Ellison has also had discussions with Paramount about merging his film and TV studio, Skydance Media, into the larger media company, after he takes control. Both sides have hired advisers and are exchanging financial information, said the people, who asked to not be identified discussing private conversations. 

National Amusements owns movie theaters and controls 77% of Paramount’s voting stock. Paramount Chair Shari Redstone and her advisers have discussed terms of a National Amusements acquisition with Ellison. He plans to finance a deal with help from Skydance’s investors, namely his father, Larry, the co-founder of software giant Oracle Corp. and one of the world’s richest men, as well as the private equity firms RedBird Capital Partners and KKR & Co.

Another option being considered is that Ellison, with his partners, takes all of Paramount Global private, CNBC reported on Wednesday. That would significantly increase the cost of the deal, since Paramount already has about $15 billion in net debt. A spokesperson for Ellison declined to comment.

The 41-year-old media mogul is trying to seize on a rare opportunity to buy one of Hollywood’s great studios. He has met with Redstone and tried to convince her that he will be a guardian of the company’s many assets, in particular its namesake studio, a 110-year-old business that produced The Godfather among other classic films. Ellison has worked with Paramount Pictures for years as a financier and producer of projects including the Star Trek film series, the Mission: Impossible movie franchise and the blockbuster Top Gun: Maverick.

It’s no sure thing that a deal will happen. Ellison and his advisers may find something they don’t like as they review Paramount’s finances. 

The Paramount side may also have concerns. Paramount’s share price has tumbled as its cable networks hemorrhage viewers and its streaming business loses money. Its stock market value is now about $9 billion. Skydance was last valued $4 billion, so if the two merged, Paramount investors may be asked to give up a sizable piece of the company.

Any deal will be complicated and could be subject to litigation due to an unusual structure. Ellison is attempting to gain control of the media company by buying out its controlling shareholder. Money manager Mario Gabelli, a large Paramount shareholder, has expressed concerns that the Redstones may sell at terms not offered to other investors.

CBS Corp. shareholders sued Redstone when she merged the broadcaster with Viacom Inc., and many people involved in these negotiations fear a similar suit since Redstone and her family own a much smaller economic stake in the company than their voting power suggests.

Redstone must consider Ellison’s terms and determine if she is truly ready to surrender control of her family’s media empire. She was until recently reluctant to sell the business her father built up through a series of bold acquisitions. But a decision to slash the company’s dividend last year promoted her to take in an outside investor and renegotiate National Amusements’ debt.

The Oct. 7 attacks by Hamas against Israel also inspired her to work even more to fight antisemitism.

Were Ellison to take control, he would inherit a venerable studio and a lot of headaches. He and his advisers have discussed selling the company’s suite of cable networks, but they but they have assured Redstone they will not break the company up into several pieces and their primary motive is to give it the resources it needs to compete with its larger peers in media. The fate of the Paramount+ streaming service is uncertain.