A possible sale of Paramount Global has now intensified, with Shari Redstone, president of National Amusements Inc. (NAI) -- which has a controlling interest in Paramount -- in talks with potential investors Skydance Media/RedBird Capital, according to reports.
NAI representatives had no comment to Television News Daily on Sunday. Initial reports of Redstone’s talks first appeared in Puck News and The New York Times.
Last week, news broke that Skydance Media/RedBird Capital expressed interest in buying the company, according to reports.
Skydance Media/RedBird Capital are said to be interested in the company’s core movie and TV studio production assets as well as its vast library of movie and TV content.
Skydance is a major movie studio housed on the Paramount lot. It produces major successful, wide-release films such as editions of the “Mission: Impossible” franchise, “Top Gun: Maverick” as well as TV series’ “Reacher” (Prime Video), “Foundation” (Apple TV+), “Grace and Frankie (Netflix) and “Tom Clancy’s Jack Ryan” (Prime Video).
RedBird Capital is a private investment firm, which has made entertainment/sports acquisitions including the XFL, AC Milan, an major Italian-based European football team, and Alpha Entertainment.
Bernstein Research believes any potential buyers of Paramount will be those who are seeking:
1) Broad strategic media deals -- media companies that can maximize “synergies”
2) Strategic companies focused only on Paramount’s fast growing, high-profile streaming business.
3) Financial deal-making for those who will buy the entire company and then sell off all business assets
Laurent Yoon, media analyst for Bernstein, says Skydance/RedBird sits between broad strategic deal-making and financial deal-making.
Legacy TV and movie based-media companies have seen their stock prices sink dramatically over the last few years due to rapidly declining linear TV businesses. Those businesses have been hit with sharply falling advertising and viewership because of high levels of pay TV cord-cutting.
Yoon says Paramount’s advertising from its TV business has seen year over year decline continually over the past seven quarters. Advertising revenue for the company declined nearly 15% to just over $1.6 billion in the most recent third-quarter period.
More troubling is that Paramount has had the highest net debt-to-cash flow ratio among all media companies -- six times its earnings before interest, taxes and depreciation.
In addition, its streaming businesses Paramount+ and Pluto TV have the smallest streaming viewing shares -- 4% and 3%, respectively -- among the top ten services as of the third quarter of 2023.