenue and operating results, as well as differences between New Paramount’s actual financial and operating results and those expected by investors;

 

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the public’s response to press releases or other public announcements by New Paramount or third parties, including New Paramount’s filings with the SEC;

 

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announcements relating to litigation;

 

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guidance, if any, that New Paramount provides to the public, any changes in such guidance or New Paramount’s failure to meet such guidance;

 

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changes in financial estimates or ratings by any securities analysts who follow New Paramount Class B common stock, New Paramount’s failure to meet such estimates or failure of those analysts to initiate or maintain coverage of the New Paramount Class B common stock;

 

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downgrades in New Paramount’s credit ratings or the credit ratings of its competitors;

 

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the development and sustainability of an active trading market for New Paramount Class B common stock;

 

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investor perceptions of the investment opportunity associated with New Paramount Class B common stock relative to other investment alternatives;

 

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•

the inclusion, exclusion or deletion of New Paramount Class B common stock from any trading indices;

 

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future sales of New Paramount Class B common stock by its officers, directors and significant stockholders;

 

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other events or factors, including those resulting from system failures and disruptions, hurricanes, pandemics, wars, acts of terrorism, other natural disasters or responses to such events;

 

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changes in financial markets or general economic conditions, including, for example, due to the effects of recession or slow economic growth in the United States and abroad, interest rates, fuel prices, international currency fluctuations, corruption, political instability, acts of war, including the conflict involving Russia and Ukraine, acts of terrorism and pandemics or other public health crises;

 

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price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; and

 

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changes in accounting principles or applicable law.

These and other factors may lower the market price of New Paramount Class B common stock, regardless of its actual operating performance. As a result, New Paramount Class B common stock may trade at prices significantly below the price at which shares were purchased.

In addition, the stock markets, including Nasdaq, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If New Paramount were to become involved in securities litigation, it could incur substantial costs and its resources and the attention of management could be diverted from its business.

If securities or industry analysts publish inaccurate or unfavorable research about New Paramount or its business, the price of the New Paramount Class B common stock and trading volume could decline.

The trading market for New Paramount Class B common stock will depend in part on the research and reports that securities or industry analysts publish about New Paramount or its business. If one or more of the analysts who cover New Paramount downgrades New Paramount Class B common stock or publishes inaccurate or unfavorable research about New Paramount or its business, New Paramount’s share price would likely decline. If one or more of these analysts cease coverage of New Paramount or fail to publish reports on New Paramount regularly, demand for New Paramount Class B common stock could decrease, which could cause New Paramount’s stock price and trading volume to decline. In addition, if New Paramount’s operating results fail to meet the expectations of securities analysts, its stock price would likely decline.

The conversion of warrants issued to the NAI Equity Investors in connection with the PIPE Transaction into shares of New Paramount Class B common stock could cause holders of New Paramount Class B common stock to be diluted and may decrease the value of such New Paramount Class B common stock as a result.

In connection with the closing of the PIPE Transaction, New Paramount has agreed to issue to the NAI Equity Investors warrants to purchase up to 200 million shares of New Paramount Class B common stock with an initial exercise price equal to $30.50 per share for a term of five years starting from the date of issuance of such warrants in connection with the Closing and exercisable at any time after the date of such issuance which may be on a cashless basis. For the length of time these warrants are outstanding and exercisable, the warrant holders will have an opportunity to profit from a rise in the market price of New Paramount’s common stock above such exercise price without assuming the risks of ownership of the New Paramount Class B common stock.

Additionally, if the holders of such warrants exercise such on a cashless basis, New Paramount will not receive cash proceeds in connection with such exercises. Any exercise of such warrants would dilute the holders of New Paramount Class B common stock.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This information statement/prospectus contains both historical and forward-looking statements, including statements related to future results, performance and achievements. All statements that are not statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe objectives, plans or goals are or may be forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results; generally can be identified by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “may,” “could,” “estimate” or other similar words or phrases; and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements. These forward-looking statements generally include statements regarding the expected timetable for completing the Transactions, the ability to complete the Transactions, expected cost and revenue synergies, impacts and benefits of the Transactions, projected financial information, future opportunities, expected cash distributions and other statements regarding New Paramount’s, Skydance’s and Paramount’s future expectations, beliefs, plans, objectives, results of operations, financial condition and cash flows, or future events or performance. These forward-looking statements are largely based on current expectations and projections about future events and financial trends that may affect New Paramount’s, Skydance’s and Paramount’s business, financial condition and results of operations.

Important risk factors that may cause such a difference include, but are not limited to: (i) that the Transactions may not be completed on anticipated terms and timing (or at all), (ii) that a condition to the Closing may not be satisfied, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals), (iii) that the anticipated tax treatment of the Transactions may not be obtained, (iv) the potential impact of unforeseen liabilities, future capital expenditures, revenues, costs, expenses, earnings, synergies, economic performance, indebtedness, financial condition and losses on the future prospects, business and management strategies for the management, expansion and growth of the combined business after the Closing, (v) potential litigation relating to the Transactions that could be instituted against Paramount, Skydance, New Paramount or any of their directors, (vi) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Transactions, (vii) any negative effects of the announcement, pendency or consummation of the Transactions, on the market price of Paramount Class A common stock or Paramount Class B common stock and on Paramount’s or Skydance’s operating results, (viii) risks associated with third-party contracts containing consent and/or other provisions that may be triggered by the Transactions, (ix) the risks and costs associated with the integration of, and the ability of Paramount and Skydance to integrate, the businesses successfully and to achieve anticipated synergies, (x) the risk that disruptions from the Transactions will harm Paramount’s and Skydance’s business, including current plans and operations or by diverting management’s attention from Paramount’s and Skydance’s ongoing business operations, (xi) the abilities of Paramount and Skydance, respectively, to retain and hire key personnel and uncertainties arising from leadership changes, (xii) legislative, regulatory and economic developments, (xiii) the risk that executive officers, directors and affiliates of Paramount and Skydance may have interests in the Transactions that are different from, or in addition to, the rights of the Paramount stockholders and Skydance equityholders, (xiv) the other risks described in Paramount’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q and (xv) management’s response to any of the aforementioned factors. There may be additional risks, uncertainties and factors that are not currently viewed as material or that are not necessarily known.

These risks, as well as those risks associated with the Transactions, are more fully discussed in the section of this information statement/prospectus entitled “Risk Factors.” While the list of factors presented here and in the section entitled “Risk Factors,” and in Paramount’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 28, 2024, Paramount’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024, as filed with the SEC on August 8, 2024, and other filings with the

 

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SEC that are incorporated by reference into this information statement/prospectus, are considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on New Paramount’s consolidated financial condition, results of operations, credit rating or liquidity. The forward-looking statements included in this information statement/prospectus are made only as of the date of this information statement/prospectus, and Paramount, Skydance and New Paramount do not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances, except as otherwise required by applicable law. For further information, see the section entitled “Where You Can Find More Information” beginning on page 316 of this information statement/prospectus.

 

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INFORMATION ABOUT PARAMOUNT, NEW PARAMOUNT AND THE MERGER SUBS

Paramount

Paramount is a leading global media, streaming and entertainment company that creates premium content and experiences for audiences worldwide. Driven by iconic consumer brands, its portfolio includes CBS, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount+ and Pluto TV. Paramount holds one of the industry’s most extensive libraries of television and film titles. In addition to offering innovative streaming services and digital video products, Paramount also provides powerful capabilities in production, distribution and advertising solutions.

Paramount Class A common stock and Paramount Class B common stock are currently listed on Nasdaq under the symbols “PARAA” and “PARA,” respectively. Paramount’s principal offices are located at 1515 Broadway, New York, NY 10036, and its telephone number is (212) 258-6000. Paramount’s internet address is paramount.com. Please note that Paramount’s internet address is included in this information statement/prospectus as an inactive textual reference only. The information contained on Paramount’s website is not incorporated by reference into this information statement/prospectus, the registration statement of which it forms a part or any future documents that may be filed with the SEC and should not be considered part of this information statement/prospectus.

New Paramount

New Paramount is a Delaware corporation and a direct, wholly-owned subsidiary of Paramount. New Paramount was incorporated on June 3, 2024 solely for the purpose of effecting the Transactions, and, immediately after the consummation of the Transactions, New Paramount will be renamed “[   ].”

Pursuant to the Transaction Agreement, (i) Paramount Merger Sub will merge with and into Paramount and (ii) Skydance Merger Sub will merge with and into Skydance. As a result of the Mergers, Paramount and Skydance will survive and become direct or indirect, wholly-owned subsidiaries of New Paramount. In connection with the Transactions, New Paramount will become a publicly traded corporation and former Paramount stockholders (other than those that receive solely cash consideration in accordance with the election procedures described in the section entitled “Summary of the Transaction Agreement—Merger Consideration; Conversion of Shares; Exchange of Certificates—Proration” beginning on page 176 of this information statement/prospectus) and former Skydance equity holders will own stock of New Paramount. New Paramount has no material assets and has not conducted any business operations other than such operations that are incidental to its formation and in connection with the Transactions. Accordingly, no financial statements of New Paramount have been included in this information statement/prospectus.

Upon completion of the Transactions, New Paramount’s principal executive offices will be located at [   ] and its telephone number will be [   ].

Paramount Merger Sub

Paramount Merger Sub is a Delaware corporation and a direct, wholly-owned subsidiary of New Paramount. Paramount Merger Sub was incorporated on June 3, 2024 solely for the purpose of effecting the Pre-Closing Paramount Merger. As a result of the Pre-Closing Paramount Merger, Paramount Merger Sub will merge with and into Paramount, with Paramount surviving the merger and becoming a wholly-owned, direct subsidiary of New Paramount.

Paramount Merger Sub has not conducted any business operations other than such operations that are incidental to its formation and in connection with the Transactions. Paramount Merger Sub’s principal executive offices are located at 1515 Broadway, New York, NY 10036.

 

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Paramount Merger Sub II

Paramount Merger Sub II is a Delaware corporation and a wholly-owned, direct subsidiary of New Paramount. Paramount Merger Sub II was organized on June 10, 2024 solely for the purpose of effecting the New Paramount Merger. As a result of the New Paramount Merger, Paramount Merger Sub II will merge with and into New Paramount, with New Paramount surviving the merger.

Paramount Merger Sub II has not conducted any business operations other than such operations that are incidental to its formation and in connection with the Transactions. Paramount Merger Sub II’s principal executive offices are located at 1515 Broadway, New York, NY 10036.

Skydance Merger Sub

Skydance Merger Sub is a California limited liability company and a wholly-owned, direct subsidiary of New Paramount. Skydance Merger Sub was organized on June 3, 2024 solely for the purpose of effecting the Skydance Merger. As a result of the Skydance Merger, Skydance Merger Sub will merge with and into Skydance, with Skydance surviving the merger and becoming a wholly-owned subsidiary of New Paramount.

Skydance Merger Sub has not conducted any business operations other than such operations that are incidental to its formation and in connection with the Transactions. Skydance Merger Sub’s principal executive offices are located at 1515 Broadway, New York, NY 10036.

 

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INFORMATION ABOUT SKYDANCE

Skydance

Skydance is a diversified media company focused on creating high-quality, event-level entertainment for global audiences. Skydance develops, finances and produces live-action and animated films, television shows, sports content and interactive games for release in media worldwide. As of June 30, 2024, Skydance has produced or co-financed a total of 35 live-action and animated feature films, 24 of which were co-financed with Paramount, including films for the franchise properties Mission: Impossible, Star Trek and Terminator. Skydance also co-produced and co-financed Top Gun: Maverick with Paramount, which grossed $1.5 billion at the worldwide box office in 2022, making it one of the most successful films in Paramount history. As of June 30, 2024, Skydance has also produced 29 seasons of live-action and animated television content across 14 series and supplies premium scripted and unscripted television content across a range of platforms including Netflix, Amazon Prime Video and Apple TV+. Its television series include Grace and Frankie, Foundation, Condor, The Big Door Prize and FUBAR, as well as Reacher, Tom Clancy’s Jack Ryan and Cross, which were each co-produced with Paramount. Skydance’s animation studio, led by Pixar co-founder John Lasseter, has entered into a multi-year partnership with Netflix. The first animated feature film under the partnership, Spellbound, is expected to be released in 2024. Additionally, Skydance develops and produces premium scripted and unscripted sports-related content through its joint venture with the NFL, Skydance Sports. Despite its nascency, Skydance’s sports content has already generated significant acclaim, including for Golden Globe-nominated feature Air, and Sports Emmy-nominated NFL Draft: The Pick Is In. Skydance Games comprises a next-generation console gaming studio and a distinguished virtual reality studio focused on developing genre-defining titles like The Walking Dead: Saints and Sinners and the upcoming Skydance’s Behemoth and Marvel 1943: Rise of Hydra. Finally, Skydance recently launched a new horror film label, Nocturna, which has announced its first project, They Will Kill You.

Skydance’s principal executive offices are located at 2900 Olympic Boulevard, Santa Monica, California 90404 and its telephone number is (424) 291-3400.

 

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THE TRANSACTIONS

This section describes the Transactions. The descriptions of the Transaction Agreement, the Subscription Agreements and the Voting Agreement (collectively, the “Transaction Documents”) in this section and elsewhere in this information statement/prospectus are qualified in their entirety by reference to the complete text of the transaction documents, copies of which are attached as Annexes A, E and F, respectively, and all of which are incorporated by reference into this information statement/prospectus. This summary is not intended to be complete and may not contain all of the information about the Transactions that is important to you. You are encouraged to carefully read the Transaction Documents in their entirety. This section is not intended to provide you with any factual information about New Paramount, Paramount or Skydance. Such information can be found elsewhere in this information statement/prospectus and in the public filings that Paramount makes with the SEC that are incorporated by reference into this information statement/prospectus, as described in the section entitled “Where You Can Find More Information” beginning on page 316 of this information statement/prospectus.

General

On July 7, 2024, Paramount entered into the Transaction Agreement, pursuant to which Paramount and Skydance will become wholly-owned subsidiaries of New Paramount, a new publicly listed company, once the Transactions are completed. In connection with the Transaction Agreement, Paramount formed New Paramount and, as direct subsidiaries of New Paramount, the Merger Subs. Subject to the terms and conditions of the Transaction Agreement, (a) on the day immediately prior to the Closing Date, Paramount Merger Sub will merge with and into Paramount, with Paramount surviving the merger, (b) on the Closing Date, Paramount Merger Sub II will merge with and into New Paramount, with New Paramount surviving the merger, (c) on the Closing Date, following the New Paramount Merger, the Upstream Blocker Holders will transfer all of the issued and outstanding equity interests in certain blocker entities to New Paramount in exchange for an allocation of the Skydance Merger Consideration and (d) on the Closing Date, following the Blocker Contribution and Exchange, Skydance Merger Sub will merge with and into Skydance, with Skydance surviving the merger. As a result of the Transactions, Paramount and Skydance will become wholly-owned subsidiaries of New Paramount, which will be renamed “[  ]” immediately following the completion of the Mergers.

Concurrently with the execution of the Transaction Agreement, (a) the PIPE Equity Investors entered into the Subscription Agreements providing for a private placement investment in an aggregate amount of up to $6.0 billion in exchange for receiving (i) up to an aggregate amount of 400 million shares of New Paramount Class B common stock, subject to ratable reduction in accordance with the terms of the Subscription Agreements, for a purchase price of $15.00 per share (less an aggregate subscription discount of 1.875% of such PIPE Equity Investor’s Pro Rata Share of the primary gross proceeds) and (ii) in the case of the NAI Equity Investors, an aggregate number of 200 million warrants, each to subscribe for one share of New Paramount Class B common stock per warrant at an initial exercise price of $30.50 per share, with such underlying stock and exercise price subject to customary anti-dilution adjustments, and with an expiration date that is five years from the date of issuance of such warrants, in each case, pursuant to the terms of the Subscription Agreements and (b) the NAI Equity Investors entered into a purchase and sale agreement with NAI and the NAI Shareholders, pursuant to which the NAI Equity Investors agreed, upon the terms and subject to the conditions set forth in such agreement, to purchase all of the outstanding equity interests of NAI from such stockholders. The NAI Transaction and the PIPE Transaction will occur on the Closing Date substantially contemporaneously with each other immediately prior to the completion of the New Paramount Merger. The closings of the NAI Transaction and the PIPE Transaction are each conditioned upon, among other things, the substantially concurrent consummation of the Transactions.

 

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The following diagrams illustrate in simplified terms the current structure of Paramount and Skydance and the expected structure of New Paramount following the completion of the Transactions.

Before the Mergers

 

 

After the Mergers

 

 

 

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Merger Consideration

Upon completion of the Pre-Closing Paramount Merger on the day immediately prior to the Closing Date, each share, other than any Pre-Closing Paramount Merger Cancelled Shares, of (a) Paramount Class A common stock that is issued and outstanding immediately prior to the Pre-Closing Paramount Merger Effective Time will be converted automatically into the right to receive one share of New Paramount Class A common stock and (b) Paramount Class B common stock that is issued and outstanding immediately prior to the Pre-Closing Paramount Merger Effective Time will be converted automatically into the right to receive one share of New Paramount Class B common stock. All shares of Paramount common stock that have been converted to shares of New Paramount common stock in the Pre-Closing Paramount Merger will automatically be cancelled and will cease to exist and no longer be outstanding as shares of Paramount common stock.

In connection with the New Paramount Merger, Paramount stockholders (other than the Specified Stockholders, with respect to shares of Paramount Class B common stock, and the Specified NAI Stockholders, with respect to shares of Paramount Class A common stock) are entitled to make an election as to the form of consideration received for their shares of Paramount common stock held immediately prior to the Pre-Closing Paramount Merger. Paramount stockholders (other than the Specified Stockholders, with respect to shares of Paramount Class B common stock, and the Specified NAI Stockholders, with respect to shares of Paramount Class A common stock) may elect to receive, in accordance with the election procedures and subject to the proration mechanism set forth in the Transaction Agreement and described herein, (a) with respect to each share of Paramount Class A common stock held by such stockholder (i) the Class A Cash Consideration or (ii) the Class A Stock Consideration and (b) with respect to each share of Paramount Class B common stock held by such stockholder (i) the Class B Cash Consideration or (ii) the Class B Stock Consideration. The maximum amount of cash consideration that holders of Paramount Class B common stock will be entitled to receive pursuant to the New Paramount Merger is approximately $4.3 billion in the aggregate, and a maximum of 285,889,212 shares of Paramount Class B common stock will be entitled to receive the Class B Cash Consideration. The elections to receive Class B Cash Consideration will be prorated as necessary to ensure that these limits are not exceeded. For further information, see the sections entitled “Summary of the Transaction Agreement—Merger Consideration; Conversion of Shares; Exchange of Certificates—Elections as to Form of Consideration” and “Summary of the Transaction Agreement—Merger Consideration; Conversion of Shares; Exchange of Certificates—Proration” beginning on pages 174 and 176, respectively, of this information statement/prospectus.

Upon completion of the New Paramount Merger on the Closing Date, (a) each share, other than any New Paramount Merger Cancelled Shares, of (i) New Paramount Class A common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time and that is held by a Specified NAI Stockholder will remain issued and outstanding as a share of New Paramount Class A common stock, (ii) New Paramount Class A common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time that is not held by a Specified NAI Stockholder and with respect to which an election to receive Class A Cash Consideration has been properly made and not revoked or deemed revoked pursuant to the terms of the Transaction Agreement will be converted automatically into the right to receive the Class A Cash Consideration, (iii) New Paramount Class A common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time that is not held by a Specified NAI Stockholder and with respect to which (A) an election to receive Class A Stock Consideration has been properly made and not revoked or deemed revoked pursuant to the terms of the Transaction Agreement or (B) neither an election to receive Class A Cash Consideration nor an election to receive Class A Stock Consideration has been made will be converted automatically into the right to receive the Class A Stock Consideration, (iv) New Paramount Class B common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time and that is held by a Specified Stockholder or a PIPE Equity Investor will remain issued and outstanding as one share of New Paramount Class B common stock, (v) New Paramount Class B common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time that is not held by a Specified Stockholder or a PIPE Equity Investor and with respect to which an election to receive Class B Cash

 

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Consideration has been properly made and not revoked or deemed revoked pursuant to the terms of the Transaction Agreement will, subject to the proration mechanism described herein, be converted automatically into the right to receive the Class B Cash Consideration, and (vi) New Paramount Class B common stock that is issued and outstanding immediately prior to the New Paramount Merger Effective Time that is not held by a Specified Stockholder or a PIPE Equity Investor and with respect to which (A) an election to receive the Class B Stock Consideration has been properly made and not revoked or deemed revoked pursuant to the terms of the Transaction Agreement or (B) neither an election to receive Class B Cash Consideration nor an election to receive Class B Stock Consideration has been made will remain issued and outstanding as one share of New Paramount Class B common stock, (b) each New Paramount Merger Cancelled Share will be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor and (c) each share of capital stock of Paramount Merger Sub II outstanding immediately prior to the New Paramount Merger Effective Time will be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor. All shares of New Paramount common stock that have converted into the right to receive the applicable merger consideration in connection with the New Paramount Merger (other than, subject to the proration mechanism described herein, pursuant to clauses (a)(i), (a)(iv) or (a)(vi) above) will cease to exist and no longer be outstanding. Paramount Class A common stock currently trades on Nasdaq under the ticker symbol “PARAA,” and Paramount Class B common stock currently trades on Nasdaq under the ticker symbol “PARA.” On July 1, 2024, which was the last trading day prior to renewed market speculation regarding the Transactions, the closing price of Paramount Class A common stock was $17.92 per share, and the closing price of Paramount Class B common stock was $10.14 per share. As a result of the Transactions, (i) former holders of Paramount common stock (other than the Specified NAI Stockholders) that have made or are deemed to have made stock elections or whose cash elections are subject to proration will own shares of New Paramount Class B common stock, which are expected to be listed for trading on Nasdaq under the ticker symbol “PARA,” and will not own shares of New Paramount Class A common stock and (ii) NAI and its applicable subsidiaries will hold shares of New Paramount Class B common stock and 100% of the New Paramount Class A common stock (which is not expected to be listed for trading on a stock exchange). Entities controlled by the Ellison family will hold approximately 77.5% of the New Paramount Class A common stock indirectly through their collective approximate 77.5% ownership interest in NAI.

Upon completion of the Skydance Merger on the Closing Date, (a) each Skydance Membership Unit that is issued and outstanding immediately prior to the Skydance Merger Effective Time (other than any Skydance Membership Unit that is held, directly or indirectly, by New Paramount or Skydance) will be converted automatically into the right to receive the applicable portion of the Skydance Merger Consideration as determined in accordance with the Transaction Agreement and the Skydance LLC Agreement, (b) each Skydance Membership Unit that is issued and outstanding immediately prior to the Skydance Merger Effective Time that is held, directly or indirectly, by New Paramount or Skydance will remain as outstanding limited liability company interests in the Surviving Skydance Entity and (c) all of the limited liability company interests of Skydance Merger Sub outstanding immediately prior to the Skydance Merger Effective Time will be converted automatically into an equivalent number of limited liability company interests of the Surviving Skydance Entity with the same rights, powers and privileges as the limited liability company interests so converted.

Treatment of Equity Awards

Paramount Equity Awards

In connection with the Mergers, as of the Pre-Closing Paramount Merger Effective Time:

 

(a)

each Paramount Option that is outstanding and unexercised immediately prior to the Pre-Closing Paramount Merger Effective Time will be assumed by New Paramount and converted into a stock option to purchase an equivalent number of shares of New Paramount Class B common stock, with an exercise price per share of New Paramount Class B common stock equal to the exercise price per share of such Paramount Option immediately prior to the Pre-Closing Paramount Merger Effective Time, with such converted option having the same terms (including vesting requirements and any applicable terms relating to accelerated vesting upon qualifying terminations of employment) as those of the

 

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corresponding Paramount Option immediately prior to the Pre-Closing Paramount Merger Effective Time;

 

(b)

each Paramount RSU Award that is outstanding immediately prior to the Pre-Closing Paramount Merger Effective Time will be assumed by New Paramount and converted into an award of restricted stock units covering an equivalent number of shares of New Paramount Class B common stock, with such converted award of restricted stock units having the same terms (including vesting requirements and any applicable terms relating to accelerated vesting upon qualifying terminations of employment) as those of the corresponding Paramount RSU Award immediately prior to the Pre-Closing Paramount Merger Effective Time;

 

(c)

each Paramount PSU Award that is outstanding immediately prior to the Pre-Closing Paramount Merger Effective Time will be assumed by New Paramount and converted into an award of restricted stock units covering an equivalent number of shares of New Paramount Class B common stock, with performance-based vesting conditions for performance periods not completed prior to the Pre-Closing Paramount Merger Effective Time deemed satisfied at target level, and with such converted award of restricted stock units having the same terms (including vesting requirements and any applicable terms relating to accelerated vesting upon qualifying terminations of employment) as those of the corresponding Paramount PSU Award immediately prior to the Pre-Closing Paramount Merger Effective Time, except that such converted award of restricted stock units will no longer be subject to performance-based vesting conditions (but will remain subject to time-based vesting conditions); and

 

(d)

each Paramount Notional Unit that is outstanding immediately prior to the Pre-Closing Paramount Merger Effective Time will be converted into a notional unit relating to an equivalent number of shares of New Paramount Class B common stock, with such converted notional unit having the same terms (including timing and form of payment) as those of the corresponding Paramount Notional Unit immediately prior to the Pre-Closing Paramount Merger Effective Time.

Skydance Equity and Phantom Equity Awards

At the Skydance Merger Effective Time, each Skydance Profits Interest Unit that is outstanding immediately prior to the Skydance Merger Effective Time will be converted automatically into the right to receive the applicable portion of the Skydance Merger Consideration as determined in accordance with the Transaction Agreement and the Skydance LLC Agreement. In addition, at the Skydance Merger Effective Time, each award of Skydance Phantom Units and each award of Skydance Sports Phantom Units (if any), in each case, that is outstanding immediately prior to the Skydance Merger Effective Time will be cancelled and terminated and converted into the right to receive the applicable portion of the Skydance Merger Consideration as determined in accordance with the Transaction Agreement, less applicable withholding taxes.

Background of the Transactions

The following chronology summarizes the key meetings and events that led to the signing of the Transaction Agreement. The following chronology does not purport to catalogue every conversation or correspondence by and among members of the Special Committee, representatives of the Paramount Board, Paramount, NAI, Skydance or RedBird, or their respective advisors, or any other person. Throughout the process, members of the Special Committee, and representatives of advisors to the Special Committee, were aware of and considered news reports and certain other publicly available information concerning Paramount, NAI and the process that led up to the signing of the Transaction Agreement. The inclusion of such news reports below should not be understood to confirm or vouch for the accuracy of such reports.

In December 2019, CBS Corporation (“CBS”) and Viacom Inc. (“Viacom”) merged to form ViacomCBS Inc. On December 5, 2019, the first day of trading for common stock of ViacomCBS Inc., which later changed its name to Paramount Global (“Paramount”), the closing price of the voting Class A common stock was $44.50 and the closing price of the non-voting Class B common stock was $40.86.

 

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National Amusements, Inc. (“NAI”), a closely held corporation that owns and operates movie screens in the United States, the United Kingdom and South America, was the controlling stockholder of each of CBS and Viacom prior to their merger, and remained the controlling stockholder of Paramount following such merger. Throughout the course of the exploration of strategic alternatives by the Special Committee (as defined below), NAI owned, and as of the date of this information statement/prospectus NAI owns, directly or indirectly, approximately 77.4% of Paramount’s voting Class A common stock and approximately 5.2% of Paramount’s non-voting Class B common stock, representing approximately 10% of Paramount’s outstanding shares of Class A common stock and Class B common stock on a combined basis as of the date of this information statement/prospectus. Shari Redstone, the non-executive chair of the board of directors of Paramount (the “Paramount Board”), is the Chairperson, Chief Executive Officer (“CEO”) and President of NAI and a beneficiary of the trusts that own all of NAI’s equity interests.

Since the merger of CBS and Viacom, the Paramount Board and Paramount management have regularly reviewed the performance, strategy, competitive position, opportunities and prospects of Paramount in light of the then-current business and economic environments, as well as developments in the industries in which Paramount operates and the opportunities and challenges facing participants in those industries. These reviews have included consideration of, and discussions with other companies from time to time regarding, potential strategic alternatives, including business combinations and other strategic transactions.

On March 29, 2023, S&P Global Ratings (“S&P”) lowered Paramount’s issuer credit rating from “BBB” to “BBB-” (the lowest investment-grade level), citing higher peak losses in Paramount’s direct-to-consumer segment and worsening trends for linear television.

On May 4, 2023, Paramount (i) reported earnings and revenue for the first fiscal quarter of 2023 that missed analyst estimates and (ii) announced that it would be reducing the quarterly dividend payable to holders of Paramount common stock from 24 cents per share to 5 cents per share (the first time since 2009 that Paramount, or its predecessors CBS and Viacom, had reduced its quarterly dividend). The closing price of Paramount Class A common stock on that day was $19.04, a decline of 27% compared to the day prior, and the closing price of Paramount Class B common stock on that day was $16.40, a decline of 28% compared to the day prior.

Approximately two weeks later, on May 15, 2023, S&P lowered NAI’s issuer credit rating from “B” to “CCC+”, citing weak free operating cash flow due to Paramount’s reduction of its quarterly dividend, which reduced NAI’s run-rate annual dividend from over $60 million to an estimated $13 million in 2024. S&P stated that the negative outlook reflected the risk that NAI’s cash generation would not be sufficient to cover its debt obligations, leaving it reliant on, among other things, potential liquidation of Paramount stock to fund its fixed charges.

Later that month, NAI entered into a senior preferred purchase agreement (the “BDT Purchase Agreement”), dated as of May 25, 2023, by and between NAI and BDT Columbia Holdings, LLC (“BDT Columbia”), an affiliate of BDT & MSD Partners (“BDT”), pursuant to which NAI sold to BDT Columbia shares of Series A Senior Preferred Stock of NAI, together with one warrant to purchase from NAI up to 3.5 million shares of Paramount Class B common stock, for aggregate consideration of $125 million. The BDT Purchase Agreement provided NAI the option to sell to BDT Columbia additional shares of Series A Senior Preferred Stock of NAI, together with warrants to purchase up to an additional 2.8 million shares of Paramount Class B common stock. In a press release announcing the investment, NAI stated that the investment would enable NAI to reduce interest expense and pay down its revolving loan and recent term loan borrowings (under which facilities certain of NAI’s shares of Paramount common stock had been pledged as collateral).

In July 2023, news outlets reported that NAI was in discussions with its creditors to renegotiate some of its outstanding debt, after NAI disclosed in its annual report that lower cash flows had created uncertainty about NAI’s ability to continue as a going concern, creating a risk of default under its existing debt.

 

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On September 7, 2023, pursuant to and as contemplated by the BDT Purchase Agreement, NAI sold to BDT Columbia additional shares of Series A Senior Preferred Stock of NAI and one additional warrant to purchase from NAI up to 700,000 shares of Paramount Class B common stock, for aggregate additional consideration of $25 million.

On October 12, 2023, the Paramount Board met via videoconference, with representatives of Paramount management in attendance, to review, in light of rapidly evolving industry conditions, Paramount management’s latest internal financial forecasts for Paramount and various strategic alternatives that may be available to Paramount, including transactions involving all of Paramount as well as asset sales and other strategic opportunities. As part of this review, Paramount management identified a range of potential counterparties to such transactions, including strategic and financial counterparties. On the date of the meeting, the closing price of Paramount Class A common stock was $14.73 and the closing price of Paramount Class B common stock was $11.73. Following the discussion, Ms. Redstone reminded the Paramount Board that NAI was looking at certain strategic opportunities and that she expected to be able to provide the Paramount Board with feedback on that process in approximately one month.

Later that month, news outlets reported that NAI was open to a merger or sale of Paramount and speculated that market conditions and other factors, including Paramount’s diminished market valuation relative to its debt, would make a transaction involving all of Paramount challenging. The news outlets also speculated that, in light of such factors, NAI might explore a sale of NAI in lieu of a transaction directly involving Paramount.

On December 7, 2023, news outlets reported that Skydance Media, LLC (“Skydance”) and its affiliates were exploring a potential acquisition of a controlling interest in NAI.

The following day, representatives of Ropes & Gray LLP (“R&G”), legal counsel to NAI, notified representatives of Simpson Thacher & Bartlett LLP (“Simpson”), legal counsel to Paramount, that NAI was engaged in confidential discussions with multiple parties (whom R&G did not identify) regarding a potential change of control of NAI that would involve the indirect sale of NAI’s ownership interest in Paramount to a third party.

The following week, news outlets reported that Paramount was “for sale.”

In mid-December 2023, Paramount management discussed the retention of a financial advisor to provide advice and assistance in exploring potential strategic alternatives for Paramount. Paramount management determined to engage Rothschild & Co US Inc. (“Rothschild & Co”) and LionTree Advisors LLC (“LionTree”). In making this decision, Paramount considered each of Rothschild & Co’s and LionTree’s reputation, qualification and experience in the industries in which Paramount operates, as well as their prior engagements with and knowledge of Paramount’s business.

On December 19, 2023, Robert Bakish, the then-CEO of Paramount, and the CEO of Party A, an industry peer, met in person to discuss, among other things, the possibility of a business combination between Paramount and Party A.

On December 20, 2023, news outlets reported that Paramount and Warner Bros. Discovery (“WBD”) had been engaging in discussions regarding a potential transaction between Paramount and WBD.

On December 27, 2023, pursuant to and as contemplated by the BDT Purchase Agreement, NAI sold to BDT Columbia additional shares of Series A Senior Preferred Stock of NAI and one additional warrant to purchase from NAI up to 700,000 shares of Paramount Class B common stock, for aggregate additional consideration of $25 million.

In late December 2023, Skydance and certain of its affiliates submitted a proposal to NAI regarding acquiring a controlling interest in NAI, subject to a concurrent strategic combination of Skydance and

 

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Paramount. On December 28, 2023, representatives of R&G notified representatives of Simpson that NAI had received a proposal from Skydance and certain of its affiliates to acquire a controlling interest in NAI. The correspondence from R&G stated that (i) the proposal from Skydance and its affiliates was conditioned on a transaction involving a strategic combination of Skydance and Paramount and included an offer to buy equity in Paramount at a price per share to be negotiated by Skydance and Paramount, (ii) NAI had informed Skydance that any transaction involving Paramount would need to be negotiated solely with Paramount directly and (iii) Paramount had the full support of NAI and Ms. Redstone in determining whether to accept or reject a transaction with Skydance. The correspondence from R&G also (A) included a request that the Paramount Board refer consideration of such proposed transactions involving Paramount to a committee of independent and disinterested directors while NAI further explored the proposed transaction involving NAI and (B) included a list of due diligence requests with respect to Paramount that NAI had received from Skydance.

Thereafter, certain independent members of the Paramount Board contacted a representative of Cravath, Swaine & Moore LLP (“Cravath”), which had acted as legal counsel to a special committee of the board of directors of Viacom in the merger of CBS and Viacom, on behalf of the independent directors of the Paramount Board to discuss the possibility of Cravath acting as legal counsel to a to-be-formed committee of the Paramount Board in the event of a transaction proposal that would be referred to such committee to be evaluated by independent and disinterested directors.

On January 2, 2024, the Paramount Board met via videoconference (with Ms. Redstone and Robert Klieger recusing themselves from the meeting), with representatives of Simpson and Paramount management in attendance, and formed a committee of the Paramount Board comprised of all of the Paramount Board’s independent directors who were not affiliated with or designees of NAI (the “Special Committee”) to evaluate a potential transaction involving a third party and to explore strategic alternatives for Paramount, with the Special Committee having rights and responsibilities to be determined by the Paramount Board (which the Paramount Board subsequently determined on January 18, 2024, as described below). The initial members of the Special Committee were Barbara M. Byrne, Linda M. Griego, Judith A. McHale, Dawn Ostroff, Charles E. Phillips, Jr., Susan Schuman, Nicole Seligman and Frederick O. Terrell. None of Ms. Redstone, Mr. Klieger and Mr. Bakish served on the Special Committee. The Special Committee held its first meeting immediately following its formation, with representatives of Cravath and Paramount management in attendance. During the meeting, Mr. Bakish shared his preliminary views regarding a potential transaction with Skydance, and then the Special Committee formally determined to engage Cravath as its legal counsel and discussed with counsel certain preliminary process matters as well as legal considerations and the duties of the members of the Special Committee in the context of a transaction involving NAI.

From time to time between the formation of the Special Committee and the signing of the Transaction Agreement, members of the Special Committee and Ms. Redstone had multiple conversations, during which Ms. Redstone provided her perspective on the strategic review process and various potential counterparties. In addition, as noted above, from time to time between the formation of the Special Committee and the signing of the Transaction Agreement, the Special Committee considered various public news reports concerning Paramount, NAI, and the strategic review process.

On January 3, 2024, representatives of Cravath held an introductory call with representatives of R&G to discuss matters relating to a potential transaction among Paramount, NAI and Skydance. During the call, among other matters, the representatives of R&G (i) indicated that Skydance had proposed two separate transactions, one involving NAI and one involving Paramount, where each transaction would be cross-conditioned on the other, (ii) stated that NAI would defer to the Special Committee to determine whether Paramount should pursue discussions with Skydance and that NAI would support Paramount’s independent decision-making with respect to such discussions and (iii) when asked, indicated that NAI had not, at that juncture, proposed to condition any transaction involving Paramount on the approval of a majority of the Paramount stockholders who were not affiliated with NAI (a “majority-of-the-minority vote”), but noted that the discussions regarding any transaction between NAI and Skydance were still preliminary and there were many issues that had not yet been discussed.

 

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On January 4, 2024, the Special Committee met via videoconference, with representatives of Cravath in attendance, to discuss Cravath’s conversation with R&G and proposed next steps with respect to the Special Committee’s process for exploring strategic alternatives. The Special Committee also discussed the retention of a financial advisor, with directors suggesting names of potential financial advisors including based on past experience with such advisors and independence considerations. The Special Committee then determined to contact Centerview Partners LLC (“Centerview”) regarding a potential engagement. In making this decision, the Special Committee considered Centerview’s reputation, qualification and experience in investment banking and mergers and acquisitions generally and in the industries in which Paramount operates, as well as special committee assignments and dual-class situations such as Centerview’s engagement as a financial advisor for a special committee of the board of directors of CBS in the merger of CBS and Viacom.

On January 6, 2024, at the Special Committee’s direction, representatives of Cravath held an introductory call with representatives of Latham & Watkins LLP (“Latham”), legal counsel to Skydance, to discuss matters relating to potential transactions involving Paramount, NAI and Skydance. During the call, among other matters, the representatives of Latham (i) indicated that Skydance was contemplating three separate but related and cross-conditioned transactions – an acquisition of a controlling interest in NAI, a merger of Skydance and Paramount, and an additional cash investment in Paramount, (ii) conveyed a request from Skydance for a limited waiver under Section 203 of the Delaware General Corporation Law (“DGCL 203”) to exempt certain discussions between Skydance and NAI from the restrictions applicable to an “interested stockholder” under DGCL 203 (a “Limited DGCL 203 Waiver”) and (iii) indicated that Skydance was not interested in pursuing only an acquisition of NAI without a concurrent transaction directly involving Paramount (such an acquisition of NAI without a concurrent transaction directly involving Paramount, an “NAI-only transaction”) and that Skydance was therefore prepared to subject itself to a “standstill” that would preclude Skydance from pursuing such an NAI-only transaction without the Special Committee’s prior approval.

On January 7, 2024, the Special Committee met via videoconference, with representatives of Cravath in attendance, to discuss the potential transactions and other matters described by Latham to Cravath the day prior. Representatives of Cravath also discussed legal considerations and the duties of the members of the Special Committee in the context of a transaction involving NAI.

On January 8, 2024, Skydance submitted to the Paramount Board a written non-binding indication of interest (the “January 8 Skydance Proposal”) on behalf of itself and certain of its affiliates to combine Skydance with Paramount and for certain affiliates of Skydance (whom the January 8 Skydance Proposal did not identify) to make an additional cash investment in Paramount and acquire a controlling interest in NAI. The January 8 Skydance Proposal contemplated the merger of Skydance into Paramount in an all-stock merger, pursuant to which the equityholders of Skydance would receive newly issued shares of non-voting Class B common stock of the surviving parent entity of such merger (referred to as “New Paramount”) at a to-be-agreed price per share (referred to as the “Transaction Class B Price”) that implied a valuation of Skydance of $5.75–$6.25 billion. The January 8 Skydance Proposal also contemplated an additional $1.0–$3.0 billion cash investment in New Paramount by certain affiliates of Skydance in exchange for shares of Class B common stock of New Paramount at the Transaction Class B Price. The January 8 Skydance Proposal also stated that Skydance anticipated the combination of Skydance and Paramount would generate $1.0–$1.5 billion of run-rate synergies. The January 8 Skydance Proposal further stated that the proposed transactions with Paramount were conditioned on the concurrent consummation of an acquisition of a 90% interest in NAI by affiliates of Skydance, but did not disclose a proposed purchase price for that acquisition. On January 8, 2024, the closing price of Paramount Class A common stock was $19.76 and the closing price of Paramount Class B common stock was $14.69.

On January 9, 2024, the Special Committee met via teleconference, with representatives of Cravath and Paramount management in attendance for all or part of the meeting, to review and discuss the January 8 Skydance Proposal. Mr. Bakish also provided his perspective on other potential strategic alternatives that might be available to Paramount, including a preliminary view of additional strategic and financial counterparties that Paramount management thought might be interested in exploring a transaction with Paramount, including

 

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Party A, Party B (an industry peer) and Party C (a leading private equity firm with experience in the media industry), which view was informed by prior outreach and discussions with various parties, including historical discussions with certain strategic counterparties that had failed to progress.

On January 10, 2024, news outlets reported that (i) NAI had launched a formal auction to pursue a potential sale of NAI and (ii) Skydance, partnering with other investors in Skydance, including RedBird Capital Partners (“RedBird”), was exploring an all-cash acquisition of NAI, with a subsequent merger of Skydance and Paramount. On January 10, 2024, the closing price of Paramount Class A common stock was $18.99 and the closing price of Paramount Class B common stock was $14.12.

Later that day, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance. Representatives of Cravath discussed legal considerations and the duties of the members of the Special Committee in the context of a transaction involving NAI. Representatives of Centerview also provided an overview of (i) the industries in which Paramount operates, including recent trends and Paramount’s strategic position in such industries, (ii) potential strategic alternatives that might be available to Paramount, including a transaction involving all of Paramount as well as asset sales and other strategic opportunities, and (iii) the January 8 Skydance Proposal. Other topics discussed at the meeting included (A) the lack of detail in the January 8 Skydance Proposal and the Special Committee’s potential responses to such proposal, (B) the current regulatory environment for mergers in the media sector and how it could impact the interest level of certain strategic counterparties or the feasibility of a transaction with any such strategic counterparty and (C) the impact that Paramount’s broadcast licenses could have on the likelihood and timing of obtaining required regulatory approvals for various strategic or financial counterparties.

On January 11, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance for all or part of the meeting. Mr. Bakish and Naveen Chopra, the Chief Financial Officer of Paramount, discussed Paramount management’s perspectives on potential strategic alternatives that might be available to Paramount, including preliminary views regarding counterparties that Paramount management previously identified as parties that might be interested in exploring a potential transaction with Paramount. The Special Committee also considered the optimal process for engagement with potential counterparties to assess their interest in a transaction with Paramount, and authorized Mr. Bakish to engage directly with the CEOs of each of Party A and Party B (the two strategic counterparties which Paramount management had identified as most likely to be interested in a business combination or other transaction involving Paramount), to determine their interest in exploring a potential strategic transaction.

Later that day, at the direction of the Special Committee, representatives of Centerview and Cravath held a call with Latham and Skydance to discuss the January 8 Skydance Proposal and to request, on behalf of the Special Committee, additional information regarding Skydance and the January 8 Skydance Proposal in order to enable the Special Committee to evaluate the January 8 Skydance Proposal.

Also on January 11, 2024, Mr. Bakish held separate calls with each of (i) the CEO of Party A, during which the parties further discussed a potential business combination between Paramount and Party A and a possible follow-up meeting with the broader management teams of each company and (ii) the CEO of Party B, during which the parties discussed at a high level a range of possible transactions between Paramount and Party B, including an acquisition of Paramount by Party B and a potential joint venture involving a combination of the companies’ streaming platforms (the “Party B Streaming JV”).

Beginning on January 11, 2024, and over the course of the ensuing months, as further described below, at the direction of the Special Committee, representatives of Cravath, Centerview and Paramount management engaged in discussions with potential counterparties to a strategic transaction with Paramount, including companies operating in the same or similar industries as Paramount as well as financial counterparties, to gauge their interest in a potential strategic transaction with Paramount.

 

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On January 12, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance. Mr. Bakish summarized the conversations held with the CEOs of each of Party A and Party B the day prior, and representatives of Cravath and Centerview summarized the conversation held with representatives of Skydance and Latham the day prior. Mr. Bakish also shared his views on certain financial counterparties that Paramount management thought might be interested in a potential transaction with Paramount, including Party C based on Party C’s experience in the media industry and engagement with Paramount management during prior transaction processes.

Also on January 12, 2024, Skydance sent a letter (the “January 12 Skydance Letter”) to the Special Committee, which supplemented the terms of the January 8 Skydance Proposal by adding a preliminary range for the proposed Transaction Class B Price of $12.00 to $16.00. The low and high ends of the proposed Transaction Class B Price range represented an approximately 10% discount and a 20% premium, respectively, to the closing price of the Paramount Class B common stock (of $13.35) on January 11, 2024, the most recent trading day prior to receipt of the January 12 Skydance Letter.

On January 15 and January 16, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance. The participants discussed (i) the January 8 Skydance Proposal and the January 12 Skydance Letter, and a proposed response letter requesting certain additional information about Skydance and its proposal (which the representatives of Centerview and Cravath subsequently delivered to representatives of Skydance and Latham on January 15, 2024), (ii) proposed further engagement with respect to Skydance and Party A, including the possibility of entering into a non-disclosure agreement with each such party and holding a preliminary meeting between the management teams of Paramount and Party A for each company to better understand the financial profile of the other company, and (iii) potential further engagement with NAI and its advisors, including to obtain additional information regarding NAI’s financial condition, perspective on timing and priorities for a potential transaction.

On January 16, 2024, representatives of Cravath and Centerview held separate calls with R&G and BDT (NAI’s financial advisor), respectively, to discuss the status of NAI’s sale process and potential strategic alternatives that might be available to Paramount. During the calls, NAI’s advisors indicated that NAI would support any transaction recommended by the Special Committee if NAI believed the transaction would be in the best interests of Paramount and its stockholders, including NAI. NAI’s advisors also noted potential drawbacks of a transaction with certain counterparties from NAI’s perspective, including that certain counterparties (in particular, Party A) would pose heightened regulatory risk that would make them less attractive counterparties from NAI’s perspective, particularly because regulatory review could have delayed the consummation of a transaction with the resulting impact of exposing Paramount’s and NAI’s businesses to potentially further deteriorating industry conditions, and those transactions likely would not provide any cash consideration for Paramount stockholders.

On January 17, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview, Paramount management, LionTree and Rothschild & Co in attendance for all or part of the meeting, during which the representatives of LionTree and Rothschild & Co reviewed with the Special Committee their perspectives regarding a theoretical transaction that would (i) involve the repurchase by Paramount of the outstanding shares of Paramount Class A common stock held by NAI and other stockholders and (ii) result in Paramount’s existing dual-class stock structure being collapsed into a single class of common stock and all stockholders having voting rights (any such transaction, a “Share Reclassification Transaction”).

Also at the Special Committee’s meeting on January 17, 2024, representatives of Cravath and Centerview summarized the conversations held with representatives of R&G and BDT the day prior and the Special Committee authorized the negotiation of a non-disclosure agreement with Party A and directed the representatives of Cravath to send a draft non-disclosure agreement to representatives of Party A, which the representatives of Cravath did later that day. Over the course of the following days, representatives of Cravath and Party A’s legal counsel negotiated the non-disclosure agreement, which Paramount and Party A executed on

 

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January 21, 2024. The executed non-disclosure agreement between Paramount and Party A contained a standstill provision binding Party A, with a customary exclusion which permitted Party A to make proposals to Paramount privately and confidentially and a “fallaway” provision that allowed such party to make a proposal to acquire Paramount, NAI or the controlling interest in Paramount held by NAI in the event Paramount or, with the approval of the Special Committee, NAI entered into a definitive sale agreement (a “Fallaway Provision”). Thereafter and continuing into March 2024, representatives of the Special Committee, Paramount and Party A engaged in discussions and mutual due diligence, with each of Paramount and Party A providing certain confidential information regarding its business and financial condition to the other party and its representatives.

On January 18, 2024, the Paramount Board met via videoconference (with Ms. Redstone and Mr. Klieger recusing themselves from the meeting) and adopted further resolutions to formalize its decision of January 2, 2024 to create the Special Committee, which resolutions (i) delegated to the Special Committee the full and exclusive power and authority of the Paramount Board to the fullest extent permitted by law to, among other things, (A) review, evaluate and negotiate strategic alternatives for Paramount and to make such recommendations to the Paramount Board and to Paramount stockholders as the Special Committee deemed appropriate with respect thereto, including approving or disapproving any such strategic alternative, and (B) consider whether and on what basis Paramount would cooperate with NAI’s exploration of strategic alternatives, including requests to facilitate due diligence with respect to Paramount, and (ii) provided that the Paramount Board would not recommend or otherwise approve any such strategic alternative without a prior favorable recommendation thereof by the Special Committee. Following the conclusion of the meeting of the Paramount Board, the Special Committee met via videoconference, with representatives of Cravath in attendance, to discuss the terms of Centerview’s engagement letter memorializing the engagement that had begun on January 7, 2024, including the fees payable to Centerview.

On January 19, 2024, representatives of Centerview, Cravath, Latham, Paramount and Skydance met via videoconference, during which the representatives of Skydance reviewed a presentation on Skydance’s business and financial condition and discussed (i) the terms of Skydance’s transaction proposal, including the bases for the proposed implied valuation of Skydance, the proposed range for the Transaction Class B Price and the proposed synergy opportunities, and (ii) Skydance’s perspective on strategic plans for a possible combined company.

Also on January 19, 2024, news outlets reported that Apollo Global Management was exploring a possible acquisition of NAI.

On January 20, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance for all or part of the meeting, to discuss the meeting held between representatives of Centerview, Cravath, Latham, Paramount and Skydance the day prior. Other topics discussed at the meeting included upcoming meetings with Party A and Party B and next steps with respect to those parties and other potential counterparties, including Skydance.

Also at the Special Committee’s meeting on January 20, 2024, the Special Committee authorized the negotiation of a non-disclosure agreement with Skydance, discussed Skydance’s request for a Limited DGCL 203 Waiver and directed the representatives of Cravath to send a draft non-disclosure agreement to representatives of Latham, which the representatives of Cravath did later that day. Over the course of the following days, representatives of Cravath and Latham negotiated the non-disclosure agreement, which Paramount and Skydance executed on January 26, 2024. The executed non-disclosure agreement between Paramount and Skydance contained a standstill provision binding Skydance, with a customary exclusion which permitted Skydance to make proposals to Paramount privately and confidentially and a Fallaway Provision. Thereafter and continuing through the date of the Transaction Agreement, representatives of the Special Committee, Paramount and Skydance engaged in discussions and mutual due diligence, with each of Paramount and Skydance providing certain confidential information regarding its business and financial condition to the other party and its representatives, as described in more detail below.

 

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On January 22, 2024, representatives of Paramount management and representatives of Party A management met in person to review and discuss the financial profile of both companies, including through the exchange of forecasts and projections.

On January 23, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance, to discuss the meeting held between representatives of Paramount and Party A the day prior. Messrs. Bakish and Chopra shared their perspectives on a potential business combination with Party A, observing that a transaction with Party A had significant synergy potential but that both Paramount and Party A were highly levered and exposed to challenging industry trends. The participants also discussed next steps with respect to exploring a potential business combination with Party A, including the regulatory environment that such a transaction would likely encounter.

On January 24, 2024, following a meeting of the Paramount Board, the Special Committee met in person, with representatives of Cravath, Centerview and Paramount management in attendance for all or part of the meeting, to discuss a number of topics, including legal considerations and the duties of the members of the Special Committee in the context of a transaction involving NAI; certain legal and governance matters with respect to a potential transaction, including Skydance’s request for a Limited DGCL 203 Waiver; Paramount management’s internal financial forecasts, which had been reviewed with the Paramount Board earlier in the day; a presentation by Centerview regarding various strategic alternatives that might be available to Paramount; and proposed next steps for engagement with Skydance, Party A and Party B, including upcoming meetings scheduled with such parties, as well as outreach to other potential counterparties.

On January 26, 2024, representatives of Paramount management met in person with representatives of Party B management to further discuss Party B’s interest in a potential acquisition of Paramount by Party B or an alternative strategic transaction between the parties including the potential for a Party B Streaming JV. During the meeting, the CEO of Party B stated that Party B was not interested in a business combination transaction involving all of Paramount or a streaming joint venture but instead was interested in exploring a potential license for Paramount+ content for a licensing fee.

Also on January 26, 2024, Centerview delivered to the Special Committee a disclosure letter (the “Centerview Relationship Disclosure”) describing certain relationships of Centerview, which Centerview supplemented from time to time over the ensuing months through the date on which Paramount entered into the Transaction Agreement. For more information about the Centerview Relationship Disclosure, see the section entitled “—Opinion of the Special Committee’s Financial Advisor” beginning on page 154 of this information statement/prospectus.

Additionally, on January 26, 2024, the Special Committee approved by written consent a Limited DGCL 203 Waiver in respect of certain discussions between Skydance and NAI regarding a potential transaction. In determining to approve the waiver, the Special Committee considered, among other things, the fact that the non-disclosure agreement to be entered into between Paramount and Skydance contained an 18-month standstill agreement that would generally prevent Skydance from engaging in transactions with respect to Paramount or NAI without the Special Committee’s approval.

On January 29, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance, to discuss the meeting held between representatives of Paramount and Party B earlier in the week. The participants also discussed next steps with other potential counterparties, including Party A and Skydance. It was observed that, despite the widespread coverage in the media regarding NAI exploring a disposition of its interest in Paramount and Paramount exploring strategic alternatives, there had been limited inbound interest from potential counterparties regarding a strategic transaction with Paramount.

On January 30, 2024, Party D, a strategic counterparty, submitted to the Paramount Board a written non-binding indication of interest (the “January 30 Party D Proposal”) to acquire each outstanding share of

 

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Paramount Class A common stock for $28.58 in cash and each outstanding share of Paramount Class B common stock for $21.53 in cash, which represented an approximately 47% premium to the closing price of the Paramount Class A common stock (of $19.44) and an approximately 57% premium to the closing price of the Paramount Class B common stock (of $13.75) on January 29, 2024, the most recent trading day prior to receipt of the January 30 Party D Proposal. The January 30 Party D Proposal noted that the closing price of the Paramount Class B common stock had decreased by approximately 37% (from $21.79) since April 3, 2023, when Party D had previously submitted a written proposal to acquire all of the outstanding shares of Paramount common stock as a precursor to expressing its interest in, and pursuing, an acquisition of only a limited subset of Paramount’s assets. The January 30 Party D Proposal stated that Party D would finance the proposed transaction with a combination of senior secured debt, senior unsecured notes and equity (but did not specify the allocation among such sources or the providers of such financing).

On February 1, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance. The participants discussed the January 30 Party D Proposal, including the lack of information regarding Party D’s ability to finance the proposed transaction, with directors sharing their observations based on past experiences with Party D, including in connection with Party D’s prior attempts to acquire a limited subset of Paramount’s assets. The Special Committee determined that the viability and merits of the January 30 Party D Proposal should be explored further and directed the representatives of Cravath to send a draft non-disclosure agreement to Party D, which the representatives of Cravath did on February 4, 2024. This non-disclosure agreement was not executed, nor did Party D provide any feedback or engage further with respect to the draft non-disclosure agreement or the January 30 Party D Proposal.

Also at the Special Committee’s meeting on February 1, 2024, the participants discussed the status of the mutual due diligence processes with each of Party A and Skydance (which mutual due diligence had not yet commenced with respect to Skydance), and the Special Committee adopted resolutions which approved a Limited DGCL 203 Waiver in respect of certain discussions between Party A and NAI. In determining to approve the waiver, the Special Committee considered, among other things, the fact that the non-disclosure agreement with Party A contained an 18-month standstill agreement that would generally prevent Party A from engaging in transactions with respect to Paramount or NAI without the Special Committee’s approval.

On February 2, 2024, representatives of Centerview, Skydance and certain investors in Skydance, including RedBird, held a call to discuss the due diligence process for a potential transaction between Paramount and Skydance. During the call, among other things, the representatives of Centerview stated that any exchange of information between Paramount and Skydance would need to be on a reciprocal basis. Also during the call, representatives of Skydance requested that Paramount enter into an exclusivity agreement with Skydance. Over the course of the following week, representatives of Centerview, Skydance and certain investors in Skydance, including RedBird, had several discussions regarding mutually acceptable parameters for the due diligence process.

On February 5 and February 7, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance, to discuss the status of discussions with each of Party A and Skydance, including Skydance’s request for exclusivity. At the meetings, the Special Committee determined to advance discussions with Skydance in order to explore the merits of the potential transaction. Thereafter, a representative of Centerview held a call with a representative of BDT, who stated that (i) NAI was engaged in active discussions with Skydance and its affiliates as well as multiple other parties (whom BDT did not identify) regarding a sale of NAI and (ii) BDT would inform Centerview if any party expressed interest in a transaction with Paramount.

Also on February 7, 2024, representatives of Paramount management met via videoconference with representatives of Party A management to review and discuss certain financial information provided by Paramount to Party A in advance of the meeting, which the representatives of Party A had indicated Party A required in order for it to submit an initial transaction proposal.

 

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On February 9, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to review and discuss Paramount’s latest internal financial forecasts, reflecting Paramount management’s financial forecasts for Paramount on a standalone basis for fiscal years 2024 through 2028 (the “Paramount February Financial Forecasts”). The Special Committee then directed the representatives of Centerview to share the Paramount February Financial Forecasts with representatives of Skydance, which the representatives of Centerview did following the meeting. For more information about the Paramount February Financial Forecasts, see the section entitled “—Certain Unaudited Prospective Financial Information—Paramount Unaudited Prospective Financial Information” beginning on page 149 of this information statement/prospectus. At the meeting, representatives of Centerview also reviewed considerations relating to a potential Share Reclassification Transaction.

On February 12, 2024, representatives of Centerview, Skydance and certain Skydance investors held a call, during which the representatives of Skydance reviewed a presentation on Skydance’s business and financial condition. During the call, representatives of Skydance also provided further detail on expected sources of potential synergies in a transaction between Paramount and Skydance.

Also on February 12, 2024, news outlets reported that Apollo Global Management was no longer exploring a possible acquisition of NAI.

On February 14, 2024, Berkshire Hathaway Inc. (“Berkshire Hathaway”) publicly disclosed that it had sold approximately one-third of its approximately 15% stake in Paramount Class B common stock during the fourth fiscal quarter of 2023. News outlets also reported that Berkshire Hathaway intended to sell its remaining stake in Paramount in the near term, which (as publicly disclosed by Berkshire Hathaway on May 4, 2024) Berkshire Hathaway did (at a loss) during the first fiscal quarter of 2024.

On February 15, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance for all or part of the meeting, to discuss recent interactions with NAI, Skydance and Party A. Representatives of Centerview also (i) reviewed with the Special Committee the confidential information that Skydance had provided to date about its business and financial condition and (ii) continued the discussion from the Special Committee’s meeting on February 9, 2024 about a potential Share Reclassification Transaction. Representatives of Cravath also reviewed the proposed compensation that each member of the Special Committee would be entitled to receive, pending approval by the Nominating and Governance Committee of the Paramount Board, in consideration for their service on the Special Committee, consisting of (i) $10,000 per calendar month during which the Special Committee is in existence, beginning January 2024 (the “Monthly Fee”), (ii) a per-meeting fee of $2,000 for each meeting that the member of the Special Committee attended (the “Per-Meeting Fee”) and (iii) $1,000 per hour for time actually spent by the member of the Special Committee on litigation-related matters arising from or related to the member’s service on the Special Committee (the “Litigation Fee”).

On February 17, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview, Paramount management, LionTree and Rothschild & Co in attendance for all or part of the meeting, to discuss considerations related to a potential Share Reclassification Transaction. Representatives of Paramount management shared their perspectives that (i) a Share Reclassification Transaction would, following the consummation of such a transaction, enable Paramount to pursue a wider range of additional strategic alternatives than those currently available, including strategic alternatives subject to stockholder approval that NAI might not otherwise support, and (ii) in order to fund such a Share Reclassification Transaction, a “library-backed” financing transaction (involving the acquisition by a third party of a stake in a new entity to which Paramount would contribute rights to a portion of its library of titles) could be pursued. Representatives of Paramount management also described the terms of a proposal for such a library-backed financing transaction that Party E, a leading private equity firm, had submitted to Paramount management the month prior, and the Special Committee requested additional information from Paramount management regarding the types of strategic alternatives they would recommend exploring in the event that a Share Reclassification Transaction were pursued and ultimately consummated.

 

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On February 20, 2024, representatives of Paramount management met in person with representatives of Party B management to discuss a potential transaction between Paramount and Party B. During the meeting, the CEO of Party B indicated an interest in exploring a potential Party B Streaming JV subject to Party B having majority control of any such joint venture, but did not express any interest in a business combination involving all of Paramount.

On February 21, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance, to discuss several topics, including (i) Paramount management’s perspective with respect to a potential Share Reclassification Transaction, including the potential financing of any such potential Share Reclassification Transaction, (ii) a call that representatives of Paramount management held earlier that month with S&P to discuss a new industry ratings metric that S&P intended to introduce in the near term and under which Paramount’s credit ratings would be at risk of being placed on negative watch or downgraded and (iii) updates with respect to engagement with NAI, Skydance and Party A. The participants observed that Party A had not submitted a transaction proposal to date despite the exchange of confidential information and ongoing discussions between the parties and their advisors over the prior two months, and the Special Committee determined that no additional information would be shared with Party A unless and until Party A submitted a transaction proposal to Paramount.

Also on February 21, 2024, the Nominating and Governance Committee of the Paramount Board approved by written consent the compensation that each member of the Special Committee was entitled to receive in consideration for their service on the Special Committee, consisting of the Monthly Fee, the Per-Meeting Fee and the Litigation Fee. For more information, see “Interests of Affiliates in the Transactions—Interests of Paramount Affiliates in the Transactions—Special Committee Compensation” beginning on page 269 of this information statement/prospectus.

On February 23, 2024, S&P publicly announced that it had placed Paramount’s credit ratings on a negative watch, citing weak free operating cash flow generation due to the ongoing decline in linear media, the shift toward a lower margin direct-to-consumer streaming model, and competition in streaming.

Also on February 23, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance for all or part of the meeting, to discuss recent interactions with NAI, Skydance, Party A and Party B. During the meeting, the Special Committee determined that Paramount management should continue to explore the merits of the Party B Streaming JV (but that such discussions and any such transaction should not impede any other transactions involving all of Paramount) and directed the representatives of Cravath to send a draft non-disclosure agreement to representatives of Party B to facilitate further discussions regarding the Party B Streaming JV, which the representatives of Cravath did the following day. Over the course of that weekend, representatives of Cravath and Party B’s legal counsel negotiated the non-disclosure agreement, which Paramount and Party B executed on February 25, 2024. The executed non-disclosure agreement between Paramount and Party B contained a standstill provision binding Party B, with a customary exclusion which permitted Party B to make proposals to Paramount privately and confidentially and a “fallaway” provision that allowed Party B to make a proposal to acquire Paramount in the event Paramount entered into a definitive sale agreement. Thereafter and continuing into April 2024, representatives of the Special Committee, Paramount and Party B engaged in discussions and mutual due diligence regarding the Party B Streaming JV, with each of Paramount and Party B providing certain confidential information regarding its business and financial condition to the other party and its representatives.

Also at the Special Committee’s meeting on February 23, 2024, the Special Committee and its advisors discussed the viability and merits of exploring a potential Share Reclassification Transaction possibly financed by a library-backed financing transaction as had been discussed by Paramount management at the Special Committee’s meeting on February 17, 2024. The participants discussed that the implementation of a Share Reclassification Transaction would be subject to NAI’s approval and that, even if NAI were supportive of such a transaction in lieu of alternative monetization opportunities (such as an acquisition by Skydance or another third party), such a transaction likely would not be advisable for other reasons, including the high cost to obtain the requisite external financing together with Paramount’s high debt load and declining financial prospects.

 

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Representatives of Centerview also reviewed a wide range of other strategic alternatives for Paramount that a Share Reclassification Transaction could facilitate by changing the stockholder voting structure, including a potential sale of the Paramount Studios (as defined below) or other key assets of Paramount (which members of the Special Committee believed, including based on previous discussions unrelated to the current transaction process, that NAI would not support).

On February 27, 2024, news outlets reported that Paramount and WBD had been engaging in discussions regarding a potential transaction between Paramount and WBD and that WBD had terminated such discussions.

On February 28, 2024, Mr. Bakish held a call with the CEO of Party A, who stated that, while Party A remained interested in pursuing a transaction with Paramount despite having not submitted a transaction proposal to date, Party A had been in contact with NAI and believed NAI’s desire to provide cash consideration to its equityholders in any transaction, and Party A’s understanding of expectations regarding the valuation of NAI’s controlling interest in Paramount would make a transaction between Paramount and Party A challenging.

Also on February 28, 2024, news outlets reported that NAI had sold certain real estate assets and speculated that the purpose of such sale was to finance, together with funds borrowed from an existing line of credit extended by BDT, a debt payment due later that week.

On February 29, 2024, Party F, a private equity firm focused on investing in middle-market companies, sent a letter (the “February 29 Party F Proposal”) to Ms. Redstone and Mr. Bakish, in which Party F proposed to contribute the entertainment studio owned by Party F to Paramount on a debt-free basis, together with an unspecified amount of cash, in exchange for 19.9% of the outstanding shares of Paramount common stock. The February 29 Party F Proposal stated that the proposal was conditioned on all Paramount shares having equal voting rights, with a to-be-agreed premium to be paid to holders of shares of Paramount Class A common stock for relinquishing their voting rights.

On March 1, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance for all or part of the meeting. Mr. Bakish reviewed the terms of the February 29 Party F Proposal and shared his views on Party F and the proposal, and the Special Committee determined to discuss the February 29 Party F Proposal further at a subsequent meeting. The participants also discussed recent interactions with Skydance, Party A and Party B, including the recent call held between Mr. Bakish and the CEO of Party A, and they expressed skepticism regarding Party A’s intentions with respect to ongoing discussions including in light of Party A’s continued failure to submit a transaction proposal. Representatives of Centerview also reported that they had been informed by representatives of NAI and Skydance that NAI and Skydance and its affiliates were engaged in active discussions and making progress on the terms of a potential acquisition of a controlling interest in NAI by affiliates of Skydance (which terms had not yet been disclosed to Centerview).

Later that day, at the direction of the Special Committee, representatives of Centerview held a call with representatives of Party A’s financial advisor to seek to obtain additional information regarding Party A’s level of interest in a transaction with Paramount. The representatives of Party A’s financial advisor stated that Party A did not believe it was prudent to engage further regarding a potential transaction unless Party A received confirmation that NAI (in its capacity as Paramount’s controlling stockholder) would support such a transaction. During such call and in subsequent discussions with the CEO of Party A, representatives of Centerview told the representatives of Party A that they should engage directly with NAI and its advisors to seek to obtain the assurances Party A required in order to continue discussions regarding a potential transaction with Paramount. Thereafter, representatives of Cravath and Centerview conveyed to NAI’s legal and financial advisors, respectively, that Party A was seeking such assurances from NAI. Following such calls, communications between the Special Committee and its advisors, on the one hand, and Party A and its advisors, on the other hand, regarding a potential business combination between Paramount and Party A were limited, and Party A never informed the Special Committee or its advisors as to whether Party A requested such assurances from NAI and, if

 

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so, whether NAI provided Party A with the assurances it requested. Party A never submitted a proposal in respect of a business combination transaction with Paramount, despite consistent interaction over the past few months at the management and financial advisor level.

Also on March 1, 2024, the Special Committee entered into an engagement letter with Centerview to act as financial advisor to the Special Committee and memorialize the engagement that had begun on January 7, 2024. For more information about the terms of Centerview’s engagement letter, see the section entitled “—Opinion of the Special Committee’s Financial Advisor” beginning on page 154 of this information statement/prospectus.

On March 6, 2024, Party C sent a letter (the “March 6 Party C Proposal”) to Mr. Bakish expressing its interest in a potential acquisition of Paramount Pictures and certain of Paramount’s other film and television studios (excluding CBS Studios and Paramount’s other primary television studios) (collectively with Paramount Pictures, the “Paramount Studios”). The March 6 Party C Proposal included a preliminary valuation for the Paramount Studios of $11 billion.

On March 11 and March 12, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and, for the March 11 meeting, Paramount management in attendance for all or part of the meeting, to review and discuss the March 6 Party C Proposal. The participants considered various factors in assessing the viability and merits of the proposed transaction, including the credibility of Party C as a potential counterparty, the fact that, in accordance with the Paramount charter, NAI’s support was required for the proposed transaction and the impact that exploring a sale of key assets like the Paramount Studios would have on the willingness of Skydance and other parties to pursue a possible transaction for all of Paramount. The Special Committee then determined that, unless NAI stated in writing that it would not support a potential sale of the Paramount Studios (such that the transaction contemplated by the March 6 Party C Proposal would not be an actionable transaction), the Special Committee would consider and further explore the merits of such a potential transaction.

Also at the Special Committee’s meeting on March 12, 2024, the Special Committee and its advisors discussed the February 29 Party F Proposal, which, among other things, provided for the contribution of an entertainment studio and an unspecified amount of cash to Paramount in exchange for Party F receiving 19.9% of the outstanding shares of Paramount common stock. The participants considered various factors in assessing the viability and merits of the proposed transaction, including skepticism about whether the proposal was likely to advance to an actionable transaction and whether exploration of a transaction of the kind contemplated by the February 29 Party F Proposal would impede the Special Committee’s evaluation of other strategic alternatives that likely would be more attractive to Paramount and its stockholders, including any transactions involving all of Paramount. The participants also discussed other potential strategic and financial counterparties that might be interested in exploring a transaction with Paramount, including counterparties that might be interested in a potential transaction involving one or more sales of Paramount’s key assets but not any transactions involving all of Paramount.

On March 13, 2024, representatives of Centerview and Skydance held a call during which the representatives of Skydance previewed the terms of a revised transaction proposal (the “March 13 Skydance Proposal”). The March 13 Skydance Proposal (i) reduced the implied valuation of Skydance to $5.0–$5.3 billion, (ii) narrowed the range of the Transaction Class B Price to $12.00–$13.00 per share and (iii) narrowed the range of the cash investment by certain affiliates of Skydance (the “PIPE Subscription”) to $1.5–$2.0 billion, with a per-share price of the shares to be issued in connection with the PIPE Subscription of $9.50–$11.00 per share (such per-share price, the “Subscription Class B Price”). The low and high ends of the proposed Transaction Class B Price range represented an approximately 4% and 12% premium, respectively, to the closing price of the Paramount Class B common stock (of $11.59) on March 12, 2024, the most recent trading day prior to receipt of the March 13 Skydance Proposal, and the low and high ends of the proposed Subscription Class B Price range represented an approximately 21% and 15% discount, respectively, to the low and high ends of the proposed Transaction Class B Price range. During the call, the representatives of Skydance also stated that certain affiliates

 

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of Skydance were continuing to make progress with NAI on a potential acquisition of a controlling interest in NAI but did not provide any details regarding the purchase price or other potential terms of that transaction. Thereafter, representatives of Centerview communicated the terms of the March 13 Skydance Proposal and provided an update on the NAI Transaction to the Special Committee and Cravath.

On March 14, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to receive an update on the call held the day prior between Centerview and Skydance, review the terms of the March 13 Skydance Proposal and formulate a potential counterproposal. The Special Committee directed the representatives of Centerview to (and thereafter the representatives of Centerview did) communicate to Skydance that any transaction proposal in which existing Skydance investors (or their affiliates) would own a majority of the post-transaction combined company immediately following the completion of the transaction would not be acceptable unless other terms of Skydance’s current transaction proposal were improved in a manner that would increase value for the subset of Paramount stockholders which excluded the Specified Stockholders and their respective affiliates (such subset of stockholders, Paramount’s “Public Stockholders”).

On March 17, 2024, Skydance sent a letter to the Special Committee (the “March 17 Skydance Proposal”) outlining the terms of a revised transaction proposal, which modified the March 13 Skydance Proposal by (i) narrowing the range of the implied Skydance valuation to $5.0–$5.25 billion, (ii) increasing the range of the Subscription Class B Price to $10.20–$11.05 per share (representing a 15% discount to the Transaction Class B Price proposed by Skydance in the March 13 Skydance Proposal) and (iii) increasing the range of Skydance’s estimated run-rate synergies to $1.0–$2.0 billion. The March 17 Skydance Proposal also included a request for a 45-day exclusivity period and provided a draft agreement to document such exclusivity period.

On March 19 and March 20, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview, Paramount management, LionTree and Rothschild & Co in attendance for all or part of the meeting. During the meetings, the representatives of Paramount management reviewed with the Special Committee their recommendation for a multi-step plan, consisting of a streaming joint venture (such as the Party B Streaming JV) coupled with the sale of the Paramount Studios, which Paramount management indicated that they believed, in the absence of an attractive transaction for all of Paramount, would be the optimal path forward to address Paramount’s operational challenges and maximize value for Paramount and its stockholders. The representatives of Paramount management also shared the key economic terms that were under negotiation with Party B, which included, among other things, a substantial cash contribution by Paramount to fund the Party B Streaming JV. The Special Committee then met solely with its advisors to discuss the recommendation from Paramount management, observing, among other things, that the proposed multi-step plan would require NAI’s approval to implement given NAI’s voting control of Paramount and that further information should be obtained regarding NAI’s perspectives on a sale of Paramount’s key assets because it might distract or impede the Special Committee’s exploration of other potential strategic alternatives, including a transaction for all of Paramount, to pursue a plan that NAI ultimately would likely not support.

Also at the Special Committee’s meeting on March 19, 2024, the Special Committee and its advisors reviewed and discussed (i) the March 17 Skydance Proposal and a potential counterproposal and (ii) Skydance’s request that Paramount and Skydance enter into an exclusivity agreement. The Special Committee determined that the terms of the March 17 Skydance Proposal did not provide a basis on which the Special Committee would approve entry into an exclusivity agreement at the present time, which message was communicated by representatives of Centerview to representatives of Skydance following the meeting.

On March 20, 2024, news outlets reported that Apollo Global Management had submitted a proposal to acquire Paramount’s film and television studios and stated that NAI and Ms. Redstone had historically been reluctant to sell such assets and other key assets of Paramount.

On March 21, 2024, representatives of R&G informed representatives of Cravath, in response to outreach from the representatives of Cravath at the Special Committee’s direction, that NAI did not find the March 6 Party

 

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C Proposal compelling, but that NAI would consider any transaction that maximizes value for all Paramount stockholders.

Between March 21 and April 2, 2024, as described below, the Special Committee and its advisors (at the direction of the Special Committee) sought to clarify NAI’s position with respect to the various transaction proposals made by Party C during such period in light of NAI’s right, in accordance with the Paramount charter, to withhold approval of any such transaction and the Special Committee’s perception (informed by prior interactions with NAI) that NAI might not support such proposals, and NAI responded to such inquiries.

Also on March 21, 2024, representatives of Skydance conveyed a revised proposal to representatives of Centerview (the “March 21 Skydance Proposal”), which revised the terms of the March 17 Skydance Proposal by (i) increasing the range of the Transaction Class B Price to $13.00–$14.00 per share, (ii) proposing a collar that would ensure that the value of the shares of New Paramount Class B common stock to be received in respect of Paramount’s acquisition of Skydance would be no less than $5.0 billion at the time of the closing of the transaction and (iii) fixing the amount of the PIPE Subscription at $2.0 billion, with the range for the Subscription Class B Price decreased to $10.00–$11.00 per share. The low and high ends of the proposed Transaction Class B Price range represented an approximately 16% and 25% premium, respectively, to the closing price of the Paramount Class B common stock (of $11.19) on March 19, 2024, the most recent trading day prior to market speculation that Apollo Global Management had submitted a proposal to acquire Paramount’s film and television studios, and the low and high ends of the proposed Subscription Class B Price range represented an approximately 23% and 21% discount, respectively, to the low and high ends of the proposed Transaction Class B Price range. Thereafter, representatives of Centerview communicated the terms of the March 21 Skydance Proposal to the Special Committee and Cravath.

Following reports that Apollo Global Management had submitted a proposal to acquire Paramount’s film and television studios, representatives of Party G and representatives of Party H, each a strategic counterparty, contacted representatives of Centerview to express such party’s interest in a potential acquisition of such studios (but not a transaction involving all of Paramount).

On March 22, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance. The participants reviewed and discussed the March 6 Party C Proposal, and the Special Committee determined to continue to explore the potential merits of the transaction proposed by Party C. The participants also reviewed and discussed the March 21 Skydance Proposal and a potential counterproposal, following which the Special Committee directed the representatives of Centerview to communicate to Skydance that it needed to improve the terms of the March 21 Skydance Proposal, including by (i) providing cash consideration to Paramount’s Public Stockholders and (ii) increasing the Transaction Class B Price and the Subscription Class B Price.

Later that day, representatives of R&G informed representatives of Cravath, in response to a further inquiry from representatives of Cravath at the Special Committee’s direction, that NAI would not support the sale of the Paramount Studios at any value close to the valuation included in the March 6 Party C Proposal, on the basis that NAI did not believe such a transaction would maximize value for Paramount stockholders.

Also on March 22, 2024, representatives of Centerview contacted representatives of Skydance to communicate the message from the Special Committee in response to the March 21 Skydance Proposal. Later that day, representatives of Skydance verbally communicated to representatives of Centerview a revised transaction proposal (the “March 22 Skydance Proposal”), which (i) fixed the implied Skydance valuation at $5.0 billion to ensure that the value of the shares of New Paramount Class B common stock to be received in respect of Paramount’s acquisition of Skydance would be no less than $5.0 billion at the time of the closing of the transaction, (ii) increased the range of the Transaction Class B Price to $14.00–$15.00 per share and (iii) increased the range of the Subscription Class B Price to $11.00–$12.00 per share. The low and high ends of the proposed Transaction Class B Price range represented an approximately 18% and 27% premium,

 

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respectively, to the closing price of the Paramount Class B common stock (of $11.82) on March 21, 2024, the most recent trading day prior to receipt of the March 22 Skydance Proposal, and the low and high ends of the proposed Subscription Class B Price range represented an approximately 21% and 20% discount, respectively, to the low and high ends of the proposed Transaction Class B Price range. During the call, the representatives of Skydance also (A) reiterated their request that Paramount and Skydance enter into an exclusivity agreement providing for an exclusivity period of 45 days and (B) requested an opportunity to meet with members of the Special Committee to provide more information to the Special Committee regarding Skydance’s business and matters relating to its transaction proposal. Thereafter, representatives of Centerview communicated the terms of the March 22 Skydance Proposal to the Special Committee and Cravath.

On March 23, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance for all or part of the meeting, to review and discuss (i) the correspondence received from R&G the day prior and (ii) the March 22 Skydance Proposal. The Special Committee directed the representatives of Cravath to continue to seek to further clarify NAI’s position with respect to a transaction involving Party C, including whether the correspondence from R&G the day prior was intended to be specific to Party C or apply to any sale of the Paramount Studios. The participants also discussed the advantages and disadvantages of an exclusivity agreement with Skydance, following which the Special Committee determined to continue to reject such request but directed Cravath to prepare a revised draft of the exclusivity agreement provided by Skydance in the event the Special Committee ultimately determined to approve the entry into an exclusivity agreement with Skydance.

Also on March 23, 2024, Party C sent a letter (the “March 23 Party C Proposal”) to the Special Committee, which reiterated Party C’s interest in an acquisition of the Paramount Studios and also proposed that Party C would provide $2.5-$3.0 billion to Paramount to facilitate the purchase of all of the shares of Paramount Class A common stock (or potentially all shares of Paramount common stock) owned by NAI as well as the shares of Paramount Class A common stock owned by other stockholders to the extent such other stockholders desired to sell such shares as part of the transaction. The March 23 Party C Proposal also stated that Party C believed it could partner with other parties (whom Party C did not identify) with respect to a potential transaction for all of Paramount, but provided no other terms or details regarding such a transaction.

On March 24, 2024, representatives of R&G informed representatives of Cravath, in response to a further inquiry from representatives of Cravath at the Special Committee’s direction, that NAI’s position with respect to the March 6 Party C Proposal was not specific to Party C but rather to the nature of the transaction proposed by Party C (an acquisition of the Paramount Studios) and that NAI would not support a sale of the Paramount Studios to any potential buyer at a price even twice the $11 billion valuation proposed in the March 6 Party C Proposal.

Also on March 24, 2024, members of the Special Committee met via videoconference with David Ellison, the CEO of Skydance, Andy Gordon, Partner of RedBird, and Jeffrey Shell, Chairman, Sports & Media of RedBird, during which the representatives of Skydance and RedBird provided an overview of Skydance’s business and financial condition and reviewed the terms of Skydance’s transaction proposal and their perspectives on the strategic and financial outlook for a post-transaction combined company.

On March 25, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to (i) summarize the meeting that members of the Special Committee held with representatives of Skydance and RedBird the day prior and (ii) review and discuss the March 23 Party C Proposal and the correspondence received from R&G the day prior. The participants observed that the March 23 Party C Proposal continued to contemplate an acquisition of the Paramount Studios that was not actionable given NAI’s lack of support. However, the Special Committee determined that the tentative reference in the March 23 Party C Proposal to a possible transaction involving all of Paramount merited further exploration prior to any decision to enter into an exclusivity agreement with Skydance.

 

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Later that day, representatives of R&G informed representatives of Cravath, in response to further inquiries from representatives of Cravath at the Special Committee’s direction and R&G’s review of the March 23 Party C Proposal, that NAI continued to believe that the Paramount Studios, which the representatives of R&G referred to as Paramount’s “crown jewel asset,” were critical to Paramount’s long-term strategy and success and that a sale of the Paramount Studios was not in the long-term best interests of Paramount and its stockholders.

On March 26, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance for all or part of the meeting, to review (i) the correspondence received from R&G the day prior and (ii) a proposed revised draft of the Skydance exclusivity agreement which Cravath had prepared at the Special Committee’s direction on March 23, 2024, and which, among other things, (A) reduced the duration of the exclusivity period from 45 days to 15 days, with an automatic 15-day extension so long as the day prior to the end of the initial 15-day period Skydance confirmed that it was continuing good faith negotiations regarding the transaction on terms no less favorable to Paramount than those set forth in the March 22 Skydance Proposal, and (B) included an exception that would permit Paramount to continue to pursue a potential joint venture involving its streaming business (such as the Party B Streaming JV) during the exclusivity period. The Special Committee then directed the representatives of Cravath to send the revised draft of the exclusivity agreement to representatives of Latham while the Special Committee awaited a possible revised transaction proposal from Party C, which the representatives of Cravath did the following day.

Later on March 26, 2024, Party C sent a letter (the “March 26 Party C Proposal”) to the Special Committee expressing its interest in pursuing an acquisition of all of Paramount. The March 26 Party C Proposal did not include any proposed financial, structural or other terms of such a transaction, including sources of capital.

On March 27, 2024, representatives of Centerview held a call with representatives of BDT, who stated, among other things, that (i) the NAI assets proposed to be acquired by Skydance affiliates would continue to be held separate from Paramount’s assets following the closing of the potential transaction and (ii) in the event Paramount entered into an exclusivity agreement with Skydance, NAI would also enter into an exclusivity agreement with Skydance. The representatives of BDT did not provide the specific economic terms under discussion between NAI and Skydance and its affiliates, but they acknowledged that the Special Committee would ultimately need to receive that information as part of its review of the potential transaction with Skydance.

Also on March 27, 2024, S&P lowered Paramount’s credit ratings from “BBB-” to “BB+” (one level below investment grade) through 2025, citing weak free operating cash flow generation due to the decline of Paramount’s credit metrics resulting from ongoing decline in linear media and the shift toward a more competitive and less certain streaming model. S&P also suggested that additional downgrades could occur if Paramount’s business continued to decline.

On March 28, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to review and discuss the March 26 Party C Proposal and the conversation held with representatives of BDT the day prior. The participants observed that (i) the March 26 Party C Proposal did not provide any financial terms or other information that would enable the Special Committee and its advisors to evaluate the acquisition involving all of Paramount proposed by Party C and (ii) the continued omission of concrete transaction terms in Party C’s various letters was uncharacteristic for Party C and led the Special Committee and its advisors to question the seriousness of Party C’s interest in the transactions being proposed. The Special Committee directed the representatives of Centerview to inform representatives of Party C that the Special Committee would require a more specific proposal containing financial terms for a potential acquisition involving all of Paramount in order to assess the merits of such a transaction, and the Special Committee determined not to make any final decisions with respect to entering into an exclusivity agreement with Skydance until Party C responded to such request.

On March 29, 2024, representatives of Centerview held a call with representatives of BDT, who stated that NAI was exploring three potential transactions—the transaction with affiliates of Skydance and two separate

 

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indications of interest from other parties (whom BDT did not identify) that had expressed interest in NAI-only transactions—and that each such transaction would provide cash consideration to NAI’s equityholders of approximately $2-3 billion. The representatives of BDT also stated that the then-current terms under discussion between NAI and certain affiliates of Skydance contemplated that Ms. Redstone and possibly other affiliates of the Redstone family would retain a minority stake in NAI following the closing of the transaction.

Also on March 29, 2024, a representative of Party I, a strategic counterparty, contacted a representative of Centerview to express Party I’s preliminary interest in a possible Reverse Morris Trust transaction involving a limited subset of Paramount’s assets. The representative of Party I indicated that Party I would contact the representative of Centerview again if Party I wished to pursue such a transaction. There was no further communication between representatives of Centerview and representatives of Party I following such initial call.

On March 30, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss various matters related to a potential transaction with Skydance, including the call held between representatives of Centerview and BDT the day prior during which the representatives of Centerview were informed that NAI was exploring NAI-only transactions in addition to a transaction with certain affiliates of Skydance. The participants also discussed a revised draft of the exclusivity agreement received from representatives of Latham at Skydance’s direction on March 28, 2024, which, among other things, increased the duration of the exclusivity period to 30 days and deleted the exception that would have permitted Paramount to continue to pursue a joint venture involving its streaming business (such as the Party B Streaming JV) during the exclusivity period. Representatives of Centerview also summarized the call they had received the day prior from a representative of Party I.

Later that day, the Special Committee met on two additional occasions via videoconference, first with representatives of Cravath, Centerview and Paramount management in attendance for all or part of the meeting and second solely with representatives of Cravath and Centerview in attendance. In the first meeting, Mr. Bakish provided an update on the Party B Streaming JV to assist the Special Committee with its consideration of Skydance’s revised exclusivity agreement. The Special Committee then determined that certain upcoming meetings between Paramount management and Party B management regarding the Party B Streaming JV should be cancelled in light of the Special Committee’s broader exploration of strategic alternatives and the possibility that an exclusivity agreement would be entered into in the near term that might foreclose discussions related to the Party B Streaming JV for a period of time. The Special Committee also determined that it would continue to reject Skydance’s request for an exclusivity agreement between Paramount and Skydance until after Party C submitted a revised transaction proposal containing the additional specificity requested by the Special Committee (as communicated by representatives of Centerview to representatives of Party C on March 28, 2024).

Also on March 30, 2024, members of the Special Committee held a call with Ms. Redstone to learn her perspective on (i) the Party B Streaming JV, which the Special Committee believed was not on its own a strategic transaction exclusively within the purview of the Special Committee (among other reasons, because the Party B Streaming JV did not involve a conflict of interest with NAI), and (ii) the potential exclusivity agreement with Skydance in light of NAI’s stated willingness to enter into a parallel exclusivity agreement if the Special Committee decided to enter into exclusive negotiations with Skydance and its affiliates. During the call, Ms. Redstone provided her perspective that even though it would require NAI to terminate all NAI-only Transaction discussions, and Paramount’s discussions with Party B, if the Special Committee remained interested in exploring a transaction with Skydance and its affiliates for the benefit of Paramount stockholders, she would support Paramount entering into exclusive negotiations with Skydance so that they could continue those discussions.

On March 31, 2024, Party C sent a letter (the “March 31 Party C Proposal”) to the Special Committee reiterating its interest in an acquisition of all of Paramount. The March 31 Party C Proposal included a preliminary, indicative valuation for Paramount at an enterprise value of $26.0-27.0 billion. The March 31 Party C Proposal indicated that Party C expected the proposed transaction would be on customary terms and conditions

 

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for a transaction of its nature and would not result in an acceleration of, or mandatory repurchase offer with respect to, the vast majority of Paramount’s outstanding indebtedness in accordance with the terms of such indebtedness (i.e., in light of the S&P downgrade). The March 31 Party C Proposal did not include other proposed terms of the transaction, including any details regarding how the acquisition would be financed and the allocation of the consideration between Paramount Class A common stock and Paramount Class B common stock.

On April 1, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to review and discuss the March 31 Party C Proposal. The participants observed that the March 31 Party C Proposal continued to describe the proposed transaction in a very preliminary manner and that the lack of specific detail suggested a lack of urgency by Party C in light of the fact that there had been significant media attention regarding the extent of Skydance’s active engagement with Paramount and NAI on a potential transaction. The participants also observed that the March 31 Party C Proposal included a proposed enterprise value for an acquisition of all of Paramount but not a per-share price or an allocation of consideration between the holders of Paramount’s Class A common stock and the holders of Paramount’s Class B common stock, such that the Special Committee could not determine how much cash would be provided to Paramount’s Public Stockholders in the proposed transaction. The participants also discussed the March 31 Party C Proposal in the context of the request for exclusivity from Skydance, observing that the Special Committee would need to make a decision in the near term as to whether to (i) enter into an exclusivity agreement with Skydance (the only other party proposing a transaction involving all of Paramount at such time) or (ii) forgo exclusivity to explore the preliminary proposal from Party C and accept the risk that Skydance would abandon its transaction proposal as representatives of Skydance had stated it would do, with no other actionable transaction alternatives on the table despite news outlets reporting on the strategic review process for months.

Later that day, representatives of Cravath, at the Special Committee’s direction, requested NAI’s view of the March 31 Party C Proposal. Representatives of R&G informed representatives of Cravath, in response to such request, that NAI viewed the March 31 Party C Proposal as preliminary and not an actionable offer and believed the March 31 Party C Proposal did not warrant the risk of Skydance walking away from the proposed transaction if the Special Committee declined to enter into an exclusivity agreement with Skydance, which NAI believed was a credible risk.

On April 2, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to further review and discuss the March 31 Party C Proposal and Skydance’s request for an exclusivity agreement between Paramount and Skydance.

Later that day, representatives of R&G informed representatives of Cravath, in response to further inquiries from representatives of Cravath at the Special Committee’s direction, that, for the reasons stated in its prior correspondence, NAI continued to believe that the March 31 Party C Proposal did not warrant further consideration at the present time.

Also on April 2, 2024, news outlets reported that Paramount was considering a possible exclusivity agreement with Skydance.

Later on April 2, 2024, Party C sent a letter (the “April 2 Party C Proposal”) to the Special Committee reiterating its interest in an acquisition of all of Paramount. The April 2 Party C Proposal clarified certain of the proposed terms of the potential transaction, including stating that the purchase price would be paid in cash at closing and that Party C had sufficient capital to fund 100% of the equity for the proposed transaction. However, the April 2 Party C Proposal, among other things, continued to omit any details regarding the allocation of the consideration between Paramount Class A common stock and Paramount Class B common stock.

On April 3, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to review and discuss the April 2 Party C Proposal, the correspondence received from

 

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R&G the day prior and Skydance’s request for an exclusivity agreement between Paramount and Skydance. The participants observed that the April 2 Party C Proposal provided some incremental elaboration of proposed terms but continued to omit certain key details that would enable the Special Committee to determine the consideration that would be provided to Paramount’s Public Stockholders in the proposed transaction and also suggested that Party C had not been engaging meaningfully with NAI regarding the proposal to understand NAI’s priorities for a transaction. The participants also observed that (i) the potential transaction with Skydance (the only other party proposing a transaction involving all of Paramount at such time) likely involved a higher degree of actionability given NAI’s engagement with Skydance and (ii) the proposal from Party C carried greater risk for a variety of reasons including if Skydance were to abandon its transaction proposal as representatives of Skydance had continued to state it would do absent exclusivity in the near term. Among the other factors the Special Committee considered was that if Party C did make an attractive proposal during the limited exclusivity period, then the Special Committee could pursue such alternative following the end of the exclusivity period, whereas if it continued to wait for Party C to present a more complete proposal, it could wind up in a worse position as Skydance could believe that Paramount did not have an available alternative proposal or could follow through on its statements that it would walk away from pursuing a transaction. The representatives of Cravath reviewed potential terms of the exclusivity agreement with Skydance, including the Special Committee’s proposal to shorten the duration of the exclusivity period from 30 days, as in the prior draft that Latham sent on March 28, 2024, to 20 days with an automatic 10-day extension so long as the day prior to the end of the initial 20-day period Skydance confirmed that it was continuing good faith negotiations regarding the transaction on terms no less favorable to Paramount than those set forth in the March 22 Skydance Proposal. The Special Committee then approved the entry into an exclusivity agreement with Skydance on such terms and a Limited DGCL 203 Waiver in respect of such exclusivity agreement and the parallel exclusivity agreement to be entered into between NAI and Skydance.

Following the meeting on April 3, 2024, at the direction of the Special Committee, Paramount entered into an agreement (the “Exclusivity Agreement”) with Skydance, pursuant to which Paramount agreed not to, among other things, engage in discussions or negotiations with any party other than Skydance and its representatives for a period of 20 days from the date of the Exclusivity Agreement, subject to a 10-day extension if Skydance confirmed in writing that it was continuing to engage in good faith negotiations on terms no less favorable to Paramount than those set forth in the March 22 Skydance Proposal.

Between April 3, 2024, when the exclusivity period under the Exclusivity Agreement commenced, and May 3, 2024, when the exclusivity period under the Exclusivity Agreement concluded, the Special Committee, Paramount, Skydance and their respective advisors engaged in a mutual due diligence process involving numerous meetings with management of Paramount and Skydance and a review of materials made available by each of Paramount and Skydance in virtual data rooms.

On April 4, 2024, each of Mses. Ostroff and Seligman resigned from the Special Committee, effective as of such date, in anticipation of not standing for re-election at the 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”).

On April 6, 2024, at the request of the Special Committee in light of the number of meetings of the Special Committee that had taken place to date and that were anticipated to be held in the future, the Nominating and Governance Committee of the Paramount Board, consisting of Mses. Schuman and Ostroff and Mr. Phillips, approved by written consent the removal of the Per-Meeting Fee (but not the Monthly Fee or the Litigation Fee) that the members of the Special Committee were entitled to receive in consideration for their service on the Special Committee. For more information, see “Interests of Affiliates in the Transactions—Interests of Paramount Affiliates in the Transactions—Special Committee Compensation” beginning on page 269 of this information statement/prospectus.

On April 6, April 9, April 10 and April 12, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview and, on April 10 and April 12, representatives of Paramount

 

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management in attendance for all or part of the meetings, to discuss various matters related to a potential transaction with Skydance, including (i) legal considerations and the duties of the members of the Special Committee in the context of a transaction involving NAI, (ii) the mutual due diligence process and (iii) means of improving the economic terms of Skydance’s transaction proposal for Paramount’s Public Stockholders, including by increasing the cash consideration payable to Paramount’s Public Stockholders and/or strengthening the balance sheet of the post-transaction combined company.

On April 8 and April 10, 2024, the Nominating and Governance Committee of the Paramount Board and the Paramount Board each met via videoconference and, respectively, adopted resolutions approving the slate of directors for the 2024 director nomination process, which did not include Mr. Klieger and three members of the Special Committee (Mses. Ostroff and Seligman and Mr. Terrell).

Also at the Paramount Board meeting on April 10, 2024, the non-management directors of the Paramount Board discussed certain operational matters unrelated to a potential transaction. During the meeting, Ms. Redstone read a statement acknowledging the potential transaction with Skydance and reaffirming that the Special Committee should exercise its independent judgment as to whether a transaction with Skydance was ultimately in the best interests of Paramount and its stockholders and that NAI would respect the Special Committee’s decision. In her statement, Ms. Redstone also noted that the strategic review process had been complicated by the fact that Paramount had been going through challenging times. During the meeting, the non-management directors also discussed the potential departure of Mr. Bakish from his role as CEO of Paramount.

At the Special Committee’s meeting later that day, with representatives of Cravath, Centerview and Paramount management in attendance for all or part of the meeting, the Special Committee authorized Mr. Bakish to meet with Mr. Ellison at Mr. Ellison’s request, subject to restrictions on discussing the financial terms of the transaction or any role that Mr. Bakish might have with the post-transaction combined company. The Special Committee also determined to engage an independent consulting firm to assist with analyzing the potential integration synergies in a transaction with Skydance.

On April 11, 2024, Messrs. Bakish and Ellison met in person and discussed, among other matters, perspectives on Paramount’s prospects, upcoming distributor renewals and certain aspects of Skydance’s due diligence of Paramount. Consistent with the Special Committee’s directions, they did not discuss financial terms of the potential transaction between Paramount and Skydance or any role that Mr. Bakish might have with the post-transaction combined company.

Also on April 11, 2024, the CEO of Party A contacted a representative of Centerview to state that Party A continued to believe there was strategic merit to a business combination between Party A and Paramount. The CEO of Party A also stated that any transaction between Paramount and Party A would not include any cash consideration.

Additionally, on April 11, 2024, representatives of Centerview held a call with representatives of Skydance and RedBird to discuss various matters related to a potential transaction between Paramount and Skydance, including the mutual due diligence process and the economic terms of the March 22 Skydance Proposal. The representatives of Centerview, at the direction of the Special Committee, emphasized that (i) the entry into the Exclusivity Agreement did not mean that the Special Committee had approved any transaction, (ii) the economic terms of the March 22 Skydance Proposal would need to be substantially improved in order to form the basis of a transaction that the Special Committee might approve and (iii) the Special Committee would not approve any transaction with Skydance unless it understood the terms of the proposed transaction between affiliates of Skydance and NAI.

On April 12, 2024, representatives of Latham sent to representatives of Cravath an initial draft of the Transaction Agreement (the “April 12 Draft Transaction Agreement”) and an initial draft of a form of the

 

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Subscription Agreements. The April 12 Draft Transaction Agreement contemplated, among other things, (i) no majority-of-the-minority vote condition, (ii) a “no-shop” provision prohibiting Paramount and its representatives from soliciting alternative acquisition proposals following the signing of the Transaction Agreement, (iii) conversion of Skydance membership units into a number of shares of New Paramount Class B common stock to be determined based on the 10-day volume-weighted average price of the shares of Paramount Class B common stock at the time of the closing of the transaction with a value of at least $5.0 billion, (iv) no cash consideration to Paramount’s Public Stockholders and (v) the New Paramount Board being comprised of 12 to 13 members with up to three independent directors solely to the extent required by law. The form of the Subscription Agreements contemplated, among other things, a commitment fee in an amount to be determined which would be payable to the subscribing Skydance affiliates and which would reduce the aggregate amount of the proceeds received by Paramount in connection with the PIPE Subscription.

At the Special Committee’s meeting later that day, Mr. Bakish summarized the conversation he held with Mr. Ellison the day prior, and representatives of Centerview summarized the conversations they held with representatives of Skydance and RedBird, as well as the outreach from the CEO of Party A, the day prior.

On April 14, 2024, Mr. Ellison and Mr. Gordon met with members of the Special Committee to review the economic terms of the March 22 Skydance Proposal and other aspects of a potential transaction between Paramount and Skydance. During the meeting, Mr. Ellison noted that the due diligence process had been proceeding at a slow pace, that key due diligence information had not been provided and that, therefore, Skydance would be requesting an extension of the exclusivity period to facilitate further due diligence.

On April 16 and April 17, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss the March 22 Skydance Proposal and formulate a potential counterproposal. The participants considered various revisions to the March 22 Skydance Proposal that might enhance the value of the potential transaction for Paramount’s Public Stockholders, and the Special Committee directed the representatives of Centerview to seek to improve the economic terms of the March 22 Skydance Proposal, including by informing the representatives of Skydance that any transaction would require more cash consideration than Skydance had proposed to date, including to provide cash proceeds to Paramount’s Public Stockholders. Representatives of Cravath also reviewed with the Special Committee certain non-economic terms of a potential transaction that the Special Committee would seek to negotiate for, including a majority-of-the-minority vote condition.

Also on April 17, 2024, representatives of Centerview held a call with representatives of Skydance to discuss the following potential revisions to the March 22 Skydance Proposal: (i) an increase in the aggregate cash contribution by affiliates of Skydance from $2.0 billion to $3.25 billion; (ii) a reduction in the implied valuation of Skydance from $5.0 billion to $4.5 billion; (iii) the removal of the collar that was previously added to ensure that the value of the shares of New Paramount Class B common stock to be received in respect of Paramount’s acquisition of Skydance would be no less than $5.0 billion at the time of the closing of the transaction, (iv) an increase in the Transaction Class B Price from $14.00-$15.00 per share to $15.00 per share; (v) an increase in the Subscription Class B Price from $11.00–$12.00 per share to $15.00 per share and (vi) a potential one-time $2.25 billion payment to be paid to Paramount’s Public Stockholders. The proposed Transaction Class B Price represented an approximately 44% premium to the closing price of the Paramount Class B common stock (of $10.43) on April 16, 2024, the most recent trading day prior to such call. Consistent with the Special Committee’s directions, the representatives of Centerview informed the representatives of Skydance that the counterproposal was being provided for discussion purposes only and did not necessarily form a basis on which the Special Committee would be willing to approve a transaction.

Additionally, on April 17, 2024, a representative of Party F contacted Ms. Redstone to reiterate Party F’s interest in pursuing the transaction proposed in the February 29 Party F Proposal involving, among other things, the contribution of the entertainment studio owned by Party F and an unspecified amount of cash in exchange for 19.9% of the outstanding shares of Paramount common stock. Representatives of R&G notified representatives

 

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of Cravath of such outreach and stated that Ms. Redstone did not intend to respond to the representative of Party F.

On April 22, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and the Special Committee’s public relations advisor in attendance for all or part of the meeting, to discuss (i) communications matters related to the Special Committee’s highly publicized exploration of strategic alternatives, (ii) legal considerations and the duties of the members of the Special Committee in the context of a transaction involving NAI, (iii) next steps as part of the Special Committee’s strategic review process, including a discussion of Paramount’s prospects as a standalone company (and risks related thereto) and alternative transactions the Special Committee could potentially explore, and (iv) certain terms of the April 12 Draft Transaction Agreement, including the proposed transaction structure, the absence of a majority-of-the-minority vote condition, deal protection provisions and post-closing governance arrangements.

Also on April 22, 2024, representatives of Latham, on behalf of Skydance, notified the Special Committee that Skydance was continuing good faith negotiations regarding the potential transaction on terms no less favorable to Paramount than those set forth in the March 22 Skydance Proposal and, therefore, pursuant to the terms of the Exclusivity Agreement, the exclusivity period would be extended through May 3, 2024.

On April 24, 2024, Skydance submitted a revised transaction proposal (the “April 24 Skydance Proposal”) to the Special Committee, which provided that (i) the implied valuation of Skydance would be $5.0 billion, with a collar to ensure that the value of the shares of New Paramount Class B common stock to be received in respect of Paramount’s acquisition of Skydance would be no less than $5.0 billion at the time of the closing of the transaction, (ii) the Transaction Class B Price would be $14.00–$15.00 per share, (iii) holders of Paramount Class B common stock that are Public Stockholders would be entitled to elect to receive a portion of their merger consideration in cash, up to a maximum aggregate amount for all elections of $1.0 billion, pricing each share of Paramount Class B common stock at $13.00-$14.00 per share for purposes of such election, (iv) the amount of the PIPE Subscription would be $2.0 billion, (v) the Subscription Class B Price would be $11.00–$12.00 per share and (vi) Skydance affiliates would receive warrants to acquire, in the aggregate, 150 million shares of New Paramount Class B common stock with a strike price of $30 per share (subject to customary anti-dilution adjustments) and a four-year expiration. The low and high ends of the proposed Transaction Class B Price range represented an approximately 9.9% and 18% premium, respectively, to the closing price of the Paramount Class B common stock (of $12.74) on April 23, 2024, the most recent trading day prior to receipt of the April 24 Skydance Proposal, and the low and high ends of the proposed Subscription Class B Price range represented an approximately 21% and 20% discount, respectively, to the low and high ends of the proposed Transaction Class B Price range. The April 24 Skydance Proposal stated that the proposal was subject to a commitment from the Special Committee to extend the exclusivity period by an additional 15 days through May 18, 2024 and further engagement by Paramount on due diligence and the transaction documents.

Later that day, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance for all or part of the meeting, to review Paramount’s then-current internal financial forecasts, reflecting Paramount management’s financial forecasts for Paramount on a standalone basis for fiscal years 2024 through 2028 (the “Paramount April 2024 Financial Forecasts”). The Special Committee directed the representatives of Centerview to share the Paramount April 2024 Financial Forecasts with representatives of Skydance, which the representatives of Centerview did following the meeting. For more information about the Paramount April 2024 Financial Forecasts, see the section entitled “—Certain Unaudited Prospective Financial Information—Paramount Unaudited Prospective Financial Information” beginning on page 149 of this information statement/prospectus.

On April 25, 2024, news outlets reported that Apollo Global Management and Sony Pictures had held preliminary discussions with respect to a potential joint proposal to acquire all of Paramount.

 

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On April 26, 2024, representatives of Paramount management, Centerview, Cravath, Rothschild & Co, Skydance and certain investors in Skydance, including RedBird, met via videoconference to review the Paramount April 2024 Financial Forecasts.

On April 26 and April 27, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to review and discuss the April 24 Skydance Proposal, potential counterproposals and Skydance’s request to extend the exclusivity period. Following such meetings, at the direction of the Special Committee, representatives of Centerview and Cravath communicated to representatives of Skydance and Latham, respectively, that the economic terms set forth in the April 24 Skydance Proposal, including the amount of cash consideration available to Public Stockholders, did not form a basis on which the Special Committee would be willing to extend the exclusivity period. Representatives of Cravath also identified for representatives of Latham certain non-economic terms of the April 12 Draft Transaction Agreement that would need to be negotiated between the parties, including with respect to the absence of a majority-of-the-minority vote condition, the proposed deal protection provisions and the proposed post-closing governance arrangements.

On April 28, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview, Skydance and RedBird in attendance for all or part of the meeting. During the meeting, the representatives of Skydance and RedBird described the terms of a revised transaction proposal (the “April 28 Skydance Proposal”), which the representatives of Skydance and RedBird later communicated in writing to representatives of Cravath and Centerview together with a reiteration of the request for an extension of exclusivity through May 18, 2024. The April 28 Skydance Proposal provided for (i) increasing the aggregate amount of committed capital to $3.0 billion (with the allocation of cash proceeds to Paramount’s balance sheet versus consideration for Paramount’s Public Stockholders to be mutually agreed), (ii) aligning the Transaction Class B Price and the Subscription Class B Price at $14.00 per share, (iii) a minimum implied valuation of Skydance of $5.0 billion and (iv) issuing two tranches of warrants to certain Skydance investors, one with a strike price of $20.00 per share and the other with a strike price of $30.00 per share (with the parties subsequently discovering on June 1, 2024, as noted below, that the parties were not aligned with respect to whether the proposal contemplated two tranches of 200 million warrants or two tranches of $200 million of warrants). The proposed Transaction Class B Price represented an approximately 18% premium to the closing price of the Paramount Class B common stock (of $11.91) on April 26, 2024, the most recent trading day prior to receipt of the April 28 Skydance Proposal. The representatives of Skydance and RedBird also stated that the increase in capital commitments contemplated by the April 28 Skydance Proposal was contingent on a reduction in the transaction consideration previously proposed to be paid to equityholders of NAI in the transaction between NAI and Skydance, and, therefore, the improved terms of the April 28 Skydance Proposal were contingent on NAI approving a change in the transaction consideration previously proposed to be paid to NAI equityholders.

Following the Special Committee’s meeting on April 28, 2024, members of the Special Committee and representatives of Centerview (at the Special Committee’s direction) contacted representatives of NAI and BDT, respectively, to seek to obtain additional information about the proposed transaction between NAI and affiliates of Skydance, including in light of the statement made by representatives of Skydance and RedBird regarding the reduction in transaction consideration previously proposed to be paid to NAI equityholders. The representatives of NAI and BDT declined to share information about the economic terms of the transaction between NAI and the Skydance affiliates at that time, stating such information would be provided pursuant to a non-disclosure agreement if the Special Committee indicated that it intended to continue negotiations with Skydance after the end of the exclusivity period. The following day, at the direction of the Special Committee, representatives of Cravath sent to representatives of R&G a draft non-disclosure agreement to facilitate the sharing of information between the parties with respect to a potential transaction among Paramount, NAI and Skydance, which was executed by Paramount and NAI on May 1, 2024.

Later on April 28, 2024, the Special Committee met again via videoconference, with representatives of Cravath and Centerview in attendance, to further review and discuss the April 28 Skydance Proposal, potential

 

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counterproposals and whether the revised terms in such counterproposals would be sufficient for the Special Committee to consider extending exclusivity past its scheduled expiration on May 3, 2024. Although the Special Committee acknowledged that the economic terms of Skydance’s transaction proposals had significantly improved over the past several months, and in particular most recently in the April 28 Skydance Proposal, the Special Committee determined that the then-current terms did not form a basis on which the Special Committee was prepared to extend the exclusivity period with Skydance. The participants discussed the possibility of further revisions to the April 28 Skydance Proposal and whether such revisions, if included by Skydance in its next transaction proposal, might be sufficient for the Special Committee to consider an extension of the exclusivity period.

On April 29, 2024, Paramount announced, and news outlets reported, that (i) Mr. Bakish was stepping down from his role as CEO of Paramount and from the Paramount Board and (ii) Paramount had established an Office of the CEO (the “Office of the CEO”), consisting of three senior company executives: George Cheeks, President and CEO of CBS; Chris McCarthy, President and CEO, Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, President and CEO of Paramount Pictures and Nickelodeon.

On April 30, 2024, Paramount entered into engagement letters with each of Rothschild & Co and LionTree to act as financial advisors to Paramount and memorialize the engagements that had begun in December 2023.

On May 1, 2024, representatives of Centerview and BDT held a call to discuss the economic terms of the potential transaction between NAI and affiliates of Skydance.

Also on May 1, 2024, Party C and Party H jointly submitted a written, non-binding letter of interest (the “May 1 Party C/Party H Proposal”) to the Special Committee, expressing their joint interest in a potential all-cash acquisition of all of the issued and outstanding shares of Paramount Class A common stock and Paramount Class B common stock for $28.00 and $17.00 per share, respectively. The proposed per-share prices represented an approximately 35% premium to the closing price of the Paramount Class A common stock (of $20.69) and an approximately 49% premium to the closing price of the Paramount Class B common stock (of $11.39) on April 30, 2024, the most recent trading day prior to receipt of the May 1 Party C/Party H Proposal. The May 1 Party C/Party H Proposal also stated that (i) Party C and Party H had concurrently submitted a letter to NAI, in which they offered to acquire all of the shares of Paramount common stock owned by NAI and Ms. Redstone for aggregate consideration of $1.8 billion in cash and (ii) if requested by the Special Committee and acceptable to NAI and Ms. Redstone, Party C and Party H were prepared to reallocate transaction consideration between NAI and Ms. Redstone, on the one hand, and Paramount’s Public Stockholders, on the other hand.

The following day, news outlets reported that Paramount had received a proposal from Apollo Global Management and Sony Pictures for an acquisition of all of Paramount in exchange for approximately $26 billion in cash.

On May 2, 2024, representatives of Centerview held a call with representatives of BDT to discuss the status of NAI’s sale process, including the potential transactions involving Paramount, NAI, Skydance and certain of Skydance’s affiliates. The representatives of BDT stated that (i) NAI could potentially be flexible with respect to the transaction consideration payable to NAI equityholders pursuant to the latest proposal Skydance and its affiliates had made to NAI and (ii) NAI had received proposals for multiple NAI-only transactions from counterparties (whom BDT did not identify) offering higher valuations of NAI than the valuation of NAI in the latest proposal Skydance and its affiliates had made to NAI.

Prior to the expiration of the exclusivity period, representatives of Centerview also held a call with representatives of Skydance and RedBird to discuss the status of a potential transaction between Paramount and Skydance, including in light of the recent news reports regarding Paramount’s purported receipt of an all-cash acquisition proposal from Apollo Global Management and Sony Pictures. The representatives of Skydance and

 

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RedBird informed the representatives of Centerview that, in the event the Special Committee determined it would not be extending the exclusivity period beyond May 3, 2024, Skydance would require continued engagement from the Special Committee and its advisors, including by way of reimbursement of Skydance’s transaction expenses during the period following the end of the exclusivity period, in order to continue to expend resources exploring a potential transaction with Paramount.

At 11:59 p.m. Eastern Time on May 3, 2024, the exclusivity period under the Exclusivity Agreement ended automatically in accordance with the terms of the Exclusivity Agreement.

On May 4, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to review and discuss the May 1 Party C/Party H Proposal. The participants observed that, compared to the letters previously submitted by Party C, the May 1 Party C/Party H Proposal included more details regarding the transaction being proposed. The participants also discussed (i) the key information omitted from the letter, including regarding the structure and relative ownership split between Party C and Party H, (ii) that the proposal contemplated the acquisition of 100% of the shares of Paramount common stock held by NAI and Ms. Redstone rather than the acquisition of 100% of NAI (as affiliates of Skydance had proposed), which NAI likely would view as disadvantageous to NAI and (iii) the regulatory considerations applicable to a potential transaction with Party C and Party H, including the likelihood that such a transaction could receive enhanced scrutiny by regulators and therefore might present more closing risk than a transaction with Skydance solely from a regulatory perspective. Representatives of Cravath also discussed legal considerations and the duties of the members of the Special Committee in the context of a transaction involving NAI. The Special Committee directed the representatives of Cravath and Centerview to commence engagement with Party C, Party H and their respective advisors, including to discuss potential improvements to the terms of the May 1 Party C/Party H Proposal and potential regulatory considerations related to the proposed transaction with Party C and Party H. Following the meeting, representatives of Centerview held a call with representatives of Party C’s financial advisor to discuss the May 1 Party C/Party H Proposal and potential improvements to the economic terms of such proposal.

Also at the Special Committee’s meeting on May 4, 2024, representatives of Centerview summarized their recent conversations with BDT, Skydance and RedBird, and the Special Committee and its advisors discussed next steps with respect to Skydance in light of the May 1 Party C/Party H Proposal, including potential revisions to the structure and economic terms of the latest transaction proposal received from Skydance. The Special Committee also determined it was advisable to agree to Skydance’s request that Paramount reimburse Skydance’s transaction expenses incurred following the end of the exclusivity period (subject to a specified time period during which such expenses would be reimbursed and a cap on the aggregate amount of the reimbursable expenses), after concluding that keeping Skydance engaged as a potential counterparty would (i) enable the Special Committee to continue to evaluate the merits of, and potentially improve the terms of, a transaction with Skydance and (ii) create competitive tension while the Special Committee evaluated a transaction with Party C and Party H and any other strategic alternatives that emerged.

On May 5, 2024, representatives of Cravath held a call with representatives of Party C’s legal counsel to discuss the potential transaction with Party C and Party H, including the proposed transaction structure, regulatory considerations, the Special Committee’s request that any transaction would be conditioned on a majority-of-the-minority vote, and potential non-disclosure agreements with each of Party C and Party H. Party C’s legal counsel noted that they did not represent Party H and did not know which law firm would be acting as legal counsel to Party H, but that they would endeavor to facilitate the entry into non-disclosure agreements on behalf of both Party C and Party H. Following the call, representatives of Cravath sent to representatives of Party C’s legal counsel a draft non-disclosure agreement for each of Party C and Party H. Over the course of the following two weeks, representatives of Cravath and Party C’s legal counsel negotiated the non-disclosure agreements, which, due to delays not caused by the Special Committee or its advisors, Paramount did not execute with each of Party C and Party H until May 16, 2024. The executed non-disclosure agreement between Paramount and each of Party C and Party H contained a standstill provision binding each of Party C and

 

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Party H, with a customary exclusion permitting each of Party C and Party H to make proposals to Paramount privately and confidentially and a Fallaway Provision. Thereafter and continuing into June 2024, representatives of the Special Committee, Paramount, Party C and Party H engaged in discussions and Party C and Party H engaged in due diligence, with Paramount providing certain confidential information regarding its business and financial condition to Party C, Party H and their respective representatives.

Also on May 5, 2024, representatives of Centerview held a call with representatives of Skydance and RedBird to discuss various matters related to the potential transaction between Paramount and Skydance, including the basis on which the parties would agree to continue discussions regarding a transaction. The representatives of Skydance and RedBird reiterated that Skydance would not be willing to condition a transaction on a majority-of-the-minority vote, but stated that Skydance would be willing to agree to a 30-day post-signing “go-shop” provision that would enable the Special Committee to solicit and negotiate alternative acquisition proposals following the signing of the Transaction Agreement. The representatives of Skydance and RedBird also expressed increased frustration at how long the negotiating process had taken and the number of leaks in the press and stated that they were not prepared to continue in this manner absent exclusivity.

On May 6, 2024, representatives of Latham sent to representatives of Cravath an initial draft of an agreement (the “Expense Reimbursement Agreement”) providing for the reimbursement of certain transaction expenses incurred by Skydance and certain of its investors and their respective affiliates and financing sources on or after May 4, 2024 until the earlier of the termination of discussions or Paramount’s entry into a definitive transaction agreement. Over the course of the following days, representatives of Cravath and Latham negotiated the Expense Reimbursement Agreement, which Paramount and Skydance executed on May 10, 2024. The executed version provided for reimbursement of such transaction expenses incurred on or after May 4, 2024 through May 28, 2024 (or the date of the termination of discussions, or Paramount’s entry into a definitive written agreement, if earlier) up to a maximum of $4 million in the aggregate.

On May 7, 2024, representatives of Cravath and Latham held a call to discuss certain terms of the April 12 Draft Transaction Agreement. During the call, the representative of Latham reiterated that Skydance and its affiliates would not be willing to condition a transaction on a majority-of-the-minority vote.

On May 8, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss matters related to potential transactions with Party C and Party H as well as Skydance. Representatives of Cravath and Centerview noted that Party C and Party H were still in the early stages of their processes, including with respect to engaging advisors, and that this had resulted in less frequent and less substantive engagement with Party C and Party H to date than expected.

Also at the Special Committee’s meeting on May 8, 2024, representatives of Cravath reviewed with the Special Committee the April 12 Draft Transaction Agreement and potential responses thereto, following which the Special Committee directed the representatives of Cravath to send to Latham a list of issues in, and proposed modifications to the terms of, the April 12 Draft Transaction Agreement (the “May 8 Issues List”), which the representatives of Cravath did later that day. The May 8 Issues List included, among other proposed modifications, (i) the addition of a majority-of-the-minority vote condition, together with a provision providing for reimbursement of Skydance’s expenses (subject to a cap to be agreed) in the event the requisite vote was not obtained, (ii) a termination fee payable by Paramount equal to 2% of the equity value of Paramount implied by the transactions, (iii) fixing at signing the number of shares to be issued to Skydance’s equityholders in respect of Paramount’s acquisition of Skydance and (iv) post-transaction governance arrangements at least as favorable to Paramount’s Public Stockholders as the existing Paramount governance provisions, including with respect to the independence of the board of the post-transaction combined company.

On May 9, 2024, representatives of R&G notified representatives of Cravath that NAI was continuing to explore potential NAI-only transactions with multiple parties (whom R&G did not identify). The representatives of R&G also stated that NAI intended to continue engaging with Skydance and its affiliates on a potential transaction as well as Party C and Party H.

 

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On May 10, 2024, representatives of Cravath, Latham and Sullivan & Cromwell LLP (“S&C”), legal counsel to RedBird, met via videoconference to discuss the April 12 Draft Transaction Agreement and the May 8 Issues List. During the call, the representatives of Latham and S&C reiterated that Skydance and RedBird would not be willing to agree to condition a transaction on a majority-of-the-minority vote.

Also on May 10, 2024, representatives of advisors to the Special Committee, Paramount, Party C and Party H met via videoconference to discuss regulatory and structural matters related to a potential transaction among Paramount, Party C and Party H. The parties engaged in similar discussions over the course of the remainder of the month of May in recognition of the fact that the regulatory analysis would be a critical component of assessing the viability and merits of the May 1 Party C/Party H Proposal.

On May 11, 2024, representatives of Centerview held a call with representatives of BDT to discuss the status of NAI’s sale process. The representatives of BDT stated that NAI was continuing to evaluate transactions with affiliates of Skydance, Party C and Party H, and other parties (whom BDT did not identify) with a goal of announcing a transaction prior to the 2024 Annual Meeting on June 4, 2024.

On May 12, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss various matters related to the potential transactions with Party C and Party H as well as Skydance. Representatives of Cravath stated that Party C and Party H had still not entered into a non-disclosure agreement, a draft of which had been shared with Party C and Party H one week prior, and that this had delayed the parties’ ability to commence due diligence. Representatives of Centerview also reviewed and discussed the economic terms of the April 28 Skydance Proposal and potential counterproposals, including the impact that potential revised terms such as increased cash consideration, a higher Transaction Class B Price, a higher Subscription Class B Price and a lower implied Skydance valuation would have on value for Paramount’s Public Stockholders as well as the percentage of the post-transaction combined company owned by Skydance affiliates. Over the course of the following weeks until June 11, 2024, the date on which NAI terminated its discussions with Skydance regarding a transaction with affiliates of Skydance, representatives of Centerview, Cravath, Latham, RedBird, Rothschild & Co, Simpson, Skydance and S&C met regularly to discuss these and other terms of the proposed transaction.

On May 13, 2024, representatives of Cravath sent a revised draft of the Transaction Agreement to representatives of Latham. The revised draft reflected the proposed modifications outlined in the May 8 Issues List (as described above).

On May 14, 2024, news outlets reported that Sony Pictures was “rethinking” its bid to acquire Paramount in conjunction with Apollo Global Management.

On May 16, 2024, the Special Committee approved by written consent a Limited DGCL 203 Waiver in respect of certain discussions between each of Party C and Party H, on the one hand, and NAI, on the other hand. In determining to approve the waiver, the Special Committee considered, among other things, the fact that the non-disclosure agreements to be entered into with each of Party C and Party H contained 15-month standstill agreements that would generally prevent Party C or Party H, as applicable, from engaging in transactions with respect to Paramount or NAI without the Special Committee’s approval. Following the execution of the non-disclosure agreements later that day, representatives of Centerview held a call with representatives of Party C’s financial advisor to discuss next steps with respect to a potential transaction, including relating to commencement of a due diligence process.

On May 18, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and Paramount management in attendance for all or part of the meeting. Representatives of Paramount management reviewed Paramount’s then-current internal financial forecasts, reflecting Paramount management’s financial forecasts for Paramount on a standalone basis for fiscal years 2024 through 2028 (the “Paramount May 2024 Financial Forecasts”). The Special Committee then directed the representatives of

 

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Centerview to share the Paramount May 2024 Financial Forecasts with representatives of Skydance, which the representatives of Centerview did on the same day following the meeting. For more information about the Paramount May 2024 Financial Forecasts, see the section entitled “—Certain Unaudited Prospective Financial Information—Paramount Unaudited Prospective Financial Information” beginning on page 149 of this information statement/prospectus.

Also during the Special Committee’s meeting on May 18, 2024, the Special Committee and its advisors discussed the status of their engagement with Party C and Party H. Representatives of Centerview observed that, although the non-disclosure agreements had been signed two days prior, representatives of Party C’s financial advisor had not yet submitted an initial list of due diligence requests with respect to Paramount and both Party C and Party H were continuing to proceed at a slow pace.

On May 21, 2024, representatives of Latham sent a revised draft of the Transaction Agreement (the “May 21 Draft Transaction Agreement”) to representatives of Cravath. Among other revisions, the May 21 Draft Transaction Agreement (i) included a 20-day post-signing go-shop provision, subject to a 10-day extension for parties who submitted and maintained a qualifying offer during the initial 20-day period, but no majority-of-the-minority vote condition, (ii) provided that shares of voting Paramount Class A common stock held by Paramount’s Public Stockholders could elect to receive a to-be-determined amount of cash or shares of non-voting New Paramount Class B common stock based on a to-be-determined conversion ratio in connection with the transactions, (iii) provided that three directors on the board of directors of New Paramount would be independent and designated by Paramount; (iv) provided that the termination fee payable by Paramount would be equal to 4.5% of the equity value of Paramount implied by the transactions; and (v) provided for a fixed number of shares to be issued to Skydance’s equityholders, subject to adjustment if the value of the shares at the closing of the transactions exceeded the upper limit or fell below the lower limit of a price range to be determined. From May 21, 2024 through June 11, 2024, the date on which NAI terminated its discussions with affiliates of Skydance regarding a transaction, representatives of Cravath, Latham and S&C continued to exchange drafts of, and engage in negotiations regarding the terms of, the Transaction Agreement and the other agreements proposed to be entered into in connection with the transactions contemplated by the Transaction Agreement.

On May 23, 2024, the Special Committee met twice via videoconference, with representatives of Cravath, Centerview, Paramount management, Skydance, RedBird, Latham and independent consultants engaged by each of the Special Committee and Skydance in attendance. During the meetings, representatives of Skydance and RedBird reviewed Skydance’s business and shared their perspectives on the strategic rationale of the proposed transaction and their strategic priorities for the post-transaction combined company. A representative of Skydance’s independent consultant also reviewed (i) a cost-saving plan for Paramount, which the consultant estimated would generate more than $2.0 billion of run-rate cost savings by 2028, with potential for additional upside, and (ii) a proposed strategic plan for achieving such cost savings. The representatives of Skydance, RedBird and Skydance’s independent consultant also shared their perspectives on estimated cost synergies in a transaction between Paramount and Skydance, which they projected to be equal to $130 million, and reviewed annual forecasts of the post-transaction combined company’s revenue and Adjusted OIBDA through 2028.

Also on May 23, 2024, S&P lowered NAI’s issuer credit rating from “CCC+” to “CCC”, stating, among other things, that S&P believed NAI would not be able to generate positive free operating cash flow and would not have sufficient liquidity to repay its outstanding debt without refinancing or selling a portion of its stake in Paramount. S&P also suggested that it could lower NAI’s rating further if it believed that NAI could default on its outstanding debt within the next six months.

On May 26, 2024, a representative of Centerview held a call with a representative of Party F during which the participants discussed, among other things, the Special Committee’s process and the February 29 Party F Proposal, which, among other things, provided for the contribution of an entertainment studio and an unspecified amount of cash to Paramount in exchange for Party F receiving 19.9% of the outstanding shares of Paramount common stock. There was no discussion of Party F submitting a new proposal that the Special Committee might deem to be more attractive for Paramount and its stockholders.

 

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Also on May 26, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview, Paramount management, Rothschild & Co and the independent consultant engaged by the Special Committee in attendance for all or part of the meeting. During the meeting, representatives of Paramount management and Rothschild & Co shared their perspectives regarding Skydance’s business and financial condition based on the due diligence they had conducted to date, and representatives of Paramount management discussed certain downward adjustments that Paramount management would recommend making to Skydance’s financial forecasts for its business on a standalone basis. The Office of the CEO also observed that Skydance’s proposed cost-saving initiatives overlapped to some extent with initiatives that Paramount could and intended to take on its own, and they discussed certain actions they proposed to take as co-CEOs to improve Paramount’s strategic and financial outlook.

Also at the Special Committee’s meeting on May 26, 2024, representatives of the Special Committee’s independent consultant reviewed the results of their independent assessment of the estimated integration synergies in a transaction between Paramount and Skydance (the “Synergies”), which consisted of (i) potential cost synergies estimated to be in the range of $150–$250 million and (ii) potential revenue synergies estimated to be in the range of $75–$115 million.

On May 27, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance. Representatives of Centerview reviewed the information presented to the Special Committee at its meetings the day prior, including the financial forecasts Skydance provided for its business on a standalone basis and certain downward adjustments thereto recommended by Paramount management. The representatives of Centerview observed that Paramount management generally forecasted a slower-growing and lower-margin business than was reflected in Skydance’s forecasts, with material reductions to Skydance’s projected cash flow, and the Special Committee and its advisors considered how to address the relative optimism of Skydance’s forecast and the relative conservatism of Paramount management’s adjustments thereto.

Also at the Special Committee’s meeting on May 27, 2024, the representatives of Centerview noted that Party C and Party H had commenced their due diligence process but that, despite ongoing efforts at engagement with Party C and Party H and their respective advisors, there had not been further substantive engagement with respect to the May 1 Party C/Party H Proposal. The Special Committee observed that, in light of the lack of substantive engagement from Party C and Party H, Skydance remained the only potential counterparty that was actively engaged in discussions with the Special Committee at that time.

Additionally, at the Special Committee’s meeting on May 27, 2024, representatives of Cravath reviewed with the Special Committee certain open issues in the draft transaction agreements with Skydance, and proposed modifications to the terms of Skydance’s latest drafts of such agreements. Later that day, (i) at the Special Committee’s direction, representatives of Cravath sent to representatives of Latham a revised draft of the form of the Subscription Agreements, which proposed, among other things, removal of the commitment fee, and (ii) representatives of Latham sent to representatives of Cravath drafts of additional transaction documents, including drafts of the Voting Agreement and the Written Consent. Thereafter through June 11, 2024, the date on which NAI terminated its discussions with Skydance regarding a transaction with certain affiliates of Skydance, representatives of Cravath, Latham and S&C exchanged drafts of, and engaged in negotiations regarding, the Subscription Agreement, the Voting Agreement, the Written Consent and the other agreements proposed to be entered into in connection with the transactions contemplated by the Transaction Agreement.

Thereafter, representatives of Centerview held a call with representatives of Skydance and RedBird to discuss the timing for Skydance’s submission of a revised transaction proposal. The representatives of Skydance and RedBird informed the representatives of Centerview that they would submit a revised transaction proposal once they resolved certain open transaction points with NAI, including the terms of NAI’s continued indemnification obligations to certain directors, officers and other affiliates of NAI, which the representatives of Skydance and RedBird stated could influence the amount of cash that Skydance’s affiliates would be willing to contribute in a transaction involving Paramount.

 

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On May 28, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss the forecasts for Skydance’s business received from Skydance and the proposed adjustments thereto received from Paramount management. Following discussion of various factors, the Special Committee directed Centerview to use a blended case at the midpoint between the forecasts provided by Skydance and the adjusted forecasts provided by Paramount management, concluding that such a blend took appropriate account of the relative optimism of Skydance’s underlying assumptions and the relative conservatism of Paramount management’s underlying assumptions (which the Special Committee viewed as overly conservative in certain respects). For more information about the forecasts for Skydance’s business on a standalone basis, see the section entitled “Certain Unaudited Prospective Financial Information—Skydance Unaudited Prospective Financial Information” beginning on page 151 of this information statement/prospectus.

Later that day, representatives of Skydance and RedBird held a call with representatives of Centerview to review the terms of a revised transaction proposal (the “May 28 Skydance Proposal”), which provided that (i) the Transaction Class B Price would increase to $15.00 per share, (ii) the amount of the PIPE Subscription would increase to $6.0 billion at a Subscription Class B Price of $15.00 per share, with up to $4.5 billion being used to fund the cash merger consideration and $1.5 billion contributed to New Paramount’s balance sheet, (iii) Skydance affiliates would receive two tranches of warrants to acquire shares of New Paramount Class B common stock, one with a strike price of $25.00 per share and the other with a strike price of $30.00 per share (with the parties subsequently discovering on June 1, 2024, as noted below, that the parties were not aligned with respect to whether the proposal contemplated two tranches of 200 million warrants or two tranches of $200 million of warrants), (iv) holders of shares of Paramount Class A common stock that are Public Stockholders would be entitled to elect to receive either $23.00 in cash (the “Transaction Class A Price”) or approximately 1.5333 shares of New Paramount Class B common stock per share of Paramount Class A common stock and (v) there would be a collar on the value of the shares of New Paramount Class B common stock to be received in respect of Paramount’s acquisition of Skydance to ensure that the value of the shares of New Paramount Class B common stock to be received in respect of Paramount’s acquisition of Skydance would be determined at the time of signing the Transaction Agreement. The proposed Transaction Class B Price represented an approximately 25% premium to the closing price of the Paramount Class B common stock (of $11.96) on May 24, 2024, the most recent trading day prior to receipt of the May 28 Skydance Proposal. The representatives of Skydance and RedBird also informed the representatives of Centerview that Skydance’s applicable affiliates had agreed on a proposed framework with NAI with respect to the principal economic terms of the transaction between NAI and Skydance, including the extent of NAI’s continued indemnification of directors, officers and affiliates of NAI in connection with any litigation arising out of a potential transaction with Paramount. Thereafter, representatives of Centerview communicated the terms of the May 28 Skydance Proposal to the Special Committee and Cravath.

Overnight on May 29, 2024, at the Special Committee’s direction, representatives of Cravath sent to representatives of Latham a revised draft of the Transaction Agreement, which included, among other things, the addition of a majority-of-the-minority vote condition, a termination fee payable by Paramount equal to 2.5% of the equity value of Paramount implied by the transactions, a fixed number of shares to be issued to Skydance’s equityholders and post-transaction governance arrangements at least as favorable to Paramount’s Public Stockholders as the existing Paramount governance provisions, including with respect to the independence of the board of the post-transaction combined company.

On May 29, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to review and discuss the May 28 Skydance Proposal and potential improvements thereto and various other matters related to a potential transaction with Skydance, as well as the alternative actions Paramount or NAI might take in the event that a transaction was not agreed with Skydance. The Special Committee observed that, after extensive back and forth over a period of nearly five months, Skydance had delivered economic terms in the May 28 Skydance Proposal that represented material improvements to the terms in Skydance’s prior transaction proposals, including, among other things, by providing substantial cash to Paramount’s Public Stockholders at a higher value per share, reducing the value ascribed to Skydance and

 

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strengthening the balance sheet of the post-transaction combined company (which, among other things, would facilitate the post-transaction combined company’s ability to attain the benefits of the estimated synergies and anticipated cost-cutting initiatives).

Later that day, representatives of Centerview held a call with representatives of Skydance and RedBird to discuss the May 28 Skydance Proposal and a counterproposal thereto that would increase the percentage of the combined company to be owned by existing Paramount stockholders. Thereafter, the representatives of Skydance and RedBird conveyed to the representatives of Centerview a “best and final” proposal (the “May 29 Skydance Proposal”), which (i) lowered the implied valuation of Skydance to $4.75 billion, (ii) removed the collar on the value of the shares of New Paramount Class B common stock to be received in respect of Paramount’s acquisition of Skydance and (iii) revised the proposal with respect to the warrants (with the parties subsequently discovering on June 1, 2024, as noted below, that the parties were not aligned with respect to whether the proposal contemplated two tranches of 150 million warrants or two tranches of $150 million of warrants. Thereafter, representatives of Centerview communicated the terms of the “best and final” May 29 Skydance Proposal to the Special Committee and Cravath.

Also on May 29, 2024, representatives of Cravath and Latham held a call to discuss the latest draft of the Transaction Agreement and open transaction points, including with respect to (i) a majority-of-the-minority vote condition versus a go-shop provision and (ii) post-transaction governance arrangements. During the call, the representatives of Latham reiterated that, for the reasons discussed previously, Skydance would not be willing to condition a transaction on a majority-of-the-minority vote and also rejected the proposed governance changes, stating that Skydance’s affiliates viewed the proposed transaction (including the premium being paid) as a full acquisition of control and would not be willing to commit to maintain Paramount’s existing governance arrangements, including because, in Skydance’s view, Skydance’s proposal better aligned economics and control compared to the existing Paramount arrangements with NAI.

Later that day, representatives of Latham sent to representatives of Cravath a revised draft of the form of the Subscription Agreements, which, among other things, contemplated a to-be-determined subscription discount applicable to the PIPE Subscription that would reduce the aggregate amount of the proceeds received by Paramount in connection with the PIPE Subscription.

On May 29, 2024, representatives of Centerview and BDT held a call to discuss the status of NAI’s sale process, including a potential transaction between NAI and certain affiliates of Skydance. The representatives of BDT stated that (i) the Skydance affiliates had reduced the amount of transaction consideration to NAI equityholders, (ii) NAI was considering two potential NAI-only transactions, one of which NAI believed was financially superior to the transaction proposed by the Skydance affiliates, (iii) NAI would be holding board meetings over the coming days, with the intent to proceed with and potentially announce one of the three transactions under consideration by NAI on June 6, 2024 and (iv) NAI wished to understand whether the Special Committee was likely to recommend a Skydance transaction for approval by the Paramount Board in order to make that the preferred path for NAI.

On May 30, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss various matters related to the potential transaction with Skydance, including the May 29 Skydance Proposal, Cravath’s recent interactions with Latham and Centerview’s recent interactions with BDT. The participants discussed Skydance’s rejection of the majority-of-the-minority vote condition and certain post-transaction governance arrangements, and the Special Committee directed its advisors to continue to seek to negotiate for such a vote and improvements to such governance arrangements despite such rejection. The participants also discussed Paramount’s standalone prospects based on the May 2024 Financial Forecasts, including concerns regarding whether Paramount could obtain the capital necessary to fund the cost cuts contemplated by the May 2024 Financial Forecasts without a substantial cash infusion such as the one contemplated by the May 29 Skydance Proposal.

 

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Also on May 30, 2024, representatives of Cravath and R&G held a call to discuss the status of the potential transactions involving Paramount, NAI, Skydance and certain of Skydance’s affiliates. During the call, the representatives of R&G stated that (i) NAI had not yet reached an agreement with Skydance on the economic terms of a potential transaction and (ii) NAI had requested that the transactions be conditioned on a majority-of-the-minority vote.

On May 31, 2024, the Special Committee met twice via videoconference, with representatives of Cravath and Centerview in attendance, to discuss the potential transaction with Skydance, including recent interactions with NAI’s advisors relating thereto. The representatives of Centerview also reviewed the principal economic terms of the May 29 Skydance Proposal and provided their preliminary views on (i) the valuation of Paramount based on the May 2024 Financial Forecasts and (ii) the implied valuation of Skydance based on the forecasts with respect to Skydance’s business previously approved by the Special Committee.

Also on May 31, 2024, news outlets reported that two additional parties, one of whom was identified as Steven Paul, an individual with media industry experience, had contacted NAI to express interest in an NAI-only transaction.

Overnight on June 1, 2024, representatives of Latham sent to representatives of Cravath a revised draft of the Transaction Agreement (the “June 1 Draft Transaction Agreement”), which, among other things, removed the majority-of-the-minority vote condition and included a 20-day go-shop period with an extension of up to ten days for parties who submitted a qualifying offer during the initial 20-day period and a termination fee payable by Paramount equal to 4.5% of the equity value of Paramount implied by the transactions.

On June 1, 2024, representatives of Latham sent to representatives of Cravath an initial draft of the A&R Charter. For more information about the A&R Charter, see the section entitled “Description of New Paramount’s Capital Stock” beginning on page 286 of this information statement/prospectus. Later that day, representatives of Cravath sent to representatives of Latham a revised draft of the form of the Subscription Agreements, which, among other things, removed the subscription discount.

Also on June 1, 2024, at the direction of the Special Committee, representatives of Centerview shared with representatives of BDT a summary of the principal economic terms of the proposed transaction between Paramount and Skydance. The following day, representatives of Cravath, Centerview and BDT held a call to review such terms.

Additionally, on June 1, 2024, representatives of Centerview held a call with representatives of Skydance and RedBird to discuss the economic terms of the May 29 Skydance Proposal, during which the parties realized that they had not been aligned regarding the proposal with respect to the warrants. During the call, the representatives of Skydance and RedBird stated that the May 29 Skydance Proposal contemplated Skydance affiliates receiving warrants to acquire (i) 150 million shares of New Paramount Class B common stock at a strike price of $25.00 and (ii) 150 million shares of New Paramount Class B common stock at a strike price of $30.00.

On June 2, 2024, representatives of Cravath and R&G held a call to discuss the status of their respective negotiations with Skydance’s advisors. The representatives of R&G stated that NAI and certain affiliates of Skydance were still negotiating the economic terms of a potential transaction and indicated that they did not anticipate an agreement would be reached prior to the 2024 Annual Meeting.

Also on June 2, 2024, representatives of Centerview held a call with representatives of Skydance and RedBird to discuss the proposal related to the number of warrants to be issued to affiliates of Skydance pursuant to the Subscription Agreements. During the call, the representatives of Skydance and RedBird proposed to reduce the number of warrants from 300 million to 200 million shares in the aggregate at a single strike price of $30.00.

 

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Additionally, on June 2, 2024, representatives of Cravath sent to representatives of Latham a list of issues in, and proposed modifications to the terms of, the June 1 Draft Transaction Agreement (the “June 2 Issues List”) and the initial draft of the A&R Charter, including with respect to, among other items, the majority-of-the-minority vote condition, the amount of the termination fee payable by Paramount, and post-transaction governance arrangements.

On June 3, 2024, BDT, a representative of NAI and a representative of R&G held a call with Mr. Ellison and other representatives of Skydance and RedBird where the representatives of Skydance and RedBird provided their perspectives on the merits of a potential transaction with Skydance and its affiliates and their strategic plans for Paramount following the consummation of the potential transaction.

Also on June 3, 2024, representatives of Centerview, Paramount, Skydance and RedBird held a call to discuss updates with respect to Paramount’s business, including its performance to date during the second fiscal quarter of 2024.

Additionally, on June 3, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss updates with respect to a potential transaction with Skydance. Representatives of Cravath and Centerview described their recent interactions with representatives of NAI and Skydance, and discussed certain open transaction terms, including related to the Special Committee’s proposal for a majority-of-the-minority vote condition versus Skydance’s proposal for a go-shop provision. The participants also discussed potential NAI-only transactions that NAI might consider in the event that an agreement could not be reached between NAI and Skydance (including based on recent media reports regarding such potential NAI-only transactions), observing that such an NAI-only transaction would not provide any consideration to Paramount’s Public Stockholders and, therefore, despite the possibility that the Special Committee could seek to extract certain benefits from a buyer in an NAI-only transaction, such a transaction ultimately would not be likely to maximize value for Paramount’s Public Stockholders.

Also at the Special Committee’s meeting on June 3, 2024, the Special Committee and its advisors discussed the differential premium that Skydance and other parties had proposed to pay to Paramount’s Public Stockholders in respect of shares of Paramount Class A common stock relative to shares of Paramount Class B common stock. The participants observed, among other things, that (i) the differential premium was smaller than the then-current market trading premium ($22.14 for Paramount Class A common stock compared to $12.80 for Paramount Class B common stock as of June 3, 2024) and (ii) the differential premium in the aggregate, if reallocated to shares of Paramount Class B common stock, would result in a de minimis increase to the price per share.

On June 4, 2024, Paramount held the 2024 Annual Meeting via videoconference, at which Messrs. Klieger and Terrell and Mses. Ostroff and Seligman did not stand for re-election. Concurrently with the expiration of his term on the Paramount Board, Mr. Terrell concluded his service on the Special Committee.

Also on June 4, 2024, members of the Special Committee appointed Mr. Phillips as the Chair of the Special Committee to create a single point of contact for interested parties to contact the Special Committee. The Chair role had no additional duties or authority.

On June 6, 2024, representatives of Cravath held a call with representatives of R&G to discuss the status of a potential transaction with Skydance. The representatives of R&G informed the representatives of Cravath that NAI was continuing to engage in discussions with Skydance but that a deal announcement was not imminent, whether a deal could be agreed was not clear at the present time and that NAI was aiming for resolution one way or the other in the next week. The representatives of R&G also noted that Party F had contacted NAI with a proposal similar to the transaction contemplated by the February 29 Party F Proposal, which, among other things, provided for the contribution of an entertainment studio and an unspecified amount of cash to Paramount in exchange for Party F receiving 19.9% of the outstanding shares of Paramount common stock, and that NAI had not engaged with, and did not intend to engage with, Party F.

 

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Also on June 6, 2024, representatives of Cravath informed representatives of R&G, at the request of the representatives of R&G, that (i) the economic terms of the proposed transaction between Paramount and Skydance were predominately agreed subject to one open point related to the number of warrants to be issued as part of the PIPE Subscription and (ii) the Special Committee continued to insist upon a majority-of-the-minority vote condition in its negotiations with Skydance. Also on June 6, 2024, representatives of R&G shared with representatives of Cravath a purported acquisition proposal that had been submitted to NAI by an entity identifying itself as Apex Capital Trust (“Apex”). The Special Committee ultimately determined this entity was not credible, as described further below.

Additionally, on June 6, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss updates with respect to a potential transaction with Skydance, including recent interactions between representatives of Cravath and Centerview, on the one hand, and representatives of NAI and Skydance, on the other hand. Among other things, the participants discussed the material improvements in Skydance’s transaction proposal, the lack of other strategic alternatives available to Paramount at the time and the possibility that NAI would instead pursue an NAI-only transaction that would not be likely to maximize value for Paramount’s Public Stockholders.

On June 7, 2024, representatives of RedBird and Latham informed representatives of Centerview and Cravath, respectively, that Skydance and NAI had agreed on a proposed framework of principal economic terms of the NAI Transaction (which the representatives of RedBird and Latham did not specify), and that Skydance wished to announce a transaction as soon as June 10, 2024 and, in advance of entering into a transaction, would need to review certain sensitive due diligence information that had been withheld from Skydance to date.

Also on June 7, 2024, representatives of Cravath, Simpson and R&G held a call, during which the representatives of R&G conveyed a request from NAI that Paramount advance certain expenses incurred by entities affiliated with Ms. Redstone in connection with potential litigation that could arise if Paramount entered into a transaction. No further discussions regarding this topic occurred prior to the entry into the Transactions and the NAI Transaction.

Additionally, on June 7, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance. Representatives of Cravath and Centerview provided updates on their recent interactions with representatives of Skydance and NAI, noting that (i) the parties had not been aligned with respect to the number of warrants proposed to be issued in the PIPE Subscription and that representatives of Centerview were awaiting a revised proposal from Skydance on this topic and (ii) representatives of R&G had not yet confirmed the status of the potential transaction between NAI and Skydance. The participants discussed next steps in the event NAI and Skydance in fact had agreed on a proposed framework of principal economic terms and were seeking to sign a transaction imminently, including reviewing the documentation for the transaction between NAI and Skydance. The Special Committee also determined that the sensitive due diligence information that had been withheld from Skydance to date would continue to be withheld pending further updates on the status of the potential transaction.

Thereafter on June 7, 2024, Skydance delivered a revised proposal (the “June 7 Skydance Proposal”) to the Special Committee, which provided that Skydance affiliates would receive warrants to acquire, in the aggregate, 200 million warrants with a strike price of $30.50 per share, compared to the 200 million warrants with a strike price of $30.00 per share as proposed on June 2, 2024.

Additionally, on June 7, 2024, representatives of Cravath and Latham met via videoconference to discuss open transaction points in the latest drafts of the Transaction Agreement and the other Transaction Documents, including those highlighted in the June 2 Issues List.

On June 8, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss various matters related to the potential transaction with Skydance.

 

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Representatives of Centerview reviewed and discussed the June 7 Skydance Proposal with respect to the number of warrants in the context of the prior misalignment. Representatives of Cravath reviewed legal considerations and reminded the members of the Special Committee of their duties in the context of a transaction involving NAI. Representatives of Cravath also reviewed open transaction points in the latest draft of the Transaction Agreement, including the majority-of-the-minority vote condition versus the go-shop period and Skydance’s proposed governance arrangements, with respect to which the representatives of Cravath noted that Skydance continued to take the position that its affiliates were acquiring control of Paramount alongside a supermajority economic stake and had expressed limited to no flexibility on such terms based on their view (i) of the premium being offered to Paramount stockholders, (ii) of the substantial investment being made into Paramount and (iii) that Skydance’s proposal better aligned economics and control compared to Paramount’s existing governance structure.

Also on June 8, 2024, representatives of Cravath and R&G held a call to discuss the status of their respective negotiations with Skydance. During the call, the representatives of R&G confirmed that NAI and Skydance had agreed on a proposed framework of principal economic terms but that there were other open transaction points, including regarding indemnification and whether the NAI Transaction would be conditioned on a majority-of-the-minority vote in respect of the Paramount transaction.

Later on June 8, 2024, (i) representatives of Cravath sent to representatives of Latham a revised draft of the Transaction Agreement, which, among other things, included a majority-of-the-minority vote condition and a termination fee payable by Paramount equal to 3% of the equity value of Paramount implied by the transactions, and (ii) representatives of Latham sent to representatives of Cravath a revised draft of the form of the Subscription Agreements, which, among other things, included the subscription discount.

On June 9, 2024, representatives of Cravath and Latham held a call to discuss open transaction points, including the majority-of-the-minority vote condition, the size of the termination fee, post-transaction governance arrangements and Skydance’s proposal to reduce the PIPE Subscription by the original issue discount.

Also on June 9, 2024, representatives of Latham sent a revised draft of the Transaction Agreement to representatives of Cravath, which, among other things, removed the majority-of-the-minority vote condition and added a 20-day go-shop period with an extension of up to ten days for parties who submitted a qualifying offer during the initial 20-day period.

On June 9 and June 10, 2024, the Special Committee met three times via videoconference, with representatives of Cravath and Centerview in attendance, to discuss updates with respect to a potential transaction with Skydance, including open transaction terms and a process for obtaining from NAI drafts of the transaction documents in respect of the NAI Transaction in exchange for drafts of the Transaction Agreement and the other agreements related thereto. Representatives of Paramount and Paramount’s regulatory counsel also joined one of the meetings on June 9 to discuss regulatory matters in connection with a potential transaction with Skydance, including communications strategy in the event of a potential transaction announcement.

Overnight on June 11, 2024, representatives of Cravath sent a revised draft of the Transaction Agreement to representatives of Latham, which, among other things, again included a majority-of-the-minority vote condition and removed the go-shop provision.

The morning of June 11, 2024, Ms. Redstone contacted members of the Special Committee to discuss the status of a potential transaction with Skydance and indicated that NAI might walk away from negotiations with Skydance.

Also that morning, representatives of Centerview, Cravath, Latham, S&C, RedBird and Skydance met via videoconference to discuss open transaction points, and concluded the call by tentatively aligning on the

 

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principal economic terms of a potential transaction between Paramount and Skydance. Among other things, the terms contemplated (i) an implied Skydance valuation of $4.75 billion, (ii) no collar on the value of the shares of New Paramount Class B common stock to be received in respect of Paramount’s acquisition of Skydance, (iii) a Transaction Class B Price of $15.00 per share, (iv) a PIPE Subscription equal to $6.0 billion, with up to $4.5 billion being used to fund the cash merger consideration and $1.5 billion contributed to New Paramount’s balance sheet and only the portion being contributed to the balance sheet subject to a 1.875% subscription discount, (v) that Skydance affiliates would receive warrants to acquire, in the aggregate, 200 million shares of New Paramount Class B common stock with a strike price of $30.50 per share and (vi) that holders of shares of Paramount Class A common stock that are Public Stockholders would be entitled to elect to receive either $23.00 in cash or approximately 1.5333 shares of New Paramount Class B common stock per share of Paramount Class A common stock. The proposed Transaction Class B Price represented an approximately 25% premium to the closing price of the Paramount Class B common stock (of $11.98) and the proposed Transaction Class A Price represented an approximately 10% premium to the closing price of the Paramount Class A common stock (of $20.95), each on June 10, 2024, the most recent trading day prior to June 11, 2024.

Additionally, on June 11, 2024, representatives of Cravath and R&G held a call during which a representative of R&G inquired as to the status of a potential transaction between Paramount and Skydance, including whether the Special Committee had approved a transaction with Skydance, to which the representatives of Cravath responded that the Special Committee had not approved any transaction.

That afternoon, representatives of R&G notified representatives of Cravath that, while Skydance and NAI had agreed on a proposed framework of principal economic terms the week prior, they had failed to find common ground on other issues, and as such NAI did not have an agreement on a deal with the affiliates of Skydance and did not anticipate that it would find a path forward for a transaction with the affiliates of Skydance.

Minutes later, the Special Committee met via videoconference with representatives of Cravath and Centerview in attendance. Representatives of Cravath reviewed the latest correspondence from R&G, noting that the representatives of R&G were clear as to NAI’s position regarding a transaction with Skydance and its affiliates, that a transaction with Skydance would require NAI’s consent in its capacity as the controlling stockholder of Paramount, and that, as a result, NAI’s position would render the Skydance transaction no longer actionable. The Special Committee then directed its advisors to pause all discussions with Skydance. The Special Committee met again later that day to discuss a potential public statement on behalf of the Special Committee. Later that day, NAI issued a statement announcing that NAI had terminated its discussions with Skydance regarding a transaction with affiliates of Skydance, and the Special Committee confirmed publicly that it had been advised of the same by NAI.

On June 14, 2024, representatives of R&G notified representatives of Cravath that NAI was engaged in discussions regarding an NAI-only transaction with a consortium comprised of Party J, a leading private equity firm, and Party K, an individual with media industry experience. The representatives of R&G also provided a list of due diligence requests with respect to Paramount that NAI had received from Party J and Party K.

On June 17, 2024, the Special Committee met via videoconference, with a representative of Cravath in attendance, to discuss the request to facilitate due diligence with respect to a potential NAI-only transaction with Party J and Party K. The Special Committee and the representative of Cravath discussed legal considerations and the duties of the members of the Special Committee in the context of a transaction involving NAI and various considerations with respect to the request, including whether other benefits might be provided in exchange for the facilitation of due diligence. The Special Committee then determined to provide Party J and Party K with access to due diligence and directed Cravath to send a draft non-disclosure agreement to Party J and Party K, and further to include in such draft a covenant that would provide certain assurances from Party J and Party K with respect to an improved balance sheet and other benefits to be provided to Paramount and its stockholders in the event that Party J and Party K acquired a controlling interest in NAI.

 

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On June 18, 2024, the closing price of Paramount Class B common stock was $9.61, the lowest closing price since the merger of CBS and Viacom. The closing price of Paramount Class A common stock on that day was $17.02.

Also on June 18, 2024, representatives of Cravath sent, through representatives of R&G, to legal counsel to Party J and Party K, a draft non-disclosure agreement. Over the course of the following days, representatives of Cravath and legal counsel to Party J and Party K negotiated the non-disclosure agreement, which Paramount executed with each of Party J and Party K on June 26, 2024. The executed non-disclosure agreement between Paramount and each of Party J and Party K contained a standstill provision binding each of Party J and Party K, with a customary exclusion which permitted each of Party J and Party K to make proposals to Paramount privately and confidentially and to make proposals to acquire NAI (excluding Paramount and its subsidiaries). Party J, Party K and their respective representatives subsequently received access to a virtual data room and engaged in a due diligence review of Paramount prior to Paramount signing the Transaction Agreement.

On June 24, 2024, the Special Committee met via videoconference, with representatives of Cravath in attendance, to discuss the status of the draft non-disclosure agreement between Paramount and each of Party J and Party K. Representatives of Cravath noted that the only open point in the draft related to the assurances requested by the Special Committee, which Party J and Party K had been rejecting. The Special Committee directed the representatives of Cravath to continue to seek the requested assurances.

Later that day, a member of the Special Committee held a call with a representative of the financial advisor to Party C (which had, from time to time, continued to request certain due diligence information from Paramount but had not otherwise engaged substantively with the Special Committee or its advisors) to discuss due diligence matters, including a request from Party C and Party H for a meeting with Paramount management. Such meeting did not ultimately occur.

On June 25, 2024, representatives of Cravath held a call with representatives of R&G to discuss the status of NAI’s sale process. During the call, the representatives of R&G stated that NAI was continuing to explore NAI-only transactions and was interested in entering into a transaction in the near term, that NAI was aware that it might not be able to reach agreement with Party J and Party K (who had not yet entered into non-disclosure agreements with Paramount) on that timeline and that NAI was considering other NAI-only transactions with other parties (whom R&G did not identify). That same day, Ms. Redstone contacted a member of the Special Committee to convey a similar message, including NAI’s intent to enter into a transaction in the near term.

Members of the Special Committee then discussed the updates from NAI and R&G, taking into consideration the benefits of (i) NAI pursuing a transaction with Party J and Party K, each of whom the Special Committee believed was a credible counterparty, as opposed to potential NAI-only transactions involving alternative counterparties whom NAI had not identified to the Special Committee and (ii) having additional time to explore any other strategic alternatives that might be available to Paramount (including the possibility of a transaction with Party C who had recently expressed an interest in conducting additional due diligence of Paramount), following which the Special Committee directed the representatives of Cravath to concede the open point related to the assurances requested by the Special Committee and coordinate execution of the non-disclosure agreements with each of Party J and Party K.

Also on June 25, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance. During the meeting, representatives of Centerview noted that, at the direction of the Special Committee, they had been in contact with Party C’s financial advisor and would coordinate any requested management meetings with Paramount.

Later on June 25, 2024, the members of the Special Committee convened to discuss NAI’s sale process and determined that the Special Committee would consider and, if appropriate, facilitate other requests for due diligence from counterparties pursuing an NAI-only transaction. NAI subsequently informed the Special

 

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Committee of one such additional counterparty pursuing an NAI-only transaction, Party L, a strategic counterparty, with whom, at the Special Committee’s direction, Paramount entered into a non-disclosure agreement on July 1, 2024. The executed non-disclosure agreement between Paramount and Party L contained a standstill provision binding Party L, with a customary exclusion which permitted Party L to make proposals to Paramount privately and confidentially and to make proposals to acquire NAI (excluding Paramount and its subsidiaries).

On July 2, 2024, representatives of R&G notified representatives of Cravath and the members of the Special Committee that NAI and certain affiliates of Skydance had agreed on a proposed framework of principal terms for the sale of 100% of the outstanding stock of NAI to affiliates of Skydance and RedBird. The representatives of R&G also stated that (i) consistent with the parties’ prior discussions, the NAI Transaction would be conditioned on a transaction between Skydance and Paramount, (ii) the NAI Transaction would not be conditioned on a majority-of-the-minority vote in respect of the Paramount transaction, but that NAI deferred to the Special Committee regarding the Special Committee’s determination as to whether such a vote would be required as a condition to a potential transaction between Paramount and Skydance and (iii) NAI understood that the Special Committee would need to make an independent decision regarding whether it was in the best interests of Paramount and its stockholders to pursue a transaction with Skydance.

Later that day, the Special Committee met via videoconference with representatives of Cravath and Centerview in attendance to discuss the update from R&G. The Special Committee considered various factors, including (i) the significant improvement in the economic terms of Skydance’s transaction proposal over the course of the extended period of negotiations, including with respect to the amount of cash consideration to be contributed by Skydance affiliates, (ii) the tentative alignment between the parties regarding principal economic terms at the time NAI terminated its discussions with Skydance regarding a transaction with affiliates of Skydance the month prior, (iii) that, despite widespread publicity of the termination of the discussions with Skydance the month prior, no party had reached out to the Special Committee or its advisors to express interest in a potential transaction with Paramount since the discussions with Skydance terminated the month prior (other than Party C, who expressed an interest solely in conducting additional due diligence of Paramount, and Apex, who the Special Committee ultimately determined was not credible) and (iv) the alternative to a transaction with affiliates of Skydance from NAI’s perspective was an NAI-only transaction, which would not provide any consideration to Paramount’s Public Stockholders and therefore likely would not generate the value for Paramount’s Public Stockholders that a transaction with Skydance would generate. Following such discussion, the Special Committee determined to re-engage with Skydance and directed the representatives of Cravath to (A) notify the representatives of R&G accordingly and (B) re-commence engagement with representatives of Skydance and Latham.

Also on July 2, 2024, news outlets reported that Skydance and NAI had reached a preliminary agreement with respect to an acquisition of NAI.

Additionally, on July 2, 2024, representatives of Centerview, Cravath, Skydance, RedBird and Latham held a call to discuss the status and terms of the transaction documentation in connection with a potential transaction between Paramount and Skydance. Between July 2, 2024 and the signing of the Transaction Agreement, as described below, representatives of Centerview, Cravath, Latham, RedBird, Rothschild & Co, Simpson, Skydance, S&C and an additional investor in Skydance that subsequently became a PIPE Equity Investor met and/or communicated regularly during such period to discuss open transaction items, including outstanding due diligence questions and terms of the transaction agreements (i.e., the Transaction Agreement, the Transaction Documents and the other agreements proposed to be entered into in connection with the transactions contemplated by the Transaction Agreement).

On July 3, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and BDT in attendance. During the meeting, the representatives of BDT reviewed and discussed the structure and principal economic terms of the proposed transaction between NAI and certain affiliates of

 

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Skydance and the progression of the purchase price over time, including how (i) the initial implied equity value had been reduced by $200 million during the course of the negotiations between Skydance and the Special Committee and (ii) the implied equity value had then increased during the period after NAI terminated its discussions with Skydance regarding a transaction with affiliates of Skydance on June 11, 2024, without a corresponding reduction to the amount of cash consideration in the proposed transaction between Skydance and Paramount. The representatives of BDT also stated that NAI had been in discussions with four parties regarding an NAI-only transaction, but that none of such other potential acquirers had demonstrated that it had the requisite capital to fortify Paramount’s balance sheet to the same extent that the affiliates of the Skydance investors did, and that this was a factor that NAI considered in evaluating the merits of such other potential offers. The representatives of BDT also discussed next steps for a potential Skydance transaction, including NAI’s perspective on timing for a possible deal announcement and the process for the Special Committee and its advisors to review the transaction documents for the potential transaction between NAI and the affiliates of Skydance. Also at the Special Committee’s meeting on July 3, 2024, representatives of Centerview reviewed the economic terms of the proposed transaction between Paramount and Skydance as negotiated as of June 11, 2024 when discussions terminated and the reduction in the trading price of the Paramount Class B common stock from $11.98 on June 10, 2024 to $10.72 on July 2, 2024. Following the discussion, the Special Committee determined to share the sensitive due diligence information that had been withheld from Skydance to date (including certain commercial contracts and employee-related information) and move forward with seeking to complete negotiations regarding a transaction with Skydance.

Additionally, on July 3, 2024, Party C sent a letter (the “July 3 Party C Proposal”) to the Special Committee, which was unsigned and marked as a draft, outlining a preliminary proposal for a preferred equity investment in Paramount in an aggregate amount equal to $4 billion to be used by Paramount to acquire its issued and outstanding shares and deleverage its capital structure. The July 3 Party C Proposal stated that the proposal was conditioned on (i) the approval of the stockholders of Paramount and (ii) Paramount not having a controlling stockholder following the closing of the proposed transaction.

Between July 3, 2024 and July 7, 2024, members of the Special Committee and representatives of Centerview, Cravath, Latham, Paramount management, RedBird, Rothschild & Co, Skydance, Simpson and S&C met via videoconference multiple times to negotiate the terms of the Transaction Agreement, including the restrictions that would apply to Paramount’s business during the period between the entry into the Transaction Agreement and the closing of the potential transaction.

On July 4, 2024, representatives of Cravath and R&G exchanged drafts of the Transaction Agreement and the NAI Purchase Agreement. As the representatives of R&G had previewed to the representatives of Cravath on July 2, 2024, the NAI Purchase Agreement did not contain a majority-of-the-minority vote condition. Thereafter, (i) representatives of Cravath continued to exchange drafts of the Transaction Agreement and related documents with representatives of R&G in advance of signing the Transaction Agreement and (ii) representatives of R&G continued to exchange drafts of the NAI Purchase Agreement and related documents with representatives of Cravath in advance of signing the NAI Purchase Agreement.

Also on July 4, 2024, a member of the Special Committee held a call with a representative of Party L, during which the representative of Party L expressed Party L’s interest in a potential transaction with Paramount (but did not propose or specify any terms for such a transaction) and shared Party L’s perspectives on a potential transaction between Paramount and Skydance.

On July 4 and July 5, 2024, the Special Committee met multiple times via videoconference, with representatives of Cravath and Centerview in attendance. Representatives of Cravath reviewed legal considerations and the duties of the members of the Special Committee in the context of a transaction involving NAI. The participants also reviewed and discussed the July 3 Party C Proposal, observing that this latest letter was another example of Party C sending letters to the Special Committee but not actually engaging or coming forward with a concrete proposal, which led the Special Committee and its advisors to again question Party C’s

 

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intentions. The participants also considered the risk of losing the nearly-complete Skydance transaction by exploring a preliminary draft proposal from Party C, and the possibility that NAI might not ultimately support a transaction with Party C given the correspondence to date between the Special Committee and its advisors and NAI and its advisors. The participants also discussed that, if the Special Committee approved the transaction with Skydance, the transaction might include a go-shop period and in that case the Special Committee would be able to engage further with Party C at that time. The Special Committee then determined that the Special Committee, its advisors and Paramount management should prioritize the Skydance transaction in lieu of engaging with Party C on its draft proposal at that time under the circumstances. The participants also discussed the outreach from a representative of Party L, concluding that any such possible transaction was too speculative to pursue at that time under the circumstances and again noted that if the Special Committee approved the transaction with Skydance, the transaction might include a go-shop period and in that case the Special Committee would be able to engage further with Party L at that time.

Also at the Special Committee’s meetings on July 4 and July 5, 2024, representatives of Centerview reviewed with the Special Committee the principal economic terms of the proposed transaction with Skydance and provided a financial analysis of Paramount and the proposed transaction, including, among other things, various valuation methodologies to assess the value to Paramount’s Public Stockholders continuing on a standalone basis as compared to the value to such holders of the proposed transaction. The participants also discussed Paramount’s outlook on a standalone basis, referencing the prior discussions among the Special Committee and its advisors regarding the challenges associated with Paramount’s standalone path, including challenges related to rapidly declining industry conditions as well as challenges specific to Paramount’s business, which had, among other things, resulted in downward revisions to Paramount management’s financial forecasts for Paramount on a standalone basis.

Also at the Special Committee’s meetings on July 4 and July 5, 2024, representatives of Cravath reviewed with the Special Committee certain terms of the draft transaction documents and discussed the remaining open transaction points. The Special Committee and its advisors considered whether to continue to insist upon a majority-of-the-minority vote despite Skydance’s position that it would not agree to such a vote under any circumstances, and they also discussed the process that would be undertaken if the Special Committee were to agree to a go-shop provision in lieu of such a vote. The Special Committee then directed Cravath to concede the majority-of-the-minority vote and prioritize negotiating the terms of Skydance’s proposed go-shop provision, including by seeking to extend the duration of the proposed go-shop period. Following negotiations between representatives of Cravath and Latham later that day, Skydance revised its proposal to extend the go-shop period from 30 days to 45 days, with the possibility of an extension of up to 15 days for parties who submitted a qualifying offer during the initial 45-day period. Representatives of Cravath also reviewed with the Special Committee the proposal from Skydance with respect to governance of the post-transaction combined company, including regarding the anticipated board composition, certain rights to be held by directors designated by the Ellison family, and certain approval rights with respect to certain board actions to be granted to certain Skydance affiliates in their capacity as stockholders of the combined company. The representatives of Cravath noted that Skydance actively continued to take the position that its affiliates were acquiring control of Paramount alongside a supermajority economic stake, and thus they continued to express minimal flexibility on these terms during the negotiations. Representatives of Cravath also reviewed certain compensation matters in connection with the proposed transaction, including the treatment of equity awards, retention matters, and estimated payments to executive officers and non-employee directors of Paramount.

On July 6, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and the Special Committee’s public relations advisor in attendance for all or part of the meeting. Representatives of Cravath provided an update on the status of negotiations with Skydance and reviewed the remaining open transaction points in the draft transaction documentation, noting they primarily related to the restrictions that would apply to Paramount’s business during the period between the entry into the definitive agreements and the closing of the potential transaction. Representatives of Cravath also reviewed with the Special Committee a summary of certain terms of the proposed NAI Transaction Agreement. That day,

 

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representatives of Cravath provided comments to the draft NAI Transaction Agreement, which were incorporated into the executed version.

Over the course of July 7, 2024, the Special Committee, Paramount, Skydance, RedBird and their respective advisors finalized the Transaction Agreement and the other agreements related to the Transaction Agreement. Concurrently, NAI and the applicable Skydance affiliates and their respective advisors finalized the NAI Purchase Agreement and the other agreements related to the NAI Transaction. In addition, (i) representatives of Cravath shared each draft of the Transaction Agreement and related documents with representatives of R&G in advance of signing the Transaction Agreement and (ii) representatives of R&G shared each draft of the NAI Purchase Agreement and related documents with representatives of Cravath in advance of signing the NAI Purchase Agreement.

On July 7, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and the Special Committee’s public relations advisor in attendance for all or part of the meeting. At the meeting, representatives of Cravath (i) reviewed with the Special Committee legal considerations and the duties of the members of the Special Committee in the context of a transaction involving NAI and (ii) reviewed and discussed with the Special Committee the final drafts of the Transaction Agreement and the other agreements proposed to be entered into in connection with the transaction with Skydance. Representatives of Centerview reviewed with the Special Committee Centerview’s financial analysis of the aggregate consideration to be paid to the holders of the shares of Paramount Class A common stock and Paramount Class B common stock (other than certain excluded shares) and rendered to the Special Committee its oral opinion, which was subsequently confirmed by delivery of a separate written opinion dated as of July 7, 2024, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken in preparing such opinions, the consideration to be paid to the holders of Paramount Class A common stock and Paramount Class B common stock (other than certain excluded shares), taken in the aggregate, was fair, from a financial point of view, to such holders. Representatives of Cravath also reviewed with the Special Committee its duties and responsibilities. The Special Committee then unanimously adopted resolutions (i) declaring that the Transaction Agreement and the Transactions were advisable and in the best interests of Paramount and its stockholders, (ii) recommending that the Paramount Board approve the Transaction Agreement and the Transactions and (iii) recommending that the Paramount Board recommend adoption and approval of the Transaction Agreement and the Transactions to Paramount stockholders (the “Paramount Special Committee Recommendation”).

Immediately after the Special Committee meeting, the Paramount Board met via videoconference, with representatives of Cravath, Centerview, Paramount management and the Special Committee’s public relations advisor in attendance for all or part of the meeting. Upon the recommendation of the Special Committee, the members of the Paramount Board present at the meeting (which consisted of all the directors serving on the Special Committee, and which excluded Ms. Redstone, who had recused herself in advance of the meeting) unanimously adopted resolutions (i) declaring that the Transaction Agreement and the Transactions were advisable and in the best interests of Paramount and its stockholders, (ii) approving and declaring advisable the Transaction Agreement and the Transactions, (iii) authorizing and approving the execution, delivery and performance by Paramount of the Transaction Agreement and the consummation of the Transactions upon the terms and subject to the conditions set forth in the Transaction Agreement, (iv) recommending that Paramount stockholders entitled to vote adopt the Transaction Agreement and (v) directing that the Transaction Agreement and the Transactions be submitted to Paramount stockholders entitled to vote for adoption (the “Paramount Board Recommendation”).

Later that evening, the parties executed and delivered the Transaction Agreement and the other documentation related to the Transactions, and the parties to the NAI Purchase Agreement executed and delivered the NAI Purchase Agreement and the other documentation related to the NAI Transactions. Upon the execution of the Transaction Agreement, the Written Consent approving and adopting the Transaction Agreement and the Transactions, which NAI had delivered to Paramount prior to execution of the Transaction

 

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Agreement with a future effective time occurring after the execution and delivery of the Transaction Agreement in accordance with Section 228(c) of the DGCL, became effective. Paramount and Skydance then issued a joint press release announcing the Transactions.

On July 8, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to review the go-shop process and discuss tactics and next steps. Representatives of Centerview previewed an initial list of potential counterparties they proposed to contact, consisting of approximately 60 strategic and financial parties, including counterparties with whom the Special Committee had engaged earlier in the process of exploring strategic alternatives (including Party A, Party B, Party C, Party D, Party E, Party F, Party G, Party H, Party J, Party K and Party L).

Later that day, at the direction of the Special Committee, representatives of Centerview began contacting potential counterparties to assess their interest in submitting an alternative acquisition proposal during the go-shop period. During the go-shop period, at the direction of the Special Committee, representatives of Centerview contacted 58 parties, with 51 of those parties declining to engage at all or not engaging in any substantive manner. The seven parties that expressed interest in a potential transaction with Paramount included Apex, Edgar Bronfman, Jr. (“EBJ”), an individual with media industry experience who had previously expressed interest in a potential NAI-only transaction, Party D, Party L, Party M, a leading private equity firm, Party N, an individual with media industry experience, and Party O, a strategic counterparty. Paramount (acting at the Special Committee’s direction) executed non-disclosure agreements with, and granted access to due diligence information to, six of those seven parties (each such party other than Apex). Each non-disclosure agreement contained confidentiality, use and standstill provisions that were, in each case, no less favorable, and other provisions that were no less favorable in the aggregate, to Paramount than the terms of the non-disclosure agreement between Paramount and Skydance, and no non-disclosure agreement contained any provision (i) granting any exclusive right to negotiate with such counterparty, (ii) prohibiting Paramount or its affiliates from satisfying its or their obligations under the Transaction Agreement or (iii) requiring Paramount or any of its subsidiaries to pay or reimburse the counterparty’s fees, costs or expenses. Each of the non-disclosure agreements contained a standstill provision binding the counterparty, with a customary exclusion which permitted the counterparty to make proposals to Paramount privately and confidentially and a Fallaway Provision. Of the six parties that Paramount entered into non-disclosure agreements with during the go-shop period, only EBJ and Party D submitted acquisition proposals (with Party N participating as a member of the EBJ Investor Group (as defined below)).

On July 11, 2024, in response to EBJ’s expression of interest in a potential transaction with Paramount following outreach from Centerview, representatives of Centerview sent to EBJ a draft of a new non-disclosure agreement as required by the terms of the Transaction Agreement, which Paramount and EBJ executed on July 13, 2024. Thereafter, until the EBJ Investor Group withdrew its proposal on August 26, 2024, representatives of the Special Committee, Paramount and EBJ engaged in discussions and a due diligence process, with Paramount providing certain confidential information regarding its business and financials to EBJ and his representatives.

Also on July 11, 2024, in response to Party C’s expression of interest in a potential transaction with Paramount following outreach from Centerview, representatives of Cravath sent to Party C’s legal counsel a draft of a new non-disclosure agreement as required by the terms of the Transaction Agreement. This non-disclosure agreement was not executed, nor did Party C provide any feedback or engage further with respect to the draft non-disclosure agreement or a potential transaction with Paramount during the go-shop period.

On July 17, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss the status of the go-shop process. Representatives of Centerview provided an update on their outreach to potential counterparties and described the engagement that had taken place with respect to the parties who had executed or requested non-disclosure agreements. The participants also reviewed and discussed a purported acquisition proposal received from Apex on July 13, 2024, which the Special Committee did not deem credible and therefore determined did not warrant further consideration.

 

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On July 19, 2024, each of Paramount and Skydance filed a notification and report form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”).

On July 19 and July 24, 2024, EBJ and his representatives met via videoconference and in person, respectively, with representatives of Paramount management, Centerview and Cravath to conduct due diligence with respect to Paramount.

On July 26, 2024, Party D sent to Paramount a non-binding, written proposal (the “July 26 Party D Proposal”) to acquire 100% of the Paramount Class A common stock and 100% of the Paramount Class B common stock for $60.00 and $14.00 per share, respectively, representing an approximately 235% premium to the closing price of Paramount Class A common stock (of $17.92) and an approximately 38% premium to the closing price of Class B common stock (of $10.14), respectively, on July 1, 2024, the last trading day prior to renewed market speculation regarding a transaction between Skydance and Paramount. The July 26 Party D Proposal stated that Party D was working with a private equity firm who was interested in financing the transaction, subject to due diligence. On July 29, 2024, representatives of Centerview sent to representatives of Party D a draft non-disclosure agreement, which was negotiated over the course of the following few days and executed by Paramount and Party D on July 31, 2024. Thereafter, until the abandonment of the July 26 Party D Proposal on August 16, 2024, representatives of the Special Committee and Party D engaged in a due diligence process, with Paramount providing certain confidential information regarding its business and financials to Party D and its representatives.

On July 31, 2024, Apex (describing itself as “a conglomerate of financial institutions and financial services providers”) issued a press release announcing that it had submitted an all-cash offer for up to $43 billion to acquire Paramount. That afternoon, Business Wire withdrew the press release, raising questions about the authenticity of the press release and prompting news outlets to retract their media reports regarding the press release in light of the questions about the credibility of the offer.

On August 1 and August 5, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss the status of the go-shop process as well as tactics and next steps.

On August 15, 2024, representatives of Cravath and EBJ’s legal counsel held a call to discuss the possibility of EBJ submitting an acquisition proposal (the terms of which were not discussed) during the go-shop period. That same day, a member of the Special Committee held a call with EBJ during which EBJ indicated that he intended to submit an acquisition proposal prior to the expiration of the go-shop period and previewed the high-level terms of that proposal.

On August 15 and August 19, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss the status of the go-shop process, including recent interactions with EBJ and Party D and their respective advisors, as well as factors the Special Committee might take into account in evaluating the merits of a competing acquisition proposal beyond its financial terms, such as conditionality and certainty of funds.

Also on August 15, 2024, a member of the Special Committee held a call with a purported representative of a group identifying itself as Project Rise Partners (“PRP”), during which the representative of PRP expressed interest in submitting an acquisition proposal (the terms of which were not discussed) prior to the expiration of the go-shop period. The member of the Special Committee noted the timeline for submitting a formal acquisition proposal prior to the impending expiration of the go-shop period on August 21, 2024, and stated that the Special Committee would review and evaluate the merits of any such proposal that was timely submitted.

On August 16, 2024, representatives of Party D notified representatives of Centerview that Party D would not be further pursuing a transaction with Paramount, thereby abandoning the July 26 Party D Proposal.

 

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On August 19, 2024, EBJ submitted a written, non-binding indication of interest (the “August 19 EBJ Proposal”) to the Special Committee, pursuant to which EBJ and a group of investors (collectively, the “EBJ Investor Group”), which included Party N, proposed (i) an acquisition of the outstanding shares of Paramount Class A common stock from existing holders for, at such holders’ election, $24.53 per share in cash or 1.5333 shares of New Paramount Class B common stock, (ii) a subscription for $1.5 billion of shares of Class B common stock of New Paramount Class B common stock for $16.00 per share, (iii) an acquisition of NAI on the same general terms as the NAI Transaction, (iv) a subscription by the EBJ Investor Group would receive warrants to acquire, in the aggregate, 200 million shares of New Paramount Class B common stock with a strike price of $30.50 per share, (v) a plan to collapse Paramount’s dual-class structure into a single class of shares within two years of the closing of the proposed transaction, with holders of New Paramount Class A common stock receiving 1.53 shares of New Paramount Class B common stock per share of New Paramount Class A common stock and (vi) post-transaction governance arrangements largely consistent with Paramount’s existing governance arrangements, including a majority independent board of directors. The August 19 EBJ Proposal did not propose any cash consideration to holders of Paramount Class B common stock or address payment of the termination fee that would be payable to Skydance if Paramount (at the direction of the Special Committee) terminated the Transaction Agreement to enter into a transaction with the EBJ Investor Group.

At 11:59 p.m. Eastern Time on August 19, 2024, the waiting period under the HSR Act with respect to the Skydance transaction expired.

On August 20, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview and the EBJ Investor Group in attendance. The representatives of the EBJ Investor Group summarized the terms of the August 19 EBJ Proposal, shared their perspective on why they believed the Special Committee should determine that the August 19 EBJ Proposal constituted a “Superior Proposal” under the Transaction Agreement, and described their strategic plan for Paramount in the event of a transaction.

Also on August 20, 2024, representatives of Cravath and R&G held a call to discuss the August 19 EBJ Proposal, including areas of further exploration such as financing certainty and regulatory risk.

Later that day, the EBJ Investor Group submitted an updated list of the financing sources supporting the EBJ Proposal.

Between August 20 and August 25, 2024, representatives of Latham sent several letters to Paramount and/or the Special Committee and their respective advisors asserting various deficiencies with the acquisition proposals received from the EBJ Investor Group (including the absence of any financing commitments or evidence thereof and the lack of proceeds for Paramount’s Public Shareholders in the August 19 EBJ Proposal) and the Special Committee’s process in connection therewith. During that period, representatives of Cravath sent two response letters to Skydance, which disputed Skydance’s assertions.

On August 21, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview, Paramount and Paramount’s regulatory counsel in attendance, to discuss the August 19 EBJ Proposal. Representatives of Centerview reviewed with the Special Committee the economic terms of the August 19 EBJ Proposal, compared such terms to the economic terms of the Skydance transaction, discussed considerations with respect to the financing of the August 19 EBJ Proposal, and provided context for the strategic plan for Paramount that representatives of the EBJ Investor Group presented to the Special Committee the day prior. Representatives of Cravath also reviewed the proposed governance framework included in the August 19 EBJ Proposal. Representatives of Paramount, Paramount’s regulatory counsel and Cravath also discussed certain regulatory matters in connection with the August 19 EBJ Proposal, providing a preliminary view of the regulatory risk of the transactions contemplated by the August 19 EBJ Proposal and identifying areas for further exploration.

Also on August 21, 2024, the EBJ Investor Group sent an additional letter (the “August 21 EBJ Proposal”) to the Special Committee, which supplemented the terms of the August 19 EBJ Proposal. The August 21 EBJ

 

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Proposal (i) increased the capital to be contributed by the EBJ Investor Group from $4.3 billion to $6.0 billion, with the additional $1.7 billion to be used in part to fund a cash election to holders of Paramount Class B common stock and in part to improve Paramount’s balance sheet, based on an allocation to be agreed with the Special Committee, (ii) stated that EBJ was willing to condition the transaction on a majority-of-the-minority vote, if such a condition was requested in writing by both the Special Committee and NAI, and (iii) included a commitment to collapse Paramount’s dual-class voting structure within three years of the closing date of the transaction.

Additionally, on August 21, 2024, following the receipt of the August 21 EBJ Proposal, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to evaluate the August 19 EBJ Proposal as supplemented by the August 21 EBJ Proposal (the “EBJ Proposal”). Representatives of Cravath reviewed with the Special Committee the applicable standard for determining whether the EBJ Investor Group qualified as an “Excluded Party” under the Transaction Agreement, which would permit the Special Committee to extend the go-shop period with respect to the EBJ Investor Group until September 5, 2024 pursuant to the Transaction Agreement. The participants considered, among other factors, that (i) the amount of capital included in the EBJ Proposal had increased meaningfully from $4.3 billion in the evening of August 19 to $6.0 billion in the afternoon of August 21, (ii) EBJ had indicated he was continuing to actively raise additional capital that would form the basis of a further improved proposal and (iii) the Special Committee had approved additional equity financing sources as “Representatives” under the non-disclosure agreement between Paramount and EBJ, including private equity firms and high net worth individuals, that, if interested in pursuing a transaction with Paramount, would have the funds to support those possible improvements to the EBJ Proposal. Following such discussion, the Special Committee unanimously adopted resolutions determining that the EBJ Proposal would reasonably be expected to lead to a “Superior Proposal” as defined in the Transaction Agreement and, therefore, that the EBJ Investor Group constituted an “Excluded Party” as defined in the Transaction Agreement. Later on August 21, 2024, (i) representatives of Cravath, on behalf of the Special Committee, notified Skydance and representatives of Latham pursuant to the Transaction Agreement that the Special Committee had determined the EBJ Investor Group was an Excluded Party under the Transaction Agreement and (ii) the Special Committee issued a press release announcing that that the go-shop period would (A) expire with respect to all parties other than the EBJ Investor Group at 11:59 p.m., New York City time, on August 21, 2024 and (B) continue solely with respect to the EBJ Investor Group until September 5, 2024.

Between August 21 and August 26, 2024, the Special Committee and its representatives (and Paramount and its representatives, acting at the Special Committee’s direction) (i) continued to engage in discussions and negotiations with the EBJ Investor Group and its representatives regarding the EBJ Proposal and (ii) negotiated drafts of the proposed documentation relating to the EBJ Proposal. During the same period, (i) representatives of Cravath and R&G also exchanged drafts of the proposed documentation relating to the potential transaction between NAI and the EBJ Investor Group and relating to the potential transaction between Paramount and the EBJ Investor Group and (ii) representatives of Cravath shared with representatives of Latham drafts of the proposed documentation relating to the potential transaction between Paramount and the EBJ Investor Group.

During the same period, representatives of Centerview and Cravath held several calls with representatives of the EBJ Investor Group to discuss potential improvements to the economic terms of the EBJ Proposal, including with respect to funding the payment of the termination fee that would be payable to Skydance if the Special Committee terminated the Transaction Agreement to enter into a transaction with the EBJ Investor Group.

On August 22, 2024, the Special Committee met via videoconference, with representatives of Cravath and Centerview in attendance, to discuss updates with respect to the EBJ Proposal, including recent interactions with representatives of NAI and the EBJ Investor Group regarding the EBJ Proposal. During the meeting, the Special Committee directed representatives of Cravath to request, in accordance with the terms of the August 21 EBJ Proposal, a majority-of-the-minority vote condition on behalf of the Special Committee, which the representatives of Cravath did following the meeting.

 

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Between August 22 and August 26, 2024, representatives of Cravath and R&G held multiple discussions regarding the areas of further exploration previously identified by the parties, including financing certainty and regulatory risk. On August 25 and August 26, 2024, representatives of R&G notified representatives of Cravath and members of the Special Committee that, consistent with its contractual obligations under its agreement with affiliates of Skydance, NAI would not support any transaction alternatives that did not have certainty of financing and closing consistent with that provided by the Skydance transaction, and that NAI did not consider the EBJ Proposal, in its current form and based on the information made available by the EBJ Investor Group to date, to offer such certainty.

On August 25, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview, Paramount, Rothschild & Co and the EBJ Investor Group in attendance for all or part of the meeting. During the meeting, representatives of the EBJ Investor Group reviewed their (i) strategic plan for Paramount in the event of a transaction and (ii) projected financial forecast for Paramount through 2028.

On August 26, 2024, the Special Committee met via videoconference, with representatives of Cravath, Centerview, Paramount and Rothschild & Co in attendance for all or part of the meeting, to discuss the EBJ Proposal. Representatives of Paramount management and Rothschild & Co shared their perspectives on the financial plan presented by the EBJ Investor Group the day prior and the key adjustments and underlying assumptions related thereto. The Special Committee and its advisors also reviewed and discussed the economic terms of the EBJ Proposal and how they compared to the economic terms of the Skydance transaction, as well as the information provided as of such date regarding the financing sources for the EBJ Proposal, noting that despite the Special Committee’s multiple requests for information about EBJ’s financing sources, none had been provided. Representatives of Cravath reviewed with the Special Committee legal considerations and the duties of the members of the Special Committee in the context of a transaction involving NAI and the applicable standard and relevant factors for determining whether the EBJ Proposal constituted a “Superior Proposal” under the Transaction Agreement or, alternatively, whether such proposal no longer would reasonably be expected to lead to a Superior Proposal. The Special Committee then determined that a member of the Special Committee would contact EBJ to inquire as to the status and timing of a possible final proposal from the EBJ Investor Group, and that the Special Committee would reconvene later that evening to discuss next steps with respect to the EBJ Proposal in light of the outcome of such discussion.

Following the meeting, a member of the Special Committee and EBJ held a call, during which EBJ stated that the EBJ Investor Group was withdrawing the EBJ Proposal. Shortly after the call, EBJ publicly confirmed the withdrawal of the EBJ Proposal.

The Special Committee then met again via videoconference, with representatives of Cravath and Centerview in attendance, to discuss the withdrawal of the EBJ Proposal and the conclusion of the go-shop process. Later in the evening on August 26, 2024, representatives of Cravath, on behalf of the Special Committee, notified Skydance and representatives of Latham of such withdrawal pursuant to the Transaction Agreement and issued a press release that (i) acknowledged the withdrawal of the EBJ Proposal and (ii) announced that the go-shop period had expired with respect to all parties.

Also on August 26, 2024, a purported representative of PRP sent an acquisition proposal to a member of the Special Committee, which proposal was subsequently amended. The Special Committee, Paramount and their respective advisors have not engaged with PRP or any of its representatives or affiliates since August 21, 2024 with respect to these acquisition proposals, and have conveyed to representatives of PRP that the Special Committee and Paramount are no longer permitted to engage with or explore an alternative transaction with PRP or any other party under the terms of the Transaction Agreement.

 

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Recommendations of the Special Committee and the Paramount Board; Paramount’s Reasons for the Transactions

In January 2024, the Paramount Board formed the Special Committee, comprised solely of independent directors who were not affiliated with NAI, and empowered the Special Committee to, among other things, review, evaluate and negotiate strategic alternatives for Paramount and to make such recommendations to the Paramount Board and to Paramount stockholders as the Special Committee deemed appropriate with respect thereto.

The Special Committee

At a meeting held on July 7, 2024, the Special Committee unanimously adopted resolutions (i) declaring that the Transaction Agreement and the Transactions are advisable and in the best interests of Paramount and its stockholders, (ii) recommending that the Paramount Board approve the Transaction Agreement and the Transactions, including the Mergers, and (iii) recommending that the Paramount Board recommend adoption and approval of the Transaction Agreement and the Transactions, including the Mergers, to Paramount stockholders.

In arriving at this determination and recommendation, the Special Committee reviewed and discussed a significant amount of information (including information from Paramount management and Skydance management) and consulted with its independent legal and financial advisors. The following are some of the significant factors that supported the Special Committee’s determination and recommendation (these factors are presented below in no particular order and were neither ranked nor weighted in any manner by the Special Committee):

 

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the Special Committee’s knowledge and understanding of Paramount’s business, operations, assets and liabilities, financial condition, earnings, strategy and future prospects (including the risks involved in seeking to achieve such prospects);

 

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the information obtained in the Special Committee’s discussions with Paramount management, in consultation with the Special Committee’s and Paramount’s advisors, regarding Skydance’s business, operations, assets and liabilities, financial condition, strategy and future prospects (including the risks involved in seeking to achieve such prospects), and the results of Paramount’s due diligence review of Skydance;

 

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the current and prospective business climate in the industries in which Paramount operates, including the position of current and likely competitors of Paramount, and the view that Paramount faced ongoing risks from industry trends and dynamics and that such risks could be more effectively mitigated by the Transactions relative to potential alternative transactions or remaining a standalone company, including as a result of the substantial cash infusion from the PIPE Transaction and the anticipated synergies from the Skydance Merger;

 

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the current and historical trading prices of Paramount common stock, including that the trading price of Paramount Class A common stock had declined approximately 57% between the date of the merger of CBS and Viacom and the date of the formation of the Special Committee, and that the trading price of Paramount Class B common stock had declined approximately 65% during the same period;

 

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the belief of the Special Committee that the merger consideration being offered to Paramount’s Public Stockholders in connection with the Transactions will provide such stockholders with an attractive value for their shares of Paramount common stock based on a number of factors, including:

 

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the fact that Paramount’s Public Stockholders will have a choice as to whether to elect to receive their merger consideration in the form of stock consideration or cash consideration (subject to the proration mechanism for cash elections described in the section entitled “Summary of the Transaction Agreement—Merger Consideration; Conversion of Shares; Exchange of Certificates—Proration” beginning on page 176 of this information statement/prospectus);

 

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the fact that Paramount stockholders who receive shares of New Paramount common stock as merger consideration will participate in any future increase in the value of New Paramount;

 

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the fact that the option to elect to receive merger consideration in the form of cash consideration will provide immediate value and liquidity to Paramount stockholders who make a cash election (subject to the proration mechanism described in the section entitled “Summary of the Transaction Agreement—Merger Consideration; Conversion of Shares; Exchange of Certificates—Proration” beginning on page 176 of this information statement/prospectus);

 

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the fact that (i) the Class B Cash Consideration represented a premium of approximately 48% to the trading price of the Paramount Class B common stock as of the close of trading on July 1, 2024, the last trading day prior to renewed market speculation regarding the Transactions, and (ii) the Class A Cash Consideration represented a premium of approximately 28% to the trading price of the Paramount Class A common stock as of the close of trading on such date; and

 

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the belief of the Special Committee, based on the extensive arm’s-length negotiations between the Special Committee and its advisors, on the one hand, and Skydance and the PIPE Equity Investors and their respective advisors, on the other hand, that the stock consideration exchange ratios were the most favorable exchange ratios, and the aggregate cash consideration was the highest amount of cash, in each case, to which Skydance and the PIPE Equity Investors would agree without creating a significant risk of causing Skydance and the PIPE Equity Investors to materially delay entering into the Transactions or abandon the Transactions altogether;

 

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the extensive arm’s-length negotiations between the Special Committee and its advisors and other representatives, on the one hand, and Skydance and the PIPE Equity Investors and their respective advisors and other representatives, on the other hand, and the benefits that Paramount was able to obtain as a result of such negotiations, which, among other things, resulted in (i) an increase in the aggregate cash contribution to be made by the PIPE Equity Investors in the Transactions from $1–3 billion in Skydance’s initial transaction proposal to up to $6 billion, (ii) an increase in the cash consideration payable to Paramount’s Public Stockholders in the Transactions from $0 in Skydance’s initial transaction proposal to up to $4.5 billion and (iii) the revision of the terms of the Transactions to be more favorable to Paramount and its stockholders than initially proposed by Skydance and the PIPE Equity Investors, including (A) an increase in the overall consideration to be paid to Paramount’s Public Stockholders (as described in the section entitled “—Background of the Transactions” beginning on page 93 of this information statement/prospectus) and (B) the inclusion of a go-shop period that enabled the Special Committee, subject to the terms of the Transaction Agreement, to continue, following Paramount’s entry into the Transaction Agreement, to explore the availability of alternative transactions that would provide superior value to Paramount’s Public Stockholders;

 

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the potential risks and uncertainties associated with Paramount remaining a standalone company as a possible strategic alternative to entering into the Transactions, including the risk factors set forth in Paramount’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and the Special Committee’s assessment of the possible impact of those risks and uncertainties on Paramount’s business and operations as well as the trading prices of the Paramount Class A common stock and Paramount Class B common stock;

 

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Paramount’s financing needs in order to implement its strategic plans, and the costs and other challenges associated with obtaining such financing, including in light of Paramount’s significant amount of outstanding indebtedness, Paramount’s leverage levels and S&P’s March 2024 downgrade of Paramount’s credit rating to a below-investment grade rating;

 

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the Special Committee’s assessment of other potential disruptions to Paramount’s business, operations, employees, customers and other stakeholders (other than NAI) and the potential impact on Paramount’s financial results and the trading prices of the Paramount Class A common stock and Paramount Class B common stock that could result from a failure to announce the Transactions on a timely basis or at all;

 

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the absence of other strategic alternatives available to Paramount that the Special Committee (i) considered to be actionable and (ii) believed would provide comparable or superior value to Paramount’s Public Stockholders based on a number of factors, including:

 

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the fact that Special Committee conducted an extensive process to thoroughly explore a wide range of strategic alternatives over the course of approximately six months;

 

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the fact that the concurrent exploration of potential strategic alternatives by both Paramount and its controlling stockholder, NAI, was widely reported by the media (including with respect to purported details of such processes such as possibly interested parties and possible deal terms), the view of the Special Committee that such widespread media reporting provided any potentially interested parties with extensive opportunities to express such interest, and the belief of the Special Committee that the limited number of indications of interest received from potentially interested parties throughout the approximately six months that the Special Committee explored strategic alternatives (despite such widespread media reporting) indicated that it was unlikely that there were strategic alternatives available to Paramount that would provide comparable or superior value to Paramount’s Public Stockholders;

 

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the view of the Special Committee that there were a limited number of viable potential counterparties to a strategic transaction involving all of Paramount due to a number of factors, including (i) the regulatory approvals required to transfer control of Paramount’s television broadcast licenses and (ii) the regulatory environment for mergers and other strategic transactions in the media sector;

 

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the fact that (i) throughout the course of the exploration of strategic alternatives by the Special Committee, NAI directly or indirectly owned approximately 77.4% of Paramount’s voting Class A common stock, (ii) in accordance with the Paramount charter, any transaction requiring approval of at least a majority of Paramount stockholders ultimately would not be feasible without the consent of NAI and (iii) NAI had provided its view that a sale of Paramount Studios would not be in the long-term best interests of Paramount or its stockholders and noted its concerns with the go-forward strategy for Paramount in the event Paramount Studios was sold, and, given this view and these concerns, did not support a possible sale of Paramount Studios at even twice the $11 billion valuation proposed in the March 6 Party C Proposal, a price the Special Committee considered realistically unattainable (as described in the section entitled “—Background of the Transactions” beginning on page 93 of this information statement/prospectus), which view led the Special Committee to focus on pursuing strategic alternatives involving all of Paramount;

 

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the belief of the Special Committee, including in light of NAI’s stated view that a sale of Paramount Studios would not be in the long-term best interests of Paramount or its stockholders and NAI’s stated concerns with the go-forward strategy for Paramount in the event Paramount Studios was sold and, given this view and these concerns, NAI’s lack of support for a sale of the Paramount Studios at a price even twice the $11 billion valuation proposed in the March 6 Party C Proposal, which the Special Committee did not consider realistically attainable, that a transaction involving all of Paramount likely would be more attractive to Paramount stockholders than alternative transactions that the Special Committee considered to be actionable, and that the only other parties who submitted a proposal for a transaction involving all of Paramount prior to the entry into the Transaction Agreement did not progress beyond the due diligence stage; and

 

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the fact that, at the time of Paramount’s entry into the Transaction Agreement, Paramount was not actively engaged in discussions regarding a potential transaction with any party other than Skydance and the PIPE Equity Investors;

 

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the belief of the Special Committee that (i) based on the reduction of dividends on Paramount’s common stock in May 2023 and the decision by S&P to lower NAI’s issuer credit rating in May 2024, NAI had significant liquidity constraints that would impede NAI’s ability to repay its outstanding debt

 

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without a sale of NAI or the controlling stake in Paramount held by NAI, (ii) based on discussions between the Special Committee and its advisors, on the one hand, and NAI and its advisors, on the other hand, NAI was exploring NAI-only transactions and was interested in entering into a transaction in the near term and (iii) NAI’s only then-existing alternatives to the Skydance transaction were NAI-only transactions that would not provide consideration to Paramount’s Public Stockholders and that such an NAI-only transaction, therefore, would not be likely to maximize value for Paramount’s Public Stockholders in the near-term;

 

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the fact that the Specified Stockholders supported the Transactions and that such support was sufficient to provide the requisite approval of the Transactions by Paramount stockholders;

 

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the review by the Special Committee with its independent legal and financial advisors of, and advice received from such advisors on, the structure of the Transactions and the financial and other terms of the Transaction Agreement and the other agreements entered into in connection with the Transactions (as described in the sections entitled “Summary of the Transaction Agreement” and “Summary of Certain Agreements Related to the Transactions” beginning on pages 168 and 208, respectively, of this information statement/prospectus), including with respect to governance matters, deal protection, conditionality, termination rights and the likelihood of consummating the Transactions (including with respect to obtaining required stockholder approvals and required regulatory approvals);

 

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the provisions of the Transaction Agreement that enabled Paramount, during the 45-day period beginning on the date of the Transaction Agreement (subject to an extension of up to 15 days for certain qualifying parties), to solicit, initiate, discuss and negotiate alternative acquisition proposals, including Paramount’s right to terminate the Transaction Agreement in certain circumstances to accept a superior proposal, subject to certain conditions, as described in the section entitled “Summary of the Transaction Agreement—Go-Shop; No Solicitation; Change in Board Recommendation” beginning on page 188 of this information statement/prospectus, and the related fact that the Transaction Agreement contains deal protection provisions which, in the view of the Special Committee, likely would not have unduly deterred any interested third party from making, or inhibited the Special Committee from approving, a superior proposal during such period, including the fact that the termination fee of $400 million payable by Paramount to Skydance is only payable in certain limited circumstances, and the Special Committee’s belief that the size of the termination fee is typical of such fees in similar transactions;

 

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the belief of the Special Committee that the Transactions have a high likelihood of being completed in a timely manner based on a number of factors, including:

 

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the closing conditions and the circumstances in which Skydance may terminate the Transaction Agreement being specific and limited, including the fact that there is no financing condition;

 

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the fact that the requisite approval of the Transactions by Paramount stockholders was obtained on the date that the parties entered into the Transaction Agreement;

 

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the Special Committee’s assessment of the regulatory risk associated with the Transactions;

 

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the fact that the End Date will automatically be extended by 90 days on up to two occasions in certain circumstances if the Transactions have not been completed on or prior to April 7, 2025, which is anticipated to allow for sufficient time to obtain required regulatory approvals while limiting the length of time during which Paramount is required to operate subject to the restrictions on interim operations set forth in the Transaction Agreement; and

 

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the fact that Paramount may specifically enforce Skydance’s obligations under the Transaction Agreement;

 

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the Special Committee’s assessment, taking into account the other factors described herein, of Paramount’s value on a standalone basis relative to the value of the merger consideration, and the possibility that the trading prices of the Paramount Class A common stock and Paramount Class B

 

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common stock would not otherwise reach the value of the Class A Cash Consideration or the Class B Cash Consideration, respectively, or that doing so could take a considerable period of time;

 

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the opinion of Centerview rendered to the Special Committee on July 7, 2024, which was subsequently confirmed by delivery of a written opinion dated such date, that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the merger consideration to be paid to Paramount stockholders (other than as specified in such opinion) pursuant to the Transaction Agreement was fair, from a financial point of view, to such holders, as more fully described in the section entitled “—Opinion of the Special Committee’s Financial Advisor” beginning on page 154 of this information statement/prospectus;

 

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the Special Committee’s assessment of the business reputation and financial wherewithal of Skydance and the PIPE Equity Investors; and

 

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the belief of the Special Committee that the Transactions will likely provide a number of significant strategic advantages and opportunities, including:

 

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the fact that holders of the voting interests in New Paramount common stock will have a significant economic interest in New Paramount immediately following the completion of the Transactions;

 

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the view that New Paramount will have enhanced balance sheet flexibility, which, among other things, will allow New Paramount to invest in new initiatives, including in growth areas, and create an accelerated path to achieve investment grade levels across all three rating agencies; and

 

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the view that, in light of the complementary nature of portions of the respective businesses of Paramount and Skydance, the Transactions are expected to result in certain synergies, and the fact that Paramount stockholders who receive all or a portion of their merger consideration in stock would participate in the benefits of such synergies through their ownership interests in New Paramount.

The Special Committee weighed these factors against a number of uncertainties, risks and potentially negative factors relevant to the Transactions, including the following (these factors are presented below in no particular order and were neither ranked nor weighted in any manner by the Special Committee):

 

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the conditions to the obligations of Skydance and the PIPE Equity Investors to complete the Transactions, including the requirement to obtain certain regulatory clearances and consents and the concurrent closing of the NAI Transaction, and the right of Skydance to terminate the Transaction Agreement under certain circumstances without paying a termination fee to Paramount, including if the required regulatory clearances and consents are not obtained;

 

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the risk that the Transactions may not be completed in a timely manner (or at all), and the effect that failing to complete the Transactions in a timely manner (or at all) might have on the business, operations, financial results and the trading price of Paramount Class A common stock and Paramount Class B common stock or perceptions of Paramount among investors, customers, employees and other stakeholders (other than NAI);

 

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the challenges inherent in the combination of two independent businesses of the size and scope of Paramount and Skydance, including the possibility that the anticipated strategic and other anticipated benefits of the transaction, including the anticipated synergies and other anticipated cost savings, might not be achieved in the time frame contemplated or at all, and the other numerous risks and uncertainties that, if the Transactions are completed, could adversely affect New Paramount’s business, operations, financial results and trading price;

 

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the restrictions on the conduct of Paramount’s business prior to the Closing that require Paramount to conduct its business in the ordinary course and prevent Paramount from taking certain specified

 

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actions, subject to certain specified limitations, which could delay or prevent Paramount from undertaking certain business opportunities pending completion of the Transactions;

 

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the adverse impact that business uncertainty prior to the Closing and during the post-Closing integration period could have on the ability of both Paramount and Skydance prior to the Closing, and New Paramount following the Closing, to attract, retain and motivate key personnel and maintain business relationships with customers and other stakeholders;

 

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the risk that the Transactions might divert management focus and resources from operating Paramount’s business, as well as other strategic opportunities, and that combining and integrating Paramount and Skydance might result in potential disruption to New Paramount’s business and other strategic opportunities if the Transactions are completed;

 

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the risk that the unaudited prospective financial information of Paramount and Skydance, as described in the section entitled “—Certain Unaudited Prospective Financial Information” beginning on page 149 of this information statement/prospectus, and the Synergies, might not be achieved in the amounts or at the times anticipated;

 

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any potential upside in Paramount’s strategic plan as a standalone company, and the fact that Paramount stockholders will forgo any future increase in the value of Paramount common stock that might result from Paramount’s possible growth as a standalone company other than (with respect to those Paramount stockholders who receive stock consideration) through ownership of New Paramount common stock;

 

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the fact that, pursuant to the terms of the Transaction Agreement, following the expiration of the go-shop period, Paramount is restricted from (i) soliciting, initiating, knowingly facilitating or knowingly encouraging the submission of an acquisition proposal, (ii) discussing any acquisition proposal submitted by a third party with such third party and (iii) terminating the Transaction Agreement to enter into a superior proposal;

 

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the possibility that, despite the Special Committee’s thorough exploration of strategic alternatives over the course of approximately eight months (including during the go-shop period), another party might have been willing to pay a higher purchase price for Paramount than the merger consideration;

 

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the fact that Paramount stockholders who elect to receive cash for their shares of Paramount common stock might only receive a portion of the cash elected as a result of the proration mechanism set forth in the Transaction Agreement and described herein;

 

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the fact that Paramount’s Public Stockholders that own shares of Paramount Class A common stock will receive a differential premium for such shares relative to Paramount’s Public Stockholders that own shares of Paramount Class B common stock;

 

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the fact that the exchange ratios set forth in the Transaction Agreement and described herein will not be adjusted to reflect any changes in the trading price of Paramount Class A common stock or Paramount Class B common stock or the performance of each of Paramount or Skydance independently and relative to one another during the period between the date of the entry into the Transaction Agreement and the Closing Date;

 

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the fact that Paramount stockholders are not entitled to appraisal rights under the Transaction Agreement, the DGCL or otherwise;

 

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the significant costs involved in connection with entering into the Transaction Agreement and consummating the Transactions (many of which are payable regardless of whether the Transactions are consummated), including the risk that Paramount might become obligated to pay Skydance $400 million in connection with a termination of the Transaction Agreement under certain circumstances, as described in the section entitled “Summary of the Transaction Agreement—Effect of Termination; Termination Fee; Expenses” beginning on page 205 of this information statement/prospectus;

 

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the fact that, immediately following the completion of the Transactions, the Specified NAI Entities will hold 100.0% of the voting power of New Paramount, and New Paramount will be controlled indirectly by the Ellison family, and that as a “controlled company” under Nasdaq rules New Paramount intends to elect not to comply with certain corporate governance requirements and it is expected that a majority of the New Paramount directors will not be “independent” within the meaning of Nasdaq rules;

 

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the fact that shares of New Paramount Class B common stock to be received by Paramount stockholders as merger consideration will have rights that are different from the rights of shares of Paramount Class A common stock and Paramount Class B common stock, as described in the section entitled “Comparison of Stockholder Rights” beginning on page 296 in this information statement/prospectus;

 

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the interests of the Specified Stockholders with respect to the Transactions and the NAI Transaction that are in addition to, and that are different from, the interests of Paramount’s Public Stockholders, as described in the section entitled “Interests of Affiliates in the Transactions” beginning on page 267 of this information statement/prospectus;

 

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the interests of Paramount’s directors and executive officers with respect to the Transactions that may be in addition to, or that may be different from, their interests as Paramount stockholders, as described in the section entitled “Interests of Affiliates in the Transactions” beginning on page 267 of this information statement/prospectus;

 

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the risk of litigation arising from Paramount stockholders in respect of the Transaction Agreement or the Transactions;

 

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that the receipt of cash consideration by Paramount stockholders will be taxable for U.S. federal income tax purposes, as described in the section entitled “Material United States Federal Income Tax Consequences” beginning on page 279 of this information statement/prospectus; and

 

•

the risks of the type and nature described in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 45 and 84, respectively, of this information statement/prospectus.

The Special Committee also considered the fact that, despite its initial request that the Closing be conditioned on the receipt of the affirmative vote of a majority of Paramount’s Public Stockholders, the Transactions are not conditioned on such a vote. In connection therewith, the Special Committee ultimately concluded that it was in the best interests of Paramount and Paramount’s Public Stockholders to enter into the Transactions (on the terms set forth in the Transaction Agreement) without a majority-of-the-minority vote condition based on the following factors (these factors are presented below in no particular order and were neither ranked nor weighted in any manner by the Special Committee):

 

•

the fact that Skydance and the PIPE Equity Investors repeatedly stated that they would not agree to condition the Transactions on a majority-of-the-minority vote;

 

•

the belief of the Special Committee that continuing to insist on a majority-of-the-minority vote condition (or not recommending approval of the Transactions unless they had such a condition) would create a substantial risk of causing Skydance and the PIPE Equity Investors to abandon the Transactions altogether;

 

•

the fact that the 45-day go-shop period (subject to an extension of up to 15 days for certain qualifying parties) that the Special Committee negotiated to include in the Transaction Agreement provided potential counterparties with an additional opportunity to propose a transaction with Paramount that would provide superior value to Paramount’s Public Stockholders; and

 

•

the fact that the Special Committee believed, including for the reasons described above, that the terms of the Transactions represented the most favorable terms that could be obtained from Skydance and the PIPE Equity Investors and that entering into the Transactions (on the terms set forth in the Transaction

 

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Agreement) was in the best interests of Paramount and Paramount’s Public Stockholders relative to Paramount remaining a standalone company.

In evaluating the Transactions, the Special Committee did not seek to value NAI or allocate the consideration in the NAI Transaction to the non-Paramount assets of NAI. Instead, the Special Committee compared the total proceeds resulting from the NAI Transaction against the number of shares of Paramount common stock owned by NAI and its subsidiaries.

The Special Committee concluded that the uncertainties, risks and potentially negative factors relevant to the Transactions were outweighed by the potential benefits that the Special Committee expected Paramount and Paramount stockholders would achieve as a result of the Transactions.

The Paramount Board

At a meeting of the Paramount Board held on July 7, 2024, following the meeting of the Special Committee, the members of the Paramount Board who were present at such meeting (each of whom was unaffiliated with NAI) unanimously adopted resolutions (i) declaring that the Transaction Agreement and the Transactions are advisable and in the best interests of Paramount and its stockholders, (ii) approving and declaring advisable the Transaction Agreement and the Transactions, (iii) authorizing and approving the execution, delivery and performance by Paramount of the Transaction Agreement and the consummation of the Transactions upon the terms and subject to the conditions set forth in the Transaction Agreement, (iv) recommending that Paramount stockholders entitled to vote adopt the Transaction Agreement and (v) directing that the Transaction Agreement and the Transactions, including the Mergers, be submitted to Paramount stockholders entitled to vote for adoption. The members of the Paramount Board who were present at the meeting were Barbara M. Byrne, Linda M. Griego, Judith A. McHale, Charles E. Phillips, Jr. and Susan Schuman. Shari E. Redstone recused herself from the meeting and was not in attendance.

In arriving at this determination and recommendation, the Paramount Board reviewed and discussed a significant amount of information (including information from Paramount management and Skydance management) and consulted with the Special Committee and its legal and financial advisors. The following are some of the significant factors that supported the Paramount Board’s determination and recommendation (these factors are presented below in no particular order and were neither ranked nor weighted in any manner by the Paramount Board):

 

•

the factors considered by the Special Committee that are listed in the section entitled “—The Special Committee” beginning on page 140 of this information statement/prospectus, and the fact that the Special Committee made its evaluation of the Transaction Agreement and the Transactions based upon such factors;

 

•

the Special Committee’s unanimous determination (i) declaring that the Transaction Agreement and the Transactions are advisable and in the best interests of Paramount and its stockholders, (ii) recommending that the Paramount Board approve the Transaction Agreement and the Transactions, including the Mergers, and (iii) recommending that the Paramount Board recommend adoption and approval of the Transaction Agreement and the Transactions, including the Mergers, to Paramount stockholders;

 

•

the procedural safeguards implemented that the Paramount Board believed would ensure the fairness of the Transactions and permit the Special Committee to effectively represent the interests of Paramount’s Public Stockholders, including that:

 

•

the Special Committee is comprised solely of independent directors, each of whom is unaffiliated with NAI;

 

•

the Paramount Board resolved that it would not approve a transaction with Skydance unless the Special Committee recommended it;

 

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•

the Special Committee was empowered to reject a transaction with Skydance if the Special Committee determined to do so in its sole discretion;

 

•

the Special Committee was empowered to recommend or reject any other strategic alternative that it determined to consider in its sole discretion;

 

•

the Special Committee retained and was advised by its own independent, experienced and qualified legal and financial advisors;

 

•

the Special Committee requested and received a fairness opinion from Centerview;

 

•

the terms of the Transactions were determined through extensive arm’s-length negotiations between the Special Committee and its advisors and other representatives, on the one hand, and Skydance and the PIPE Equity Investors and their respective advisors and other representatives, on the other hand, over the course of a total active period of approximately six months;

 

•

the authority granted to the Special Committee under the Transaction Agreement to control Paramount’s enforcement or defense of rights under the Transaction Agreement (including Paramount’s rights related to termination and specific performance); and

 

•

the compensation of the members of the Special Committee was in no way contingent on their approval of any transaction, including the Transactions; and

 

•

the fact that the Special Committee was involved in frequent and extensive deliberations over the course of approximately six months, including more than 80 formal meetings of the Special Committee as well as numerous informal meetings, and was provided with full access to Paramount management and Paramount’s advisors (in addition to the Special Committee’s independent advisors) in connection with its evaluation of strategic alternatives during such period.

The Paramount Board also considered the fact that the Special Committee, after initially requesting that the Closing be conditioned on the receipt of the affirmative vote of a majority of Paramount’s Public Stockholders, ultimately concluded that it was in the best interests of Paramount and Paramount’s Public Stockholders to enter into the Transactions (on the terms set forth in the Transaction Agreement) without a majority-of-the-minority vote condition, as described in the section entitled “—The Special Committee” beginning on page 140 of this information statement/prospectus.

The Paramount Board weighed these factors against a number of uncertainties, risks and potentially negative factors relevant to the Transactions, including those that are listed in the section entitled “—The Special Committee” beginning on page 140 of this information statement/prospectus.

The Paramount Board concluded that the uncertainties, risks and potentially negative factors relevant to the Transactions were outweighed by the potential benefits that the Paramount Board expected Paramount and Paramount stockholders would achieve as a result of the Transactions.

In considering the recommendation of each of the Special Committee and the Paramount Board, Paramount stockholders should be aware that certain of Paramount’s directors and executive officers have interests with respect to the Transactions that may be in addition to, or that may be different from, the interests of Paramount stockholders generally. See the section entitled “Interests of Affiliates in the Transactions” beginning on page 267 of this information statement/prospectus.

The foregoing discussion of the information and factors considered by the Special Committee and the Paramount Board includes the principal factors considered by the Special Committee and the Paramount Board, respectively, but is not intended to be exhaustive and may not include all of the factors considered. In view of the wide variety of factors considered in connection with its evaluation of the Transactions and the complexity of these matters, neither the Special Committee nor the Paramount Board found it useful to nor attempted to

 

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quantify, rank or otherwise assign relative weights to these factors. Rather, each of the Special Committee and the Paramount Board viewed its determination and recommendation as being based on the totality of the information presented to it and the factors it considered. In addition, individual members of the Special Committee or the Paramount Board may have given differing weights to different factors. It should be noted that this explanation of the reasoning of the Special Committee and the Paramount Board and certain information presented in this section is forward-looking in nature and, therefore, that information should be read in light of the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 84 of this information statement/prospectus.

Certain Unaudited Prospective Financial Information

Paramount Unaudited Prospective Financial Information

Paramount does not currently as a matter of course publicly disclose projections as to future performance, revenues, earnings or other results due to, among other reasons, the inherent uncertainty and subjectivity of the underlying assumptions and estimates, especially in respect of projections covering extended periods of time. However, in January 2024, in connection with the Special Committee’s evaluation of Paramount’s strategic alternatives, Paramount management prepared and provided to the Special Committee and Centerview certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of Paramount, including certain financial forecasts, analyses and projections relating to Paramount on a standalone basis for the fiscal years 2024 through 2028 based on assumptions that Paramount management believed to be reasonable at the time of such preparation (the “Paramount January 2024 Forecasts”).

In April 2024, in connection with the Special Committee’s evaluation of Paramount’s strategic alternatives, Paramount management updated the Paramount January 2024 Forecasts to take into account certain adjustments relating to, among other things, (i) a reduction in TV Media revenues based on Paramount management’s estimate of future advertising and linear affiliate trends, (ii) slower revenue growth of Paramount+ due to changes in subscriber mix, (iii) a potential pivot of the Paramount+ service in international markets to a licensing model to be initiated in 2024, (iv) certain expense-reduction initiatives and (v) the removal of certain reductions to Free Cash Flow from 2025E through 2028E that had reflected management conservatism in the Paramount January 2024 Forecasts (as so updated, the “Paramount April 2024 Forecasts”).

In May 2024, in connection with the Special Committee’s evaluation of Paramount’s strategic alternatives, and following certain changes in the Paramount management team as further described in the section entitled “The Transactions—Background of the Transactions” beginning on page 93 of this information statement/prospectus, Paramount management updated the Paramount April 2024 Forecasts to take into account certain further adjustments relating to, among other things, (i) a further reduction in TV Media revenues based on Paramount management’s latest estimate of future advertising trends and indicators in the linear affiliate marketplace, (ii) certain additional expense-reduction initiatives and (iii) cash restructuring payments resulting from the expense-reduction initiatives (as so updated, the “Paramount May 2024 Forecasts” and, together with the Paramount January 2024 Forecasts and the Paramount April 2024 Forecasts, the “Paramount Management Forecasts”).

The Paramount Management Forecasts were provided to the Special Committee in connection with its evaluation of Paramount’s strategic alternatives and the Paramount May 2024 Forecasts were provided to Centerview for its use and reliance in connection with its financial analysis and opinion, as described in the section entitled “—Opinion of the Special Committee’s Financial Advisor” beginning on page 154 of this information statement/prospectus. At the direction of the Special Committee, the Paramount Management Forecasts were also provided to Skydance to facilitate Skydance’s evaluation of the Transactions.

 

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The following table presents a summary of the Paramount January 2024 Forecasts, the Paramount April 2024 Forecasts and the Paramount May 2024 Forecasts (amounts reflect rounding):

 

Paramount January 2024 Forecasts
($ in millions)		2024E				2025E				2026E				2027E				2028E
Revenue		$	30,595			$	31,761			$	32,974			$	34,124			$	36,082
Adjusted OIBDA(1)		$	3,100			$	3,108			$	3,586			$	4,015			$	4,535
Free Cash Flow(2)		$	250			$	272			$	707			$	1,168			$	1,752
Paramount April 2024 Forecasts
($ in millions)		2024E				2025E				2026E				2027E				2028E
Revenue		$	30,163			$	30,400			$	30,894			$	31,580			$	33,191
Adjusted OIBDA(1)		$	3,265			$	3,363			$	3,617			$	3,693			$	4,204
Free Cash Flow(2)		$	302			$	782			$	1,571			$	1,621			$	2,020
Paramount May 2024 Forecasts
($ in millions)		2024E				2025E				2026E				2027E				2028E
Revenue		$	30,224			$	30,226			$	30,519			$	31,018			$	32,643
Adjusted OIBDA(1)		$	3,083			$	3,593			$	3,476			$	3,466			$	4,042
Free Cash Flow(2)(3)		$	240			$	323			$	1,436			$	1,357			$	1,745

 

(1)

Adjusted OIBDA is a non-GAAP financial measure defined as operating income before depreciation and amortization, further adjusted to exclude programming charges, impairment charges, gains or losses on dispositions and restructuring charges and other corporate matters. Paramount management uses this measure to, among other things, evaluate its operating performance, plan and forecast future periods and value prospective acquisitions.

(2)

Free Cash Flow is a non-GAAP financial measure defined as net cash flow provided by (used for) operating activities from continuing operations less capital expenditures. Paramount management believes Free Cash Flow provides investors with an important perspective on the cash available to it to service debt, pay dividends, make strategic acquisitions and investments, maintain its capital assets, satisfy its tax obligations, and fund ongoing operations and working capital needs.

(3)

For purposes of Centerview’s financial analysis and opinion, Centerview calculated “Unlevered Free Cash Flow” by subtracting from Adjusted OIBDA per the Paramount May 2024 Forecasts, all as provided by Paramount management: (i) cash taxes, (ii) cash flows associated with changes in net working capital, (iii) capital expenditures and (iv) restructuring costs, which resulted in the following figures ($ in millions):

 

($ in millions)		2024E				2025E				2026E				2027E				2028E
Unlevered Free Cash Flow		$	313	(1)		$	802			$	1,925			$	1,863			$	2,319

 

(1)

Reflects estimated Unlevered Free Cash Flow for Q2-Q4 2024.

Skydance Unaudited Prospective Financial Information

Skydance does not currently as a matter of course publicly disclose projections as to future performance, revenues, earnings or other results due to, among other reasons, the inherent uncertainty and subjectivity of the underlying assumptions and estimates, especially in respect of projections covering extended periods of time. However, in March 2024, in connection with the Special Committee’s evaluation of Paramount’s strategic alternatives, Skydance management prepared and provided to the Special Committee and Centerview certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of Skydance on a standalone basis for the fiscal years 2024 through 2028 based on assumptions that Skydance

 

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management believed to be reasonable at the time of such preparation (the “Unadjusted Skydance Management Forecasts”). The Unadjusted Skydance Management Forecasts were provided to the Special Committee and Centerview in connection with the Special Committee’s evaluation of a potential transaction between Paramount and Skydance.

The Unadjusted Skydance Management Forecasts were reviewed and subsequently adjusted downward by the Special Committee after consultation with Centerview and Paramount management based on, among other things, the due diligence Paramount conducted on Skydance and Paramount management’s view of market trends in the industry and of risks and opportunities facing Skydance (the “Committee Adjusted Skydance Forecasts” and, together with the Unadjusted Skydance Management Forecasts, the “Skydance Forecasts”). Compared to the Unadjusted Skydance Management Forecasts, the Committee Adjusted Skydance Forecasts reflected reductions to revenue, Adjusted OIBDA, Free Cash Flow and Unlevered Free Cash Flow in all periods. The Committee Adjusted Skydance Forecasts were considered by the Special Committee in connection with its evaluation of Paramount’s strategic alternatives and, at the Special Committee’s direction, were used by Centerview in connection with its financial analysis and opinion, as described in the section entitled “—Opinion of the Special Committee’s Financial Advisor” beginning on page 154 of this information statement/prospectus.

The following table presents a summary of the Committee Adjusted Skydance Forecasts (amounts reflect rounding):

 

Committee Adjusted Skydance Forecasts
($ in millions)		2024E				2025E				2026E				2027E				2028E
Revenue		$	974			$	2,267			$	2,344			$	2,448			$	2,598
Adjusted EBITDA(1)		$	78			$	275			$	339			$	388			$	460
Adjusted EBITDA Attributable to Skydance(2)		$	72			$	258			$	307			$	349			$	413
Free Cash Flow(3)(4)		($	210	)		$	37			$	253			$	431			$	488

 

(1)	Adjusted EBITDA is a non-GAAP financial measure defined as net income (loss), excluding (i) amortization of capitalized interest, (ii) interest expense, (iii) statutory tax (other than corporate taxes) and (iv) depreciation and amortization.

(2)	Adjusted EBITDA Attributable to Skydance is a non-GAAP financial measure defined as Adjusted EBITDA excluding the net profit (loss) from non-controlling interest.

(3)	Free Cash Flow is a non-GAAP financial measure defined as Adjusted EBITDA, excluding equity-based compensation, less (i) cash flows associated with changes in net working capital and (ii) capital expenditures.

(4)

For purposes of Centerview’s financial analysis and opinion, Centerview calculated “Unlevered Free Cash Flow” by adjusting Free Cash Flow per the Committee Adjusted Skydance Forecasts to give effect to equity-based compensation and taxes, as directed by the Special Committee, which resulted in the following figures ($ in millions):

 

($ in millions)		2024E				2025E				2026E				2027E				2028E
Unlevered Free Cash Flow		($	345	)(1)		($	40	)		$	162			$	329			$	368

 

(1)

Reflects estimated Unlevered Free Cash Flow for Q2-Q4 2024.

Cautionary Statement Regarding Unaudited Prospective Financial Information

The inclusion of information about the Paramount Management Forecasts, the Skydance Forecasts and the Synergies (collectively, the “Forecasts”) in this information statement/prospectus should not be regarded as an indication that any of Paramount, Skydance, any of their respective affiliates, officers, directors, advisors or other representatives (including financial advisors) or any other person considered, or now considers, such information

 

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necessarily predictive of actual future results or material information given the inherent risks and uncertainties associated with such projections. Paramount has included information about the Forecasts in this information statement/prospectus solely because they were among the non-public financial information that was made available to the Special Committee in connection with its evaluation of Paramount’s strategic alternatives and to Centerview in connection with its financial analysis and opinion. Such information is not being included in this information statement/prospectus in order to influence any Paramount stockholder or any other person in making any investment decision.

The Forecasts are subjective in many respects and, thus, subject to interpretation. Although presented with numeric specificity, the Forecasts were based on numerous estimates and assumptions with respect to industry performance and competition, general business, economic, market and financial conditions and matters specific to Paramount’s and Skydance’s businesses, including the factors listed under “Risk Factors” beginning on page 45 of this information statement/prospectus, all of which are difficult to predict and many of which are beyond the control of Paramount, Skydance and New Paramount. There can be no assurance that the assumptions underlying the Forecasts will be realized.

Many of the assumptions reflected in the Forecasts are subject to change and such projections do not reflect revised prospects for Paramount’s or Skydance’s businesses, changes in general, business, economic, market or financial conditions or any other transaction or event that has occurred or that may occur and that was not anticipated at the time such financial information was prepared. Neither Paramount nor Skydance has updated or intends to update or otherwise revise the Forecasts. There can be no assurance that the prospective results reflected in any of the Forecasts will be realized or that actual results will not materially vary from such projections. In addition, the Forecasts cover multiple years and such information by its nature becomes less predictive with each successive year. Therefore, the Forecasts included in this information statement/prospectus should not be relied on as necessarily predictive of actual future events nor construed as financial guidance.

Paramount stockholders are urged to review Paramount’s most recent SEC filings for a description of risk factors with respect to Paramount’s business. You should read “Cautionary Statement Regarding Forward-Looking Statements” and “Where You Can Find More Information” beginning on pages 84 and 316, respectively, of this information statement/prospectus for additional information regarding the risks inherent in forward-looking information such as the Forecasts.

The Paramount Management Forecasts were prepared by, and are the sole responsibility of, Paramount management. Skydance management prepared and provided to the Special Committee and Centerview the Unadjusted Skydance Management Forecasts which were reviewed and subsequently adjusted downward by the Special Committee after consultation with Centerview and Paramount management to form the Committee Adjusted Skydance Forecasts. The Synergies were prepared by an independent consultant engaged by the Special Committee. None of the Forecasts were prepared with a view toward public disclosure or toward compliance with the guidelines established by the SEC or the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Neither PricewaterhouseCoopers LLP nor Ernst & Young LLP, nor any other independent accountants, have audited, reviewed, examined, compiled or performed any agreed-upon procedures with respect to any of the Forecasts and related prospective financial information contained herein. Accordingly, neither PricewaterhouseCoopers LLP nor Ernst & Young LLP, nor any other independent accountants, have provided any form of assurance with respect thereto for the purposes of this information statement/prospectus. The report of PricewaterhouseCoopers LLP incorporated by reference into this information statement/prospectus relates solely to Paramount’s previously issued financial statements; it does not extend to any of the Forecasts or the prospective financial information contained herein and should not be read to do so. The report of Ernst & Young LLP included in this information statement/prospectus relates solely to Skydance’s previously issued financial statements; it does not extend to any of the Forecasts or the prospective financial information contained herein and should not be read to do so.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures such as those used in the

 

153

Forecasts may not be comparable to similarly titled amounts used by other companies or persons. The non-GAAP financial measures set forth above should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP. None of Paramount, New Paramount and Skydance will be providing a quantitative reconciliation of the applicable forward-looking non-GAAP financial measures. In accordance with Item 10(e)(1)(i)(B) of Regulation S-K, a quantitative reconciliation of a forward-looking non-GAAP financial measure is only required to the extent it is available without unreasonable efforts. None of Paramount, New Paramount or Skydance currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliations, as applicable, or to quantify the probable significance of these items at this time. Paramount, New Paramount and Skydance cannot accurately forecast the adjustments required for any such reconciliation of the forward-looking non-GAAP financial measures, and therefore the reconciliations have been omitted. Financial measures provided to a financial advisor are excluded from the SEC’s definition of non-GAAP financial measures and therefore are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which may otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure in order to be presented. In addition, no reconciliation of non-GAAP financial measures in the Forecasts to GAAP measures was created or used in connection with preparing the Forecasts. Reconciliations of non-GAAP financial measures were not provided to or relied upon by the Special Committee, Skydance or Centerview in connection with the Transactions. The Forecasts were not prepared with a view toward complying with GAAP.

In light of, among other matters, the foregoing factors and the uncertainties inherent in the Forecasts, readers of this information statement/prospectus are cautioned not to place undue reliance on the Forecasts. No representation is made by Paramount, New Paramount, Skydance, any of their respective affiliates, officers, directors, advisors or other representatives (including financial advisors) or any other person to any Paramount stockholder regarding the ultimate performance of Paramount, Skydance or New Paramount compared to the information included in the Forecasts. None of Paramount, New Paramount, Skydance, any of their respective affiliates, officers, directors, advisors or other representatives (including financial advisors) or any other person can provide assurance of the validity, reasonableness, accuracy or completeness of the Forecasts.

The information about the Forecasts set forth above does not give effect to the Transactions and also does not take into account the effect of any failure of the Transactions to be consummated.

EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW, NONE OF PARAMOUNT, NEW PARAMOUNT OR SKYDANCE INTENDS TO, AND EACH DISCLAIMS ANY OBLIGATION TO, UPDATE, CORRECT OR OTHERWISE REVISE THE ABOVE FORECASTS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING SUCH PROJECTIONS ARE NO LONGER APPROPRIATE (EVEN IN THE SHORT-TERM).

Opinion of the Special Committee’s Financial Advisor

On July 7, 2024, Centerview rendered to the Special Committee its oral opinion, which was subsequently confirmed by delivery of a written opinion dated July 7, 2024, that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the merger consideration proposed to be paid to the holders of shares of Paramount common stock (other than any (a) Pre-Closing Paramount Merger Cancelled Shares and (b) shares of Paramount common stock held by the Specified Stockholders, together with any shares of Paramount common stock held by Paramount, any affiliate of Paramount, Skydance or any of their respective subsidiaries (clauses (a) and (b), collectively, “Excluded Shares”)), taken in the aggregate, pursuant to the Transaction Agreement was fair, from a financial point of view, to such holders.

The full text of Centerview’s written opinion, dated July 7, 2024, which describes the assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by

 

154

Centerview in preparing its opinion, is attached to this information statement/prospectus as Annex D and is incorporated herein by reference. Centerview’s financial advisory services and opinion were provided for the information and assistance of the Special Committee (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transactions and Centerview’s opinion addressed only the fairness, from a financial point of view, as of the date thereof, to the holders of shares of Paramount common stock (other than Excluded Shares) of the merger consideration proposed to be paid to such holders, taken in the aggregate, pursuant to the Transaction Agreement. Centerview’s opinion did not address any other term or aspect of the Transaction Agreement or the Transactions and does not constitute a recommendation to any stockholder of Paramount or any other person as to how such stockholder or other person should vote or otherwise act with respect to the Transactions, whether such stockholder should elect to receive the Class A Cash Consideration, the Class A Stock Consideration, the Class B Cash Consideration or the Class B Stock Consideration or make no election, or otherwise act with respect to the Transactions or any other matter.

The full text of Centerview’s written opinion should be read carefully in its entirety for a description of the assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion.

In connection with rendering the opinion described above and performing its related financial analyses, Centerview reviewed, among other things:

 

•

a draft of the Transaction Agreement dated July 7, 2024;

 

•

Annual Reports on Form 10-K of Paramount for the years ended December 31, 2023, December 31, 2022 and December 31, 2021;

 

•

certain interim reports to stockholders and Quarterly Reports on Form 10-Q of Paramount;

 

•

certain publicly available research analyst reports for Paramount;

 

•

certain other communications from Paramount to its stockholders;

 

•

certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of Paramount, including the Paramount May 2024 Forecasts, which is referred to collectively, as the “Paramount internal data”;

 

•

certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of Skydance prepared by the management of Skydance and furnished to Centerview (at the direction of the Special Committee) for purposes of its analysis, which is referred to as the “Skydance internal data”;

 

•

the Unadjusted Skydance Management Forecasts and the Committee Adjusted Skydance Forecasts, which are referred to collectively as the Skydance Forecasts; and

 

•

the Synergies.

Centerview also participated in discussions with members of the senior management and representatives of Paramount and Skydance (including RedBird Capital (as defined herein)) regarding their assessment of Paramount internal data, the Skydance internal data, the Skydance Forecasts and the Synergies, as appropriate, and the strategic rationale for the Transactions. In addition, Centerview reviewed publicly available financial and stock market data, including valuation multiples, for Paramount and Skydance and compared that data with similar data for certain other companies, the securities of which are publicly traded, in lines of business that Centerview deemed relevant and conducted such other financial analyses and took into account such other information as Centerview deemed appropriate.

Centerview assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with

 

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or reviewed by Centerview for purposes of its opinion and, with the Special Committee’s consent, Centerview relied upon such information as being complete and accurate. In that regard, Centerview assumed, at the Special Committee’s direction, that the Paramount internal data (including, without limitation, the Paramount May 2024 Forecasts), the Special Committee’s adjustments to the Unadjusted Skydance Management Forecasts and the Synergies were reasonably prepared on bases reflecting the best then-available estimates and judgments of the management of Paramount and the Special Committee, as applicable, as to the matters covered thereby and that the Skydance internal data were prepared on bases reflecting the best then-available estimates and judgments of the management of Skydance as to the matters covered thereby, and Centerview relied, at the Special Committee’s direction, on the Paramount internal data, the Skydance internal data, the Committee Adjusted Skydance Forecasts and the Synergies for purposes of Centerview’s analyses and its opinion. Centerview did not express a view or opinion as to the Paramount internal data, the Skydance internal data, the Committee Adjusted Skydance Forecasts or the Synergies or the assumptions on which they were based. In addition, at the Special Committee’s direction, Centerview did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of Paramount or Skydance, nor was Centerview furnished with any such evaluation or appraisal, and Centerview was not asked to conduct, and did not conduct, a physical inspection of the properties or assets of Paramount or Skydance. Centerview assumed, at the Special Committee’s direction, that the final executed Transaction Agreement would not differ in any respect material to Centerview’s analysis or opinion from the draft version of the Transaction Agreement reviewed by Centerview. Centerview also assumed, at the Special Committee’s direction, that the Transactions would be consummated on the terms set forth in the Transaction Agreement and in accordance with all applicable laws and other relevant documents or requirements, without delay or the waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to Centerview’s analysis or Centerview’s opinion and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Transactions, no delay, limitation, restriction, condition or other change, including any divestiture requirements or amendments or modifications, will be imposed, the effect of which would be material to Centerview’s analysis or Centerview’s opinion. Centerview also assumed, at the Special Committee’s direction, that all holders of shares of Paramount Class A common stock will elect to receive Class A Cash Consideration and holders of shares of Paramount Class B common stock will elect to receive an amount of Class B Cash Consideration, in the aggregate, equal to or in excess of the Class B Cash Cap. Centerview did not evaluate and did not express any opinion as to the solvency or fair value of Paramount or Skydance, or the ability of Paramount or Skydance to pay their respective obligations when they come due, or as to the impact of the Transactions on such matters, under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Centerview is not a legal, regulatory, tax or accounting advisor, and Centerview expressed no opinion as to any legal, regulatory, tax or accounting matters.

Centerview’s opinion expressed no view as to, and did not address, Paramount’s underlying business decision to proceed with or effect the Transactions, or the relative merits of the Transactions as compared to any alternative business strategies or transactions that might be available to Paramount or in which Paramount might engage. Centerview’s opinion was limited to and addressed only the fairness, from a financial point of view, as of the date of Centerview’s written opinion, to the holders of shares of Paramount common stock (other than Excluded Shares) of the merger consideration to be paid to such holders, taken in the aggregate, pursuant to the Transaction Agreement. For purposes of its opinion, Centerview was not asked to, and Centerview did not, express any view on, and its opinion did not address, any other term or aspect of the Transaction Agreement or the Transactions, including, without limitation, the structure or form of the Transactions, or any other agreements or arrangements contemplated by the Transaction Agreement (including, without limitation, the Voting Agreement, Subscription Agreements, NAI Stock Purchase Agreement and agreements effectuating the Blocker Contribution and Exchange, and all transactions contemplated thereby, including the PIPE Transaction, the NAI Transaction and the Blocker Contribution and Exchange) or entered into in connection with or otherwise contemplated by the Transactions, including, without limitation, the fairness of the Transactions or any other term or aspect of the Transactions to, or any consideration to be received in connection therewith by, or the impact of the Transactions on, the Specified Stockholders, the holders of any other class of securities or the Excluded Shares, creditors or other constituencies of Paramount, Skydance or any other party, the allocation of

 

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the merger consideration as among holders of shares of Paramount common stock who receive the Class A Cash Consideration, the Class A Stock Consideration, the Class B Cash Consideration or the Class B Stock Consideration, the allocation of the merger consideration to be paid pursuant to the Transaction Agreement among the holders of Paramount Class A common stock and Paramount Class B common stock or the relative fairness of the Class A Cash Consideration, the Class A Stock Consideration, the Class B Cash Consideration and the Class B Stock Consideration.

In addition, Centerview expressed no view or opinion as to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of Paramount or any party, or class of such persons in connection with the Transactions, whether relative to the merger consideration to be paid to the holders of shares of Paramount common stock pursuant to the Transaction Agreement or otherwise.

Centerview’s opinion was necessarily based on financial, economic, monetary, currency, market and other conditions and circumstances as in effect on, and the information made available to Centerview as of, July 7, 2024, the date of Centerview’s written opinion, and Centerview does not have any obligation or responsibility to update, revise or reaffirm its opinion based on circumstances, developments or events occurring after the date of Centerview’s written opinion. Centerview’s opinion expressed no view or opinion as to what the value of shares of New Paramount Class A common stock or shares of New Paramount Class B common stock actually will be when issued pursuant to the Transactions or the prices at which shares of Paramount Class A common stock, Paramount Class B common stock, New Paramount Class A common stock or New Paramount Class B common stock would trade or otherwise be transferable at any time, including following the announcement or consummation of the Transactions. Centerview assumed, with the Special Committee’s consent, that the voting rights per share of New Paramount Class B common stock will remain the same immediately following the consummation of the Transactions as the rights per Paramount Class B common stock as at the date of Centerview’s written opinion. Centerview did not express a view or opinion as to the relative values of shares of Paramount Class A common stock or shares of Paramount Class B common stock or the relative fairness of the merger consideration to the holders of Paramount Class A common stock or Paramount Class B common stock. Centerview’s opinion did not constitute a recommendation to any stockholder of Paramount or any other person as to how such stockholder or other person should vote or otherwise act with respect to the Transactions, whether such stockholder should elect to receive the Class A Cash Consideration, the Class A Stock Consideration, the Class B Cash Consideration or the Class B Stock Consideration, or make no election, or otherwise act with respect to the Transactions or any other matter.

Centerview’s financial advisory services and its written opinion were provided for the information and assistance of the Special Committee (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transactions. The issuance of Centerview’s opinion was approved by the Centerview Partners LLC Fairness Opinion Committee.

Summary of Centerview Financial Analysis

The following is a summary of the material financial analyses prepared and reviewed with the Special Committee in connection with Centerview’s opinion, dated July 7, 2024. The summary set forth below does not purport to be a complete description of the financial analyses performed or factors considered by, and underlying the opinion of, Centerview, nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by Centerview. Centerview may have deemed various assumptions more or less probable than other assumptions, so the reference ranges resulting from any particular portion of the analyses summarized below should not be taken to be Centerview’s view of the actual value of Paramount, Skydance or New Paramount. Some of the summaries of the financial analyses set forth below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary, as the tables alone do not constitute a complete description of the financial analyses performed by Centerview.

 

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Considering the data in the tables below without considering all financial analyses or factors or the full narrative description of such analyses or factors, including the methodologies and assumptions underlying such analyses or factors, could create a misleading or incomplete view of the processes underlying Centerview’s financial analyses and its opinion. In performing its analyses, Centerview made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of Paramount, Skydance or any other parties to the Transactions. None of Paramount, Skydance, New Paramount, Centerview or any other person assumes responsibility if future results are materially different from those discussed. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. In addition, analyses relating to the value of Paramount, Skydance or New Paramount do not purport to be appraisals or reflect the prices at which Paramount, Skydance or New Paramount may actually be sold. Accordingly, the assumptions and estimates used in, and the results derived from, the financial analyses are inherently subject to substantial uncertainty. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before July 5, 2024 (the last trading day before the public announcement of the Transactions) and is not necessarily indicative of current market conditions.

For purposes of the financial analyses described below, the term “adjusted OIBDA,” as it applies to Paramount, means operating income before depreciation and amortization, which is referred to as “OIBDA,” further adjusted to exclude programming charges, impairment charges, gains or losses on dispositions, and restructuring charges and other corporate matters, each where applicable.

For purposes of the financial analyses described below, the term “adjusted EBITDA,” as it applies to Skydance, means net income (loss), excluding (i) amortization of capitalized interest, (ii) interest expense, (iii) statutory tax (other than corporate taxes) and (iv) depreciation and amortization.

Paramount Financial Analysis

Selected Public Comparable Companies Analysis

Centerview performed a selected public comparable companies analysis of Paramount, in which Centerview reviewed and analyzed certain financial and stock market information, ratios and multiples of Paramount and compared it to corresponding financial and stock market information, ratios and multiples, including EV/2025E EBITDA (as described below), for the below listed publicly traded companies that Centerview, based on its experience and professional judgment, deemed relevant to consider in relation to Paramount (collectively, the “Paramount selected companies”):

 

Paramount selected companies		EV/2025E EBITDA
Comcast Corporation			6.1x
Fox Corporation			5.4x
The Walt Disney Company			11.0x
Warner Bros. Discovery Inc.			5.9x

Although none of the Paramount selected companies are directly comparable to Paramount, the companies listed above were chosen by Centerview, among other reasons, because they are publicly traded companies that have certain operational, business and/or financial characteristics that, for purposes of Centerview’s analyses, may be considered similar to those of Paramount. Because none of the Paramount selected companies are exactly the same as Paramount, Centerview believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the selected public comparable companies analysis. Accordingly, Centerview also made qualitative judgments, based on its experience and professional judgment, concerning differences between the business, financial and operating characteristics and prospects of Paramount and the Paramount selected

 

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companies that could affect the public trading values of each in order to provide a context in which to consider the results of the quantitative analysis.

Using publicly available information obtained from SEC filings and other data sources as of July 5, 2024, Centerview calculated, for each Paramount selected company, among other things, such company’s aggregate enterprise value (calculated as the market value of common equity (determined using the treasury stock method and taking into account outstanding in-the-money options, warrants and restricted stock units, as applicable) plus the total value of debt, plus minority interests, less cash and cash equivalents and less the value of long-term investments, in each case calculated consistently with the determinations made in arriving at Paramount’s aggregate enterprise value for purposes of Centerview’s analyses to the extent comparable information was publicly available) (“EV”) as a multiple of the Wall Street research analyst consensus estimated EBITDA for the twelve months ended December 31, 2025 (“EV/2025E EBITDA”). Centerview then computed the median EV/2025E EBITDA multiple for the twelve months ended December 31, 2025 for the Paramount selected companies of approximately 6.0x.

Based on the foregoing analysis, Centerview determined, through a range of qualitative and quantitative factors including, but not limited to, company maturity, historical and expected growth and margin characteristics, end market trends and dynamics related to the business models of each Paramount selected company versus Paramount, an appropriate range of the estimated adjusted OIBDA multiples for the twelve months ended December 31, 2025 for Paramount of 6.00x to 6.75x and applied such multiples to the estimated adjusted OIBDA of Paramount for the twelve months ended December 31, 2025, based on the Paramount May 2024 Forecasts, to arrive at a range of implied enterprise values for Paramount. Centerview then subtracted from this range the total value of Paramount’s net debt (including adjustments for noncontrolling interests and long-term investments, as well as estimated net proceeds from the announced sale of Paramount’s equity interest in Viacom18, each as provided by Paramount management in the Paramount internal data) as of March 31, 2024, as set forth in the Paramount internal data, to derive implied equity value reference ranges for Paramount of $9.0 billion to $11.7 billion.

Discounted Cash Flow Analysis

Centerview performed a discounted cash flow analysis of Paramount based on the Paramount May 2024 Forecasts. A discounted cash flow analysis is a traditional valuation methodology used to derive a valuation of an asset or set of assets by calculating the “present value” of estimated future cash flows of the asset or set of assets. “Present value” refers to the current value of future cash flows or amounts and is obtained by discounting those future cash flows or amounts by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors.

In performing this analysis, Centerview calculated a range of equity values for Paramount by (a) discounting to present value as of March 31, 2024 using discount rates ranging from 8.5% to 10.5% (based on Centerview’s analysis of Paramount’s weighted average cost of capital using the capital asset pricing model and based on considerations that Centerview deemed relevant in its professional judgment and experience and taking into account certain metrics including yields for U.S. treasury notes, levered and unlevered betas for comparable group companies, market risk and size premia) and using a mid-year convention: (i) the forecasted risk-adjusted, after-tax unlevered free cash flows of Paramount over the period beginning on April 1, 2024 and ending on December 31, 2028, utilized by Centerview based on the Paramount May 2024 Forecasts and (ii) a range of implied terminal values of Paramount at the end of the Paramount May 2024 Forecasts period, calculated by Centerview applying an illustrative range of enterprise value to last twelve months adjusted OIBDA multiples of 6.25x to 7.00x, which Centerview selected utilizing its professional judgment and expertise, to Paramount’s adjusted OIBDA for the terminal year, normalized to reflect average annual revenue and adjusted OIBDA contribution from the Super Bowl during the Paramount May 2024 Forecasts period, and then (b) subtracting from the foregoing results the total value of Paramount’s net debt (including adjustments for noncontrolling interests and long-term investments, as well as estimated net proceeds from the announced sale of Paramount’s equity interest in Viacom18, each as provided by

 

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Paramount management in the Paramount internal data) as of March 31, 2024, as set forth in the Paramount internal data, to derive a range of implied equity values for Paramount of $7.9 billion to $11.5 billion.

Skydance Financial Analysis

Selected Public Comparable Companies Analysis

Centerview performed a selected comparable public companies analysis of Skydance, in which Centerview reviewed and analyzed certain financial and stock market information, ratios and multiples of Skydance and compared it to corresponding financial and stock market information, ratios and multiples, including EV/2025E EBITDA (as described above), for the below listed publicly traded companies that Centerview, based on its experience and professional judgment, deemed relevant to consider in relation to Skydance (collectively, the “Skydance selected companies”):

 

Skydance selected companies (Content / IP)		EV/2025E EBITDA
Formula One Group			19.1x
TKO Group Holdings Inc.			17.0x
Skydance selected companies (Gaming)		EV/2025E EBITDA
Electronic Arts Inc			16.5x
Take-Two Interactive Software, Inc.			25.7x
Skydance selected companies (Div. Media with Film Studio)		EV/2025E EBITDA
Paramount Global1			6.9x
The Walt Disney Company			11.0x
Warner Bros. Discovery, Inc.			5.9x

Although none of the Skydance selected companies is directly comparable to Skydance, the companies listed above were chosen by Centerview, among other reasons, because they are publicly traded companies that have certain operational, business and/or financial characteristics that, for purposes of Centerview’s analyses, may be considered similar to those of Skydance. Because none of the Skydance selected companies is exactly the same as Skydance, Centerview believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the selected public comparable companies analysis. Accordingly, Centerview also made qualitative judgments, based on its experience and professional judgment, concerning differences between the business, financial and operating characteristics and prospects of Skydance and the Skydance selected companies that could affect the public trading values of each in order to provide a context in which to consider the results of the quantitative analysis.

Using publicly available information obtained from SEC filings and other data sources as of July 5, 2024, Centerview calculated, for each Skydance selected comparable company, among other things, such company’s EV/2025E EBITDA multiples. From this analysis, Centerview computed median EV/2025E EBITDA multiples for the twelve months ended December 31, 2025 of 18.1x for the Skydance selected companies focused on content/intellectual property, 21.1x for the Skydance selected companies in the gaming industry, and 6.9x for the Skydance selected companies that were diversified media companies with film studios.

Based on the foregoing analysis, Centerview determined, through a range of qualitative and quantitative factors including, but not limited to, company maturity, historical and expected growth and margin characteristics, end market trends and dynamics related to the business models of each Skydance selected company versus Skydance, an appropriate range of estimated adjusted EBITDA multiples for Skydance of 11.5x

 

1	Reflects unaffected share price as of July 2, 2024.

 

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to 16.0x and applied such multiples to the estimated adjusted EBITDA for the twelve months ended December 31, 2025, based on the Committee Adjusted Skydance Forecasts, to arrive at a range of implied enterprise values for Skydance. Centerview adjusted the total enterprise values for Skydance’s net debt and minority interests of $20 million as of March 31, 2024 (each as set forth in the Skydance internal data) and derived an approximate implied equity value reference range for Skydance of $3.1 billion to $4.4 billion. Centerview then included the value of the $6 billion cash investment by the PIPE Equity Investors, which resulted in an approximate implied equity value reference range for Skydance of $9.1 billion to $10.4 billion.

Discounted Cash Flow Analysis

Centerview performed a discounted cash flow analysis of Skydance based on the Committee Adjusted Skydance Forecasts. A discounted cash flow analysis is a traditional valuation methodology used to derive a valuation of an asset or set of assets by calculating the “present value” of estimated future cash flows of the asset or set of assets. “Present value” refers to the current value of future cash flows or amounts and is obtained by discounting those future cash flows or amounts by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors.

In performing this analysis, Centerview calculated a range of equity values for Skydance by (a) discounting to present value as of March 31, 2024 using discount rates ranging from 9.0% to 11.0% (based on Centerview’s analysis of Skydance’s weighted average cost of capital using the capital asset pricing model and based on considerations that Centerview deemed relevant in its professional judgment and experience and taking into account certain metrics including yields for U.S. treasury notes, levered and unlevered betas for comparable group companies, market risk and size premia) and using a mid-year convention: (i) the forecasted risk-adjusted, after-tax unlevered free cash flows of Skydance over the period beginning on April 1, 2024 and ending on December 31, 2028, utilized by Centerview based on the Committee Adjusted Skydance Forecasts, (ii) a range of implied terminal values of Skydance at the end of the Committee Adjusted Skydance Forecasts period, calculated by Centerview applying an illustrative range of enterprise value to adjusted EBITDA multiples of 12.0x to 16.5x, which Centerview selected utilizing its professional judgment and expertise, to Skydance’s adjusted EBITDA for the terminal year, and then (b) subtracting from the foregoing results the value of Skydance’s net debt and minority interests as of March 31, 2024 (each as set forth in the Skydance internal data), to derive a range of implied equity values for Skydance of $3.6 billion to $5.3 billion. Centerview then included the value of the $6 billion PIPE Transaction, which resulted in an approximate implied equity value reference range for Skydance of $9.6 billion to $11.3 billion.

 

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Relative Value Analysis

Based upon a comparison of the range of implied equity values for each of Paramount and Skydance calculated pursuant to the selected public comparable companies analyses and discounted cash flow analyses described above, Centerview calculated ranges of implied merger consideration for the Transactions to holders of shares of Paramount common stock (other than the Specified Stockholders) assuming that (i) all holders of shares of Paramount Class A common stock (other than the Specified Stockholders) will make a cash election, (ii) holders of shares of Paramount Class B common stock (other than the Specified Stockholders) will elect to receive an amount of cash consideration, in the aggregate, equal to or in excess of the Class B Cash Cap and (iii) the PIPE Equity Investors will contribute the entire $6 billion in connection with the PIPE Transaction. With respect to any given range of implied merger consideration, the higher consideration assumes the highest implied equity value of Paramount and the lowest implied equity value of Skydance, and the lower consideration assumes the lowest implied equity value of Paramount and the highest implied equity value of Skydance. Centerview’s analysis indicated the following implied ranges of merger consideration to holders of shares of Paramount common stock (other than the Specified Stockholders):

 

Valuation Metric		Implied Aggregate Consideration to non-Specified Stockholders
Selected Public Company Analyses		$4.5 billion cash + 228.4 million – 442.0 million shares of New Paramount common stock
Discounted Cash Flow Analyses		$4.5 billion cash + 146.6 million – 406.4 million shares of New Paramount common stock

Centerview compared the implied ranges of merger consideration to the merger consideration set forth in the Transaction Agreement of $4.5 billion cash and 308.1 million shares of New Paramount common stock.

“Has”/“Gets” Analysis

Centerview reviewed and analyzed certain financial information, multiples and ratios in order to compare an implied equity value of Paramount held by holders of shares of Paramount common stock (other than the Specified Stockholders) of $8.3 billion, representing the midpoint of Paramount’s discounted cash flow analysis equity value range calculated as described above to an implied aggregate value of merger consideration payable to holders of shares of Paramount common stock (other than the Specified Stockholders) of $9 billion, calculated by Centerview by (a) adding (i) an implied $9.6 billion equity value of Paramount, representing the midpoint of Paramount’s discounted cash flow analysis equity value range, (ii) an implied $4.4 billion equity value of Skydance, representing the midpoint of Skydance’s discounted cash flow analysis equity value range, (iii) the value implied by estimated run-rate cost synergies of $200 million, as set forth in the Synergies, using a discounted cash flow analysis assuming a 0% perpetuity growth rate and a discount rate of 9.5% (which is the midpoint of the 8.5% to 10.5% range analyzed for Paramount), less the projected cost to achieve such synergies, based on the Synergies analysis, and (iv) $1.5 billion of cash contributed by the PIPE Equity Investors, less estimated transaction costs; (b) multiplying such amount by the 27.2% estimated pro forma ownership of New Paramount to be held by the holders of shares of Paramount common stock (other than Specified Stockholders); and (c) adding the $4.5 billion in cash that is payable to holders of shares of Paramount common stock (other than Specified Stockholders), in the aggregate.

Other Factors

Centerview noted for the Special Committee certain additional factors solely for informational purposes, including, among other things, the following:

 

•

Historical Stock Price Trading Analysis. Centerview reviewed the stock price performance of Paramount Class A common stock and Paramount Class B common stock for the 52-week period prior

 

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to July 5, 2024. Centerview noted that the weighted average range of low and high closing prices of Paramount Class A common stock and Paramount Class B common stock during the prior 52-week period was $10.05 and $17.10, representing an implied equity value range for Paramount of $7.0 billion to $11.9 billion.

 

•

Analyst Price Target Analysis. Centerview reviewed the stock price targets for shares of Paramount common stock reflected in 27 publicly available Wall Street research analyst reports as of July 5, 2024. Centerview noted that the analyst stock price targets in such research analyst reports ranged from $8.00 to $20.00 per share of Paramount common stock representing an implied equity value range for Paramount of $5.6 billion to $14.0 billion.

General

The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. In arriving at its opinion, Centerview did not draw, in isolation, conclusions from or with regard to any factor or analysis that it considered. Rather, Centerview made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of the analyses.

Centerview’s financial analyses and opinion were only one of many factors taken into consideration by the Special Committee in its evaluation of the Transactions. Consequently, the analyses described above should not be viewed as determinative of the views of the Special Committee, the Paramount Board or management of Paramount with respect to the merger consideration or as to whether the Special Committee would have been willing to determine that a different merger consideration was fair. The merger consideration for the Transactions was determined through arm’s-length negotiations between Paramount (acting at the direction of the Special Committee) and Skydance. Centerview provided advice to the Special Committee during these negotiations. Centerview did not, however, recommend any specific amount of aggregate consideration to Paramount, the Special Committee or the Paramount Board or that any specific amount of consideration constituted the only appropriate consideration for the Transactions.

Centerview is a securities firm engaged directly and through affiliates and related persons in a number of investment banking, financial advisory and merchant banking activities. In the two years prior to the date of its written opinion, except for Centerview’s current engagement by the Special Committee, Centerview had not been engaged to provide financial advisory or other services to Paramount. In the two years prior to the date of its written opinion, Centerview had not been engaged to provide financial advisory or other services to NAI, Skydance or RedBird Capital Partners LLC (“RedBird Capital”), and Centerview did not receive any compensation from NAI, Skydance or RedBird Capital during such period. As of the date of its written opinion, Centerview’s Paris affiliate, Centerview Partners France SCS (“Centerview Partners France”), was providing financial advisory services unrelated to Paramount to Kohlberg Kravis Roberts & Co. L.P. or one of its affiliates (“KKR”), an investor of Skydance, in connection with a strategic matter. As of the date of Centerview’s written opinion, Centerview Partners France was not entitled to and had not received any compensation from KKR for this matter and the matter is not currently active. In 2022 and 2023, Centerview Partners France was engaged to provide financial advisory services unrelated to Paramount to Mediawan, S.A, in which affiliates of KKR indirectly hold a majority equity interest, in connection with certain strategic matters and Centerview Partners France received between $5 million and $10 million in compensation for such services. In 2022, Centerview Partners France was engaged to provide financial advisory services unrelated to Paramount to KKR in connection with a strategic matter but did not receive compensation for such services. Centerview may provide financial advisory and other services to or with respect to Paramount, NAI, Skydance, RedBird Capital or their respective affiliates, including portfolio companies of RedBird Capital, in the future, for which Centerview may receive compensation. Certain (i) of Centerview’s and its affiliates’ directors, officers, members and employees, or family members of such persons, (ii) of Centerview’s affiliates or related investment funds and (iii) investment

 

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