As the media landscape continues to evolve, one of the biggest questions on everyone's minds is whether Paramount Global, a major media company, will be sold. Speculation has been fueled by indications that Shari Redstone, a controlling shareholder through her family-owned company National Amusements Inc., is open to the possibility of selling the company. National Amusements holds approximately 77% of Paramount Global's 'Class A' voting stock. Facing financial challenges, Paramount Global's assets include various linear television properties such as the CBS television network, 28 broadcast stations, and several cable networks including Showtime, MTV, Nickelodeon, BET, Paramount Network, and Comedy Central. However, these properties have been losing value due to cord-cutting, audience fragmentation, and a sluggish advertiser marketplace.
Paramount Global also owns the streaming provider Paramount+, which reported 63 million subscribers in its third quarter 2023 earnings report. Although the subscriber count is growing, it still lags behind competitors like Netflix, Disney+, and Amazon Prime Video. Paramount+ and its partner, Pluto TV, reported a loss of $238 million in the same quarter, down from $343 million the previous year. Investors and industry insiders eagerly await Paramount's fourth-quarter earnings report, scheduled for release on February 28.
Several potential buyers have emerged for Paramount Global, including media companies like Skydance Media, Warner Bros. Discovery, and Allen Media Group. Skydance Media, in partnership with RedBird Capital and Apollo Global Management, has been exploring the acquisition of controlling shares in Paramount Global. Speculation suggests that Skydance Media's CEO, David Ellison, is particularly interested in Paramount Pictures and a potential merger with his own company. Skydance Media has previously collaborated with Paramount Pictures on successful films like 'Top Gun: Maverick' and the 'Mission Impossible' franchise.
Warner Bros. Discovery, led by its CEO David Zaslav, has also been in talks with Paramount Global regarding a potential merger. Zaslav, who successfully spearheaded mergers with Scripps in 2018 and WarnerMedia in 2022, sees potential value in combining the streaming services of Warner Bros. Discovery's Max and Paramount+. Both media companies also have prestigious news outlets, CNN and CBS News, along with Warner Bros. and Paramount Pictures studios, extensive content libraries, and multiple cable TV networks. While discussions have taken place, it remains to be seen whether the merger will materialize given the significant debt load of Warner Bros. Discovery and potential regulatory challenges.
Meanwhile, Byron Allen, the founder of Allen Media Group, has made an unsolicited bid of $30 billion to acquire Paramount Global. Allen is reportedly more interested in Paramount's streaming properties, CBS, and cable channels, and is more likely to sell the film studio. He has met with Paramount's CEO, Bob Bakish, but details of their conversation have not been disclosed. Allen already owns cable properties such as the Weather Channel and Comedy.TV and has previously expressed interest in acquiring Tegna, a local broadcast TV station owner.
However, any potential acquisition or merger agreement could face obstacles, such as Paramount's carriage agreement with Charter, the largest U.S. pay-TV operator. The current agreement is set to expire in April. Past disputes between Disney and Charter resulted in a temporary blackout of Disney's linear TV channels until a settlement was reached. Bakish has emphasized the importance of bundling linear cable channels with streaming, known as a 'hard bundle,' in order to avoid similar blackouts.
With speculation surrounding a possible acquisition, Paramount Global recently announced layoffs affecting 800 employees, around 3% of its workforce. CEO Bob Bakish stated that these adjustments would enable the company to build on its momentum and execute its strategic vision for the year ahead.
Interestingly, while Paramount Global's future hangs in the balance, its sister company CBS has experienced success in terms of ratings. Live special events such as the NFL's AFC championship, the Grammy Awards, and Super Bowl LVIII drew impressive viewership numbers, showcasing the network's continued relevance and popularity.
As the media industry undergoes significant transformations, the fate of Paramount Global remains uncertain. The potential sale of the company and the potential buyers involved have sparked much discussion and speculation. Only time will tell what lies ahead for Paramount Global and how its future will shape the ever-evolving media landscape.
