Paramount Global, a struggling media company, is currently in acquisition negotiations with Sony and Apollo Global Management after talks with Skydance Media fell through. The company has been facing major losses and uncertainty following the departure of CEO Bob Bakish last week. Sony and Apollo reportedly made a $26 billion all-cash offer to acquire Paramount, while they were also in discussions with Skydance Media about a potential merger. The company’s special committee has voted to engage in talks with both Sony and Apollo as well as continue negotiations with Skydance.
Skydance Media had previously reached a tentative agreement to acquire Shari Redstone’s controlling stake in Paramount, but talks between the two parties failed to reach a final agreement before negotiations lapsed. This failure to reach a deal prompted Paramount to explore other options, leading to the current discussions with Sony and Apollo. However, it is uncertain if any deal will come to fruition due to regulatory hurdles and potential legal challenges from shareholders who have contested Redstone’s ownership stake in the company.
Bob Bakish, who reportedly opposed the Skydance deal, stepped down as Paramount’s CEO amidst rumors of his impending ousting. The offer from Sony and Apollo would involve the assumption of Paramount’s debt, with Sony taking majority control of operations and Apollo holding a minority stake. Paramount has faced challenges in recent months, accumulating over $14.6 billion in debt and failing to finalize previous merger and acquisition deals. The company’s streaming losses in the first quarter amounted to $286 million, further adding to its financial struggles.
In earlier reports, Paramount was considering a joint venture with NBCUniversal owner Comcast to combine their streaming services, but the deal did not materialize. Apollo made an $11 billion offer solely for Paramount Pictures, which was also unsuccessful. Warner Bros. Discovery had also proposed a merger bid, but discussions fell through in February. Paramount divested its publishing arm, Simon & Schuster, to private equity firm KKR in a $1.6 billion deal last August. The ongoing negotiations with potential buyers indicate Paramount’s efforts to address its financial challenges and position itself for future success.
The key players in the acquisition negotiations include David Ellison of Skydance Media, Shari Redstone of Paramount Global, and the executives of Sony and Apollo Global Management. Ellison, the son of Google co-founder Larry Ellison, and Redstone, the daughter of media mogul Sumner Redstone, have significant influence in the media industry. The executives at Sony and Apollo, with their substantial net worths, represent powerful entities in the business world. The outcome of the negotiations will have implications for the future direction and stability of Paramount Global and the broader media landscape. The company’s decision to explore multiple acquisition options reflects its determination to navigate through its financial challenges and secure a strategic partnership for growth and sustainability.