Buyout bid for Paramount

MartyDe

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Oct 28, 2019
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Looks like Sony, Apollo want to make a move on Paramount.
 
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Looks like Sony, Apollo want to make a move on Paramount.

I don't think this would be the better deal for Hollywood, necessarily, as (per the NYT's report) Sony would likely just make Paramount a subsidiary label within Sony (much like Columbia Pictures). That would mean one fewer studio for the creative community to pitch their ideas to.

But I do think that a Sony/Apollo all-cash buyout of Paramount would almost certainly be better for current Paramount stockholders than the Skydance deal under current negotiation. That deal would see existing stockholders' shares diluted and I question to what extent Skydance can (or even wants to) shift from Paramount's current course, which has seen its stock price decline a whopping 70% over the past three years.

Shari Redstone only owns about 10% of Paramount equity but around 70% of its voting shares, so she's the one who will ultimately decide which deal to take. But there's a brewing shareholder revolt against the Skydance deal, especially if she agrees to it without seriously considering Apollo's offer. I think she wants to go with Skydance for sentimental reasons -- she has a comfortable working relationship those guys (as Skydance has co-produced several films, including the Mission: Impossible flicks, with Paramount) and she (probably correctly) believes that they are more likely to hold most of her father's legacy intact, as opposed to the Apollo deal, which would like see the Paramount film & TV studio digested into Sony's own, with most or all of the TV channels, including CBS, sold off to others, while the money-losing Paramount+ app probably gets shut down.
 
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I don't think this would be the better deal for Hollywood, necessarily, as (per the NYT's report) Sony would likely just make Paramount a subsidiary label within Sony (much like Columbia Pictures). That would mean one fewer studio for the creative community to pitch their ideas to.

But I do think that a Sony/Apollo all-cash buyout of Paramount would almost certainly be better for current Paramount stockholders than the Skydance deal under current negotiation. That deal would see existing stockholders' shares diluted and I question to what extent Skydance can (or even wants to) shift from Paramount's current course, which has seen its stock price decline a whopping 70% over the past three years.

Shari Redstone only owns about 10% of Paramount equity but around 70% of its voting shares, so she's the one who will ultimately decide which deal to take. But there's a brewing shareholder revolt against the Skydance deal, especially if she agrees to it without seriously considering Apollo's offer. I think she wants to go with Skydance for sentimental reasons -- she has a comfortable working relationship those guys (as Skydance has co-produced several films, including the Mission: Impossible flicks, with Paramount) and she (probably correctly) believes that they are more likely to hold most of her father's legacy intact, as opposed to the Apollo deal, which would like see the Paramount film & TV studio digested into Sony's own, with most or all of the TV channels, including CBS, sold off to others, while the money-losing Paramount+ app probably gets shut down.
Sony has been trying to figure out how to get in on having their own streaming service, but they did not want to deal with years of losses and hope it turns profitable, plus the fact that there are too many services.

Since Paramount+ will soon be profitable ( in about a year), now might be a good time, plus the fact they will pick up some new franchises and a big catalog if there is a deal.
 
Sony has been trying to figure out how to get in on having their own streaming service, but they did not want to deal with years of losses and hope it turns profitable, plus the fact that there are too many services.

Since Paramount+ will soon be profitable ( in about a year), now might be a good time, plus the fact they will pick up some new franchises and a big catalog if there is a deal.
Paramount+ will not be profitable in about a year. They *claim* that it will be profitable domestically next year, but not internationally/overall. I suspect at least part of the reason for that is they are now counting revenue from some or all of the approximately 20 million Showtime pay TV subscribers (which only exist in the US) as "Paramount+" revenue (in the same way that Warner counts HBO pay TV subs as "Max" streaming revenue). Paramount has not provided any public guidance, to my knowledge, of when the overall service, on a global basis, will stop losing money and begin turning a profit.

Sony has done well sitting out the streaming wars, being a content arms dealer to Netflix and others. Not sure I see that changing if they end up folding Paramount into Sony, especially if they were to sell off CBS, Showtime, and other linear nets, which also seems likely. (Once you lose current shows and live sports from CBS and Showtime, Paramount+ isn't much more than Pluto TV but with a subscription cost.) The money raised from those linear sell-offs might pay back Apollo for their part of the Paramount purchase, leaving Sony as full owner of the Paramount film and TV studio, which would simply be integrated into Sony's existing operations.
 
Let’s get our shovels and dig up Walter Cronkite. I wonder if he has broken the coffin by spinning in it so much.
 
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Let’s get our shovels and dig up Walter Cronkite. I wonder if he has broken the coffin by spinning in it so much.
LOL. Well, I suspect the ultimate fate of Walter Cronkite's CBS News will be to join forces with the pioneer of 24/7 cable news, Ted Turner's CNN, which he might actually like.

Warner Bros. Discovery is about the only publicly traded US company that I can see who is both interested in buying CBS and would likely be allowed to do so by the feds. Disney, Comcast and Fox are all out since they already own broadcast nets and local stations. I don't really see any of the tech giants -- Apple, Amazon, Google, Microsoft -- wanting to buy a broadcast net -- feels too 20th century for those guys.

And should Sony end up acquiring Paramount, I'm not sure they'd even be allowed to keep CBS since FCC rules bar foreign companies from owning more than a 20% stake in a TV network or station (although if they really wanted to, perhaps CBS could be put in a private joint venture where Apollo owns 80% and Sony owns the other 20%).
 
she (probably correctly) believes that they are more likely to hold most of her father's legacy intact, as opposed to the Apollo deal
I feel like this might be an incorrect assumption actually. Skydance feels more likely to strip this thing down to parts. I think they are paying a premium under the assumption that they'll be able to spin off the assets that they don't want (similar to Disney and Fox). I'm also not even sure the Paramount name would live on.

While the Sony deal will result in some absorption within the existing empire, I think the Paramount name and studio definitely lives on here next to Columbia, like you said. That's probably a better preservation of the legacy thank Skydance.
And should Sony end up acquiring Paramount, I'm not sure they'd even be allowed to keep CBS since FCC rules bar foreign companies from owning more than a 20% stake in a TV network or station (although if they really wanted to, perhaps CBS could be put in a private joint venture where Apollo owns 80% and Sony owns the other 20%).

As for CBS, I think you're onto something with this. Perhaps that is why Apollo is involved at all? If Sony just wants the studio, I can't see why they wouldn't just offer the $11B with no intermediary.
 
I feel like this might be an incorrect assumption actually. Skydance feels more likely to strip this thing down to parts. I think they are paying a premium under the assumption that they'll be able to spin off the assets that they don't want (similar to Disney and Fox). I'm also not even sure the Paramount name would live on.

While the Sony deal will result in some absorption within the existing empire, I think the Paramount name and studio definitely lives on here next to Columbia, like you said. That's probably a better preservation of the legacy thank Skydance.


As for CBS, I think you're onto something with this. Perhaps that is why Apollo is involved at all? If Sony just wants the studio, I can't see why they wouldn't just offer the $11B with no intermediary.

Eh, my original assumption was that any of these buyers were likely to strip Paramount down to its parts, sell off the declining assets (e.g. linear TV networks), and shut down the money-losing Paramount+ to bow out of the subscription streaming wars and be a profitable mid-sized studio/content arms dealer.

But that's not the vibe I'm getting from what I'm reading about Skydance lately. Obviously, I have no inside info and it's certainly possible that Skydance is just trying to create the *impression* that they'll keep Paramount largely intact because that's what Shari wants to hear. (Deals like this -- involving a founder or other singularly important owner/chief like Shari -- aren't only about money; emotion plays a role too.) Maybe they will strip and sell. But they want to bring in a former head of NBC to help run things, and they're talking about using Ellison's dad's company Oracle to power their data, which kinda sounds like they want to remain in streaming? (Although maybe that would apply to just Pluto TV, which I assume any new owner of the studio would want to retain, since it's a growth area and a great way to monetize all those old shows and movies the studio owns.)

As for the Apollo/Sony proposal, well, it was initially just Apollo alone making the all-cash bid. Paramount was reportedly somewhat skeptical of their ability to finance the deal, which I imagine is why Apollo has been talking to Sony about teaming up to make an offer (which, as far as I know, they still haven't actually done). So it's Apollo trying to bring Sony to the table, not the other way around. And there are all sorts of reasons why Sony might not want to do such a deal on their own. They're going to need some financial institution(s) to help with the financing; I'm sure they don't have $11 billion in cash just lying around. So that's what Apollo would do. Who knows what sort of terms Apollo is proposing to Sony; maybe Apollo would front most of the cash, then they'd immediately turn around and sell off the non-studio assets while gaining a certain amount of Sony stock?
 
Paramount+ will not be profitable in about a year. They *claim* that it will be profitable domestically next year, but not internationally/overall. I suspect at least part of the reason for that is they are now counting revenue from some or all of the approximately 20 million Showtime pay TV subscribers (which only exist in the US) as "Paramount+" revenue (in the same way that Warner counts HBO pay TV subs as "Max" streaming revenue). Paramount has not provided any public guidance, to my knowledge, of when the overall service, on a global basis, will stop losing money and begin turning a profit.

Sony has done well sitting out the streaming wars, being a content arms dealer to Netflix and others. Not sure I see that changing if they end up folding Paramount into Sony, especially if they were to sell off CBS, Showtime, and other linear nets, which also seems likely. (Once you lose current shows and live sports from CBS and Showtime, Paramount+ isn't much more than Pluto TV but with a subscription cost.) The money raised from those linear sell-offs might pay back Apollo for their part of the Paramount purchase, leaving Sony as full owner of the Paramount film and TV studio, which would simply be integrated into Sony's existing operations.
Sony was one of the first to have a streaming service, shut it down years ago.
 
Eh, my original assumption was that any of these buyers were likely to strip Paramount down to its parts, sell off the declining assets (e.g. linear TV networks), and shut down the money-losing Paramount+ to bow out of the subscription streaming wars and be a profitable mid-sized studio/content arms dealer.

But that's not the vibe I'm getting from what I'm reading about Skydance lately. Obviously, I have no inside info and it's certainly possible that Skydance is just trying to create the *impression* that they'll keep Paramount largely intact because that's what Shari wants to hear. (Deals like this -- involving a founder or other singularly important owner/chief like Shari -- aren't only about money; emotion plays a role too.) Maybe they will strip and sell. But they want to bring in a former head of NBC to help run things, and they're talking about using Ellison's dad's company Oracle to power their data, which kinda sounds like they want to remain in streaming?
I have a inside source, getting rid of Paramount+ is not what is being talked about.

But some Cable Channels……..I will say a strong possibility of a few for sale before their value drops too much more, BET, VH1 are the ones most talked about, maybe MTV, Comedy Central, CMT also, not Nickelodeon.

Also talking about shared production costs, where shows would air on Paramount+ first, then on the other channels later, like CBS, cable channels.

Which means all production costs is shared between streaming/channels, which helps make/keeps everything profitable, but results in less new content being produced.

This does not affect shows from outside studios, like Young Sheldon ( Warner), but they are going to look less at those ( or hope/demand they are less expensive) and look more at shows produced in house.

By the way, this is being talked about elsewhere with companies that own both Streaming and Channels ( Broadcast/cable), they have no choice as advertising is still way down and losing per sub fees, 5 million last year, already almost 1 million with just 3 providers reported in the first quarter.
 
Sony was one of the first to have a streaming service, shut it down years ago.
You mean PlayStation Vue? Yeah, that was a virtual cable TV service, similar to YouTube TV. Folks who tried it tended to love it. Lots of folks thought it's biggest problem was its branding, which gave the impression that it had something to do with video games or that you needed a PlayStation console to access it, neither of which was the case.

Sony also owned what was maybe the original FAST: Crackle. I'm pretty sure it existed before Pluto and Tubi. I guess Crackle was ahead of its time. Sony eventually sold it to Chicken Soup for the Soul, which went on to also buy Redbox.

Just looked at their wikipedia article and found this most recent entry:

On April 23, 2024, Chicken Soup for the Soul announced a $636.6 million loss in 2023, and warned that without any options to generate additional financing, the company may be forced to liquidate or pause operations, and seek a potential Chapter 11 bankruptcy protection filing.

LOL, looks like Crackle may not be around much longer.

Anyhow, yeah, Sony did make some early forays into the brave new world of streaming but nothing worked out for them. Which makes me skeptical that they would be interested in taking ownership of Paramount+, sinking lots of money into it and trying to turn it into a winner. Nah.
 
Sony was one of the first to have a streaming service, shut it down years ago.
Playstation Vue was a live tv service, not the same thing as Paramount+.

It never had that many subscribers, when YTTV started up at $35, the few hundred thousand subs Vue had quickly abandoned the service to go to YTTV, myself included.

Now today, YTTV has more then 8 Million subs, will overtake Dish and Sling this Quarter, by the end of 2024, will surpass all of DirecTV (satellite, Stream, by internet, uverse) and become the #3 Provider.

The world is changing.
 
Playstation Vue was a live tv service, not the same thing as Paramount+.

It never had that many subscribers, when YTTV started up at $35, the few hundred thousand subs Vue had quickly abandoned the service to go to YTTV, myself included.

Now today, YTTV has more then 8 Million subs, will overtake Dish and Sling this Quarter, by the end of 2024, will surpass all of DirecTV (satellite, Stream, by internet, uverse) and become the #3 Provider.

The world is changing.
No my point was when it was said, Sony kept out of the streaming business, I was pointing out they were one of the first!
And for what ever reason, they walked away.
 
You mean PlayStation Vue? Yeah, that was a virtual cable TV service, similar to YouTube TV. Folks who tried it tended to love it. Lots of folks thought it's biggest problem was its branding, which gave the impression that it had something to do with video games or that you needed a PlayStation console to access it, neither of which was the case.
To this day, I still think it was the best overall Live TV streaming service, and as you said, I said as well, the naming was a misstep.

Sony Vue would have been less confusing to the average joe. Tying it to the playstation name made many (most) non gamers ignore it completely.
 
.

It never had that many subscribers, when YTTV started up at $35, the few hundred thousand subs Vue had quickly abandoned the service to go to YTTV, myself included.
I did as well. For price, sure, but also the writing was already on the wall that Sony was gonna pull the plug, so it was find the next best thing.

Pleased with YTTV when I have it, but I still preferred Vue.
 
To this day, I still think it was the best overall Live TV streaming service
It became better, but before it had a real guide ( remember clicking on the tiles ) it was not that easy for some to use.
 
It became better, but before it had a real guide ( remember clicking on the tiles ) it was not that easy for some to use.
Yeah, the original guide layout was my only real gripe, but even that wasnt a big deal to me personally. Otherwise, it worked and worked well.

Perhaps I am remembering it through rose colored glasses looking back, as I know YTTV has added features that have surpassed the others in many ways.
 
I have a inside source, getting rid of Paramount+ is not what is being talked about.

But some Cable Channels……..I will say a strong possibility of a few for sale before their value drops too much more, BET, VH1 are the ones most talked about, maybe MTV, Comedy Central, CMT also, not Nickelodeon.

Also talking about shared production costs, where shows would air on Paramount+ first, then on the other channels later, like CBS, cable channels.

Which means all production costs is shared between streaming/channels, which helps make/keeps everything profitable, but results in less new content being produced.

This does not affect shows from outside studios, like Young Sheldon ( Warner), but they are going to look less at those ( or hope/demand they are less expensive) and look more at shows produced in house.

By the way, this is being talked about elsewhere with companies that own both Streaming and Channels ( Broadcast/cable), they have no choice as advertising is still way down and losing per sub fees, 5 million last year, already almost 1 million with just 3 providers reported in the first quarter.
Yeah, this pretty much jibes with what I'm reading too. I always figured that whoever buys Paramount would keep Nickelodeon, which has a valuable content library (kids love to rewatch shows and it's perpetually "new" content to every kid just turning 3 years-old) as well as IP that can fuel future films and series featuring Dora, Spongebob, Paw Patrol, Peppa Pig, etc.

BET Networks (which includes VH1) always looked like the most likely to be sold, given that it was already being shopped around by current management last year. Byron Allen, Tyler Perry or some other black media mogul would buy it (along, perhaps, with Bounce, which Scripps is looking to sell).

I could see WBD buying Comedy Central and MTV. Animated content from either net's library either could cross over to Adult Swim. MTV these days is essentially TLC for teens and twenty-somethings, so WBD is perfectly positioned to produce future content for that brand.

They might be able to sell CMT back to its originator Gaylord, or someone else here in Nashville who could return it to its roots. I could see Disney or Comcast buying Smithsonian Network and its library to smarten up Hulu or Peacock a bit.

There would likely be no buyers, though, for Paramount Network, TV Land, Pop or Logo. Whoever owns the studio may as well hold onto them as they're all now essentially just slots to rerun catalog content from the general entertainment library. I assume all of those will eventually be available for free on Pluto TV (although maybe not Paramount Network if it becomes the linear home to Paramount+ Originals, in line with the plan you mention).
 
Yeah, the original guide layout was my only real gripe, but even that wasnt a big deal to me personally. Otherwise, it worked and worked well.
Not a big deal for myself either, as I have explained before, took her a couple of weeks to get used to it.
Perhaps I am remembering it through rose colored glasses looking back, as I know
here-
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YTTV has added features that have surpassed the others in many ways.
YTTV is now the gold standard for Streaming Paid Live TV, lot better then most Traditional Providers also.