Paramount Global has reportedly begun talks with Sony Pictures and private equity firm Apollo after the exclusive 30-day negotiating window with David Ellison’s Skydance Media expired on Friday.
Sony and Apollo are said to have put a $26bn cash offer on the table for the consideration of Shari Redstone, whose family owns Paramount Global controlling shareholder National Amusements, and a special committee.
Redstone has the power to veto any deal and was said to favour Skydance, whose CEO Ellison has long been a co-financing partner for Paramount on hits like the Mission: Impossible franchise and Top Gun: Maverick and has the backing of RedBird Capital.
According to reports Paramount Global may still be negotiating with Skydance albeit on a non-exclusive basis. Shareholders soured on pursuing the Ellison path as they believe a deal would inordinately benefit Redstone at their expense.
Skydance recently offered a sweetener in the form of a $3bn cash infusion that would give shareholders a larger stake than originally planned.
Meanwhile the Sony/Apollo bid, according to The New York Times, would see the film studio become controlling shareholder.
Were this to happen, observers have said it would most likely result in Paramount becoming a label within the Sony fold. The Hollywood creative community would not be keen on that outcome as it would effectively remove Paramount as an autonomous studio and reduce the number of studio buyers to whom creatives could shop film and television projects.
That would continue a recent trend started in 2019 when Disney acquired the entertainment assets of 21st Century Fox, reducing the number of autonomous studios to its current level of five.
A deal with Sony/Apollo may also invite regulatory scrutiny. Japan-based Sony Corp is prohibited from owning US broadcast assets – Paramount Global owns CBS.
Should neither bid succeed, Paramount Global would chart its own course, unless other bidders entered the fray. Redstone has been keen to find a buyer for Paramount Global amid declining a cable TV business (it also owns Showtime) and a streaming platform in Paramount+ that has been slow to take off.
Last week Paramount Global CEO Bob Bakish was fired and a new office of the CEO was hurriedly unveiled in the form of divisional heads George Cheeks Chris McCarthy and Brian Robbins, who runs Paramount Pictures.
Less than 30 minutes after the triumvirate was announced, they took part in a comically brief Q1 earnings call that ran to barely 12 minutes in which they declared they were formulating a corporate strategy and declined to take analysts’ questions.
At time of writing Paramount Global had no comment.
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