David Ellison’s Skydance Media and its financial backers are exploring a deal to take private all of Paramount Global, people familiar with the matter told CNBC.

Skydance, the film and TV studio run by Ellison, has exchanged preliminary information with Paramount, said the people, who asked not to be named because the deal talks are private. Full due diligence hasn’t started, the people said.

Skydance has been working with private equity firms RedBird Capital Partners and KKR & Co. on a deal to buy National Amusements, the holding company owned by Shari Redstone. It controls 77% of Paramount’s voting stock.

But that deal is contingent on merging Skydance with Paramount, and the likely structure for a merger would be a complete take private of the larger media company, said the people.

Redstone is considering selling as the media landscape shifts away from traditional TV toward streaming. While Paramount Global has run a profitable business for decades, it is smaller than Netflix, Google’s YouTube, Apple, Amazon, and other larger streamers that have bigger balance sheets to afford sports and entertainment content.

No acquisition is assured, and talks could fall apart.

It is unclear if Redstone would demand a different premium for selling National Amusements than the remaining shareholders of Paramount Global would obtain.

Skydance would need additional capital to acquire Paramount, which has a market capitalization of $8.2 billion and about $15 billion of debt. Some of that funding could come from Skydance’s private equity partners and Larry Ellison, the billionaire co-founder of Oracle and David Ellison’s father. Skydance hasn’t reached out for outside financing yet, as it hasn’t decided if it wants to move forward with a deal, said the people.

Skydance isn’t interested in a deal where it would only acquire National Amusements but not all of Paramount, said the people. While such a deal would give Skydance control of Paramount, it wouldn’t solve Paramount’s problems as a publicly traded company, which include running the growing but money-losing Paramount+ streaming service, and operating declining linear cable assets such as MTV, VH1, Comedy Central and Nickelodeon.

Spokespeople for RedBird, Skydance, Paramount Global and National Amusements declined to comment.

Warner Bros. Discovery has also had preliminary discussions about acquiring Paramount Global, according to people familiar with the matter. If Redstone sells to Skydance, one motivating factor would be her fear that Warner Bros. Discovery would prefer to merge with Comcast‘s NBCUniversal, one of the people said.

Puck first reported Skydance’s interest in acquiring National Amusements. The Wall Street Journal reported last week that Skydance was interested in a two-part deal that would include merging Skydance and National Amusements. Bloomberg first reported on the initial exchange of company information.

Disclosure: Comcast NBCUniversal is the parent company of CNBC.

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