Sony Pictures Entertainment CEO Tony Vinciquerra is in talks with Apollo Global Management about making a joint bid to acquire Paramount, Deadline is reporting. The news comes as Skydance/Redbird Capital is also in exclusive talks with Paramount Global’s majority shareholder, National Amusements, to take control of the studio.

Sony and Apollo’s offer is reportedly an all-cash one for outstanding stock in Paramount. If the deal goes through, the merged studios will be made private through a joint venture, The New York Times is also reporting. Paramount’s low stock rate increased 12% in after-hours trading yesterday as investors processed the scenario.

Sony has not publicly revealed how it would be involved in the merger if its joint bid with Apollo goes through, or if its participation will merely be in management expertise. Apollo will reportedly be doing most of the work if the deal goes through.

Recently there has been more enthusiasm for the Sony and Apollo bid than the one that has been presented by David Ellison, the founder and CEO of the independent Skydance Media. At one point, Apollo’s bid was reported as a $26 billion take-private offer to buy Paramount Global, whose enterprise value at the end of 2023 was approximately $22.5 billion.

While some investors have expressed their preference towards Sony and Apollo’s bid, a special committee of Paramount’s board decided to continue with its advanced deal talks with Skydance. The committee would rather work with the independent studio than pursue a deal that might not actually come to fruition.

If Sony and Apollo’s bid goes through, however, it would cause a major shift in the dynamics of the traditional film and television sectors. A merger of two major Hollywood studios would potentially be able to combine operations, leaving the companies to have a stronghold in production and distribution.

That fact is amplified by Vinciquerra being able to bring a significant background in television to his current role as Sony’s CEO, as he previously held executive posts at both Fox and CBS. Besides being a veteran media executive with extensive experience in film and television, he would likely run the studio and take advantage of Sony’s marketing and distribution.

There is hesitance among some executives in Hollywood about private equity becoming involved in a conglomerate and breaking it up. However, Sony-Apollo partnership in securing Paramount is a different scenario. Paramount+ is already secure in the streaming market, so Sony and Apollo would avoid the multi-billion-dollar start-up costs of an OTT service.

Sony currently has a streaming pay-one window with Netflix. But the studio can more easily move its content to Paramount+ than launching its own streaming platform.

If the Sony and Apollo bid goes through, it would hold a majority stake in the joint venture and operate the media company. Sony would also take control over Paramount’s library of movies, including Star Trek, Mission:Impossible and Indiana Jones, as well as its television characters, including SpongeBob SquarePants.

Apollo would likely assume control of the CBS broadcast network and its local television stations. The U.S. places restrictions on foreign ownership of broadcast stations, and Sony’s parent corporation is headquartered in Tokyo.

Despite the benefits that Sony and Apollo can secure in acquiring Paramount, their potential bid is still in early development and in the process of being structured. The two companies have yet to approach the latter studio. As of now, Skydance’s bid remains as the top contender.