Paramount Skydance deal ends. What happens next

National Amusements stopped merger discussions between Paramount Global and Skydance this week — throwing into question what’s next for the legacy media giant during a tumultuous period for the industry.

Paramount, like many of its peers, is grappling with how to make streaming a profitable business as it faces peak competition, a rapidly shrinking universe of cable-TV customers and a slowdown in the advertising market that has especially weighed on the bundle.

Now it’s up to the three leaders at the helm of Paramount to figure out the company’s best path forward.

Bob Bakish stepped down from the top post in April and was replaced by the so-called Office of the CEO: CBS CEO George Cheeks, Paramount Media Networks CEO Chris McCarthy and Paramount Pictures CEO Brian Robbins. The executives are trying to steer Paramount out of a rocky period while working under a structure that few companies have tried.

“It’s very difficult for a trio of CEOs to work on a long term basis. It’s almost unheard of. How will they make decisions on allocating capital and strategic priorities?” said Jessica Reif-Ehrlich, an analyst at BofA Securities.

On Wednesday, the leaders sent a memo to Paramount employees saying they would focus on their plan to turn the company around after the proposed deal didn’t move forward.

“So, what does this mean for Paramount? While the Board will always remain open to exploring strategic alternatives that create value for shareholders, we continue to focus on executing the strategic plan we unveiled last week during the Annual Shareholder Meeting, which we are confident will set the stage for growth for Paramount,” the trio said in the memo that CNBC obtained Wednesday.

After months of negotiations in a sale process that included various twists, National Amusements informed Paramount’s special committee and the buying consortium that included Skydance and private equity firms RedBird Capital and KKR minutes before a vote that it was stopping the sale process.

The move came a little more than a week after Skydance and Paramount had agreed to financial terms of a merger that would have been valued at $8 billion.

The deal had been awaiting signoff from Redstone, who owns National Amusements, the controlling shareholder of 77% of class A Paramount shares.

In a statement Tuesday, National Amusements said that while it had “agreed to the economic terms that Skydance offered, there were other outstanding terms on which they could not come to agreement.” National Amusements also voiced its support for Paramount’s current leadership.

While those near the deal have offered conflicting reasons for why it was called off, a person familiar with the matter said Redstone turned down the offer after Skydance lowered the amount of money she would receive with the altered bid in order to shift some of it to the class B shareholders.

In the last iteration of the deal, Redstone…