Paramount+ on the chopping block

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Guess it’s time to get yer Tyler Sheridan and Star Trek on while you can… long ass Bloomberg article below

 

 

Features

■ February 16, 2024, 6:00 AM EST

How Paramount Became a Cautionary Tale of the Streaming Wars

Shari Redstone inherited her father’s storied media empire and tried to take on Netflix. Now it’s looking for a buyer.

By Lucas Shaw

Sumner Redstone was a buyer, not a seller. Starting in the mid-1980s, he built his family’s movie theater chain into one of the world’s most valuable media companies, Viacom, through high-profile acquisitions. He outmaneuvered peers to acquire a legendary broadcast network (CBS), an iconic studio (Paramount Pictures) and popular cable channels (Nickelodeon and MTV).

Redstone relished his Hollywood lifestyle. He attended premieres, cycled through young girlfriends and hosted stars at his Los Angeles mansion. He couldn’t imagine surrendering any part of his company. In 2016, when then-Chief Executive Officer Philippe Dauman tried to sell a minority stake of Paramount studio—the company was struggling, and he was trying to raise money—the 93-year-old Redstone ousted Dauman, his longtime lawyer and protégé, from the company. “Viacom is at the center of my life,” Redstone, a lawyer himself, wrote in his memoir, A Passion to Win. “It is my world.”

Redstone died in 2020. Unfortunately for his heirs, the foundation on which he built his world—movies and cable TV—is crumbling. The number of people who pay for live-TV service has dropped about 30 million from its peak of more than 100 million starting in 2010; meanwhile, domestic moviegoing has plummeted to all-time lows. Redstone’s TV networks have been hit especially hard because their primary audience, viewers under the age of 34, have all but abandoned cable for Netflix, TikTok and YouTube. The company, now known as Paramount Global, has tried to offset the damage by cutting costs. But the lack of investment has only accelerated the loss of viewers and advertisers. Paramount’s TV ad sales are projected to have fallen $1 billion last year.

Sumner’s daughter, Shari, who took over for her father as chairman, thought that streaming would save the company. She’s spent billions of dollars on original series for its flagship service, Paramount+, producing spinoffs of hit shows such as Yellowstone and expanding the Star Trek universe. Yet all that spending hasn’t attracted a large audience. Paramount+ accounted for less than 1% of TV viewing in November, behind not only Netflix and Hulu but also Peacock, the Roku Channel and Tubi. Paramount’s streaming business is projected to have lost about $1.5 billion in 2023, dragging down earnings for the entire company. (Paramount has said that its losses likely peaked last year.)

Paramount isn’t the only traditional media player that doesn’t exactly have a success story to tell these days. The collapse of cable TV and the rise of streaming have wreaked havoc on the entertainment business, prompting widespread layoffs, two labor strikes and consolidation. “The whole industry is guilty of mistakes,” says Rich Greenfield, an analyst with LightShed Partners, a tech, media and telecommunications research company. Even Walt Disney Co., the mightiest of the entertainment giants, has had to fire thousands of employees and slash billions of dollars from its programming budget.

Although “you can’t singularly penalize” Paramount in such a tumultuous media moment, Greenfield says, the company has a smaller margin for error than most of its peers. Disney has lucrative theme parks, and Warner Bros. Discovery Inc. owns the largest TV studio, but Paramount made all its profit last year from traditional TV networks, according to projections—which is why Wall Street has all but given up hope. The company’s market capitalization has plunged below $9 billion, less than a third of what it was five years ago. With more than $16 billion in debt and little cash coming in, Paramount has had to slash the dividend it pays to National Amusements Inc., the Redstones’ holding company. Paramount’s decline has also forced Shari Redstone to contemplate what her father would never: a sale of the family business.

For the past several months, Redstone has been conducting an informal auction, according to more than a dozen interviews with people involved in the process, such as current and former employees, financial advisers and bidders. She’s held discussions about selling control of Paramount to suitors including budding media mogul David Ellison, private equity firm Apollo Global Management Inc. and Warner Bros. Discovery, home to HBO and CNN. Former stand-up comedian Byron Allen has made two separate bids for Paramount, the first of which the company rejected. There’s still a pretty good chance no deal will happen; high interest rates and a federal government that’s wary of mergers both stand in the way, as does Paramount’s sinking share price.

If Redstone can’t find a solution, the company will be in danger of becoming an industry stalwart whose downfall exposes the deterioration of an entire sector. Paramount’s decline jeopardizes the future of its namesake studio, an almost 112-year-old institution that released The Godfather, Grease and Titanic. It also imperils CBS News, the home of Edward R. Murrow, Walter Cronkite and 60 Minutes. MTV, Nickelodeon and Comedy Central, which raised generations of kids, are already afterthoughts to anyone born this century.

The company’s troubles are also a warning sign for Hollywood, which looked to avoid the fate of newspapers, magazines and music—industries ravaged by the internet. But as media companies struggle to transition from cable to streaming, they’re surrendering the next generation of TV viewers to short-form video apps and services that tech giants in Silicon Valley and China own. So far, Hollywood has relied on restructuring and layoffs rather than innovation and growth, leading to questions about whether we’re in the last great age of TV.

Sumner Redstone split CBS from Viacom in 2006. He thought it would benefit the latter: Cable was booming—investors liked niche networks—and broadcast was seen as slow-growing and a drag on the stock. Shari opposed the move, one of several disagreements that prompted her to strike out on her own. After starting a venture capital company, among other projects, she returned to the family fold when she worried that two younger paramours were taking advantage of her father; she eventually ejected them from the family home. Redstone then spent years battling Dauman and then-CBS CEO Leslie Moonves (who didn’t want her meddling in his business) for control of her family’s two big media companies.

When Shari reunited CBS and Viacom in 2019, most media executives said it was too little too late. Netflix Inc. and Amazon.com Inc. were already spending billions of dollars annually on original programming and had built streaming services with global audiences. (Dauman had spent more than $15 billion buying back Viacom stock rather than investing in the company’s future.) Facing this onslaught from Silicon Valley, some moguls decided to cash in rather than compete. Rupert Murdoch sold most of Fox’s entertainment assets to Disney. Jeff Bewkes sold Time Warner Inc. to AT&T Inc. But Redstone, a lawyer who was as pugnacious as her father was, was in no mood to surrender.

“There was a window during which she could have pursued a merger or sale,” says one former executive, who declined to be identified because of confidentiality clauses in their exit agreement. Netflix inquired about buying Paramount Pictures in 2019 and again in more recent years. “Shari was hesitant,” the executive adds. “She had inherited this legacy.”

Instead, Redstone decided to go all-in on streaming. On their own, neither CBS nor Viacom had the scale to compete with Netflix. Viacom had no paid streaming service and had licensed two of its most popular titles, Yellowstone and South Park, to rival services. CBS had All Access and Showtime, two niche services. But the combined company owned more than 140,000 TV episodes and 3,600 movies; it was the home of NCIS, SpongeBob SquarePants and Star Trek and had rights to the NFL. Surely, Redstone thought, that would be enough.

Crafting the streaming strategy fell to Bob Bakish, a former management consultant who joined Viacom in the late 1990s. Bakish had overseen the company’s international operations and was relatively unknown in US media. But with the executive ranks of both her companies hollowed out, Redstone thought Bakish—strategic, practical and, most important, loyal—was the right fit for CEO.

Bakish had the mandate to build a streaming service, but he didn’t have the balance sheet to pay for it. The merger created a company with $19 billion in debt. To raise money, Bakish sold real estate, including the famed CBS headquarters in New York, and tried to sell book publisher Simon & Schuster. (The government blocked the sale to a competitor but later approved a deal at a lower price to private equity firm Kohlberg Kravis Roberts & Co.) He also cut costs at the company’s cable networks, gutting executive teams and programming budgets.

In 2021, Redstone and Bakish unveiled Paramount+, their answer to Netflix. The service included original movies from Paramount, a reboot of MTV’s The Real World and spinoffs of Yellowstone. Bakish advertised Paramount+ as a “mountain of entertainment,” a play on the snowy peak in the Paramount logo. The service arrived months after similar offerings from Disney, Apple Inc. and Comcast Corp., companies that dwarfed Paramount in sales and profit.

Paramount+ defied skeptics by growing more quickly than anyone anticipated. Despite its late start, the service amassed more than 50 million customers—and was adding more people in the US than any competitor. (This is still true.) Paramount’s other streaming service, Pluto TV, was growing even more quickly. Bakish had acquired the free, ad-supported business, which has hundreds of niche live channels, for only $340 million in 2019, and it was now worth billions. “The strategy we have is indisputably working,” he told Bloomberg News in September 2022. That year, Paramount released the highest-grossing movie in company history, Top Gun: Maverick, at the same time it had the most-watched drama on cable, Yellowstone.

But the company’s investment in Paramount+ couldn’t have had worse timing. It had started adding millions of customers just as rising inflation and a war in Ukraine changed how Wall Street evaluated companies. Fast growth and losses were out; profit was in. Making matters worse, Netflix’s growth stalled at the start of 2022, causing investors to worry that streaming had peaked. Whereas Netflix had spent years building toward profitability, most other companies were trying to replicate its success within an accelerated time frame. Streaming growth across the industry slowed right when companies were experiencing their worst losses.

As Paramount’s stock languished, David Nevins saw an opportunity. The former head of Showtime thought he should’ve been put in charge of programming strategy for Paramount+, given his role in creating hit shows such as Billions, Dexter and Weeds. But Bakish didn’t think Nevins’ tastes were broad enough. The company’s biggest hits were shows such as Blue Bloods and Yellowstone, not Showtime dramas. Bakish instead split oversight among multiple executives, including Nevins, who left at the end of 2022. Now on the outside, he put together financing to try to buy Showtime.

Teaming up with private equity firm General Atlantic, he offered more than $3 billion for his old network. Given Paramount’s need for cash, this seemed a no-brainer to Nevins and his financial advisers. Paramount rebuffed the offer, claiming Showtime was worth at least $5 billion. Some board members thought Paramount should take the money, but Bakish convinced them he could make more by milking Showtime for cash and folding it into Paramount+. He also had another deal in the works. He wanted to sell BET.

A touchstone of the Black community, Black Entertainment Television LLC had its own studio and a streaming service partly owned by filmmaker Tyler Perry. But it was missing out on ad dollars because it was owned by a White family, according to several people who spoke to Bloomberg Businessweek; industry experts told Bakish that advertisers would spend more money on BET if it could say it’s a Black-owned business. So he got a who’s who of Black media figures to bid, including Perry, Sean “Diddy” Combs and Allen. Bids topped $2 billion, but Paramount refused to sell for less than $3 billion. After rejecting the offer for Showtime and failing to sell BET, many Paramount employees and even some board members questioned Bakish’s handling of the sales. “We got an unsolicited offer for Showtime [from Nevins]. We looked at it. And the reality is it wasn’t that interesting to us,” Bakish said last year. (He hasn’t addressed the BET negotiations.) Paramount has been holding talks of late to sell BET to Scott Mills, its current CEO, along with outside investors.

Redstone’s doubts ran deeper. Paramount’s woes had forced the company to slash the dividend it pays to shareholders, thereby creating financial problems for her family. National Amusements relied on the cash infusions from Paramount to sustain its chain of struggling movie theaters and to pay off its debt. Last May, National Amusements raised $125 million by selling a stake to an investment firm founded by computer billionaire Michael Dell and investment banker Byron Trott. “What they’ve done to the balance sheet by competing with Netflix has created real financial problems,” LightShed’s Greenfield says. The value of the Redstone family’s stake in its media companies has dwindled from more than $5 billion in 2015 to about $1 billion today. Trott is now advising Redstone on a potential sale of National Amusements.

Redstone’s desire to extricate herself from her shrinking media empire increased after Oct. 7, the day Hamas killed about 1,200 Israelis and foreigners and kidnapped hundreds more, precipitating an Israeli invasion of Gaza. “Ever since Oct. 7, my life has been turned upside down,” she said at an event hosted by entertainment industry publication TheWrap in December. She expressed fear for her safety, the survival of Israel and the future of the Jewish people, adding that she’s using her platform to educate people about these issues. “Now it’s all I think about 24 hours a day, and it’s what motivates me from the minute I wake up to the second I go to bed.”

After years of avoiding overtures to buy the company, Redstone has finally been willing to listen. David Ellison, the CEO of Skydance Media, has been drawn to Paramount Pictures since he arrived in Hollywood as a twentysomething with dreams of making movies. Few titles affected him as much as Paramount’s Top Gun. He watched the film on VHS tapes, laser discs and DVDs; it motivated him to become a pilot, and his love of aviation inspired the name of his company. Skydance has been in business with Paramount for 15 years, co-financing and producing many of its biggest movies. Ellison worked with Paramount on the Oscar-nominated True Grit and Brad Pitt’s World War Z, and his studio is now a major stakeholder in many of Paramount’s most valuable franchises, including Mission: Impossible and Star Trek. He also produced Top Gun: Maverick.

Ellison has been expanding his business into animation with former Pixar Animation Studios boss John Lasseter and sports through docuseries deals with the NFL. Skydance raised $400 million in 2022 from investors including private equity firms RedBird Capital Partners and KKR. Recently the 41-year-old recruited his dad, tech billionaire Larry Ellison, and these investors to make a preliminary offer for National Amusements. It would give him control of Paramount, letting him merge it with Skydance—and vaulting him into the upper echelon of media moguls.

Even though Redstone has spent time with Ellison and his father, she’s been less welcoming toward Byron Allen, who’s assembled an unlikely media business combining the Weather Channel with local TV stations. Allen has tried and failed to buy several big-ticket items in recent years, including the Denver Broncos, the ABC broadcast network and BET. Investors have often questioned whether Allen had financing to seal these deals. He’s said Paramount turned him down because the company thought it could get more money. Paramount has declined to comment on Allen’s—or anyone’s—bids.

Those close to Redstone tell Businessweek there are other bidders at the table, though they declined to name them. Private equity firms have looked at Paramount but not bid on their own. High interest rates make it expensive to finance the takeover of a multibillion-dollar media company. Fellow media companies such as Warner Bros. Discovery and Comcast have also looked. Warner Bros. Discovery CEO David Zaslav has spoken with Redstone and Bakish and hired financial advisers to work on a potential bid. But the current regulatory climate would likely result in years of litigation and headaches for Zaslav. He would have to be sure this was the right deal to position his company for the future.

Executives close to the negotiations say there’s about a 50% chance a deal happens. Because Redstone is attempting to sell control of Paramount through her family holding company (among other scenarios), any deal is also more complicated because she’ll expect her controlling shares to be valued higher than those of common shareholders. Warren Buffett, Paramount’s largest shareholder, has said nothing about the talks. Investor Mario Gabelli, another major shareholder, has expressed concerns about a deal.

Many buyers say they can wait a year or two for the value of the company to drop further. Redstone’s cable networks are only going to decline more and will face financial pressure from pay-TV operators such as Charter Communications Inc., which has forced other media companies to drop certain channels from their cable packages that don’t perform well with subscribers. Her streaming service is still years away from meaningful profits—there’s a reason Paramount promoted it so aggressively during the Super Bowl—and has a limited footprint outside the US. “It is hard to see how a buyer creates value unless Paramount stock first falls toward the mid-single digits,” Greenfield wrote in a note on Jan. 25. Shares are currently trading at about $13.

Some analysts, including Greenfield, have called for Paramount to shut down its streaming service and become a pure studio, selling its top shows to other streamers. This move would require Paramount to fire thousands of employees, a fate Redstone would rather avoid. She wants to find a new owner who will preserve her father’s legacy, investing in the business rather than breaking it up for parts. But Sumner was a buyer at the beginning of the cable boom, and his daughter is a seller at its end. And if she can’t make a deal, her alternatives are bleak. This week Paramount said it would cut about 800 jobs—at least the fourth time in the past 18 months that the company has downsized. —With Christopher Palmeri and Thomas Buckley


 

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Guess it’s time to get yer Tyler Sheridan and Star Trek on while you can… long ass Bloomberg article below

 

 

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Features

■ February 16, 2024, 6:00 AM EST

How Paramount Became a Cautionary Tale of the Streaming Wars

Shari Redstone inherited her father’s storied media empire and tried to take on Netflix. Now it’s looking for a buyer.

By Lucas Shaw

Sumner Redstone was a buyer, not a seller. Starting in the mid-1980s, he built his family’s movie theater chain into one of the world’s most valuable media companies, Viacom, through high-profile acquisitions. He outmaneuvered peers to acquire a legendary broadcast network (CBS), an iconic studio (Paramount Pictures) and popular cable channels (Nickelodeon and MTV).

Redstone relished his Hollywood lifestyle. He attended premieres, cycled through young girlfriends and hosted stars at his Los Angeles mansion. He couldn’t imagine surrendering any part of his company. In 2016, when then-Chief Executive Officer Philippe Dauman tried to sell a minority stake of Paramount studio—the company was struggling, and he was trying to raise money—the 93-year-old Redstone ousted Dauman, his longtime lawyer and protégé, from the company. “Viacom is at the center of my life,” Redstone, a lawyer himself, wrote in his memoir, A Passion to Win. “It is my world.”

Redstone died in 2020. Unfortunately for his heirs, the foundation on which he built his world—movies and cable TV—is crumbling. The number of people who pay for live-TV service has dropped about 30 million from its peak of more than 100 million starting in 2010; meanwhile, domestic moviegoing has plummeted to all-time lows. Redstone’s TV networks have been hit especially hard because their primary audience, viewers under the age of 34, have all but abandoned cable for Netflix, TikTok and YouTube. The company, now known as Paramount Global, has tried to offset the damage by cutting costs. But the lack of investment has only accelerated the loss of viewers and advertisers. Paramount’s TV ad sales are projected to have fallen $1 billion last year.

Sumner’s daughter, Shari, who took over for her father as chairman, thought that streaming would save the company. She’s spent billions of dollars on original series for its flagship service, Paramount+, producing spinoffs of hit shows such as Yellowstone and expanding the Star Trek universe. Yet all that spending hasn’t attracted a large audience. Paramount+ accounted for less than 1% of TV viewing in November, behind not only Netflix and Hulu but also Peacock, the Roku Channel and Tubi. Paramount’s streaming business is projected to have lost about $1.5 billion in 2023, dragging down earnings for the entire company. (Paramount has said that its losses likely peaked last year.)

Paramount isn’t the only traditional media player that doesn’t exactly have a success story to tell these days. The collapse of cable TV and the rise of streaming have wreaked havoc on the entertainment business, prompting widespread layoffs, two labor strikes and consolidation. “The whole industry is guilty of mistakes,” says Rich Greenfield, an analyst with LightShed Partners, a tech, media and telecommunications research company. Even Walt Disney Co., the mightiest of the entertainment giants, has had to fire thousands of employees and slash billions of dollars from its programming budget.

Although “you can’t singularly penalize” Paramount in such a tumultuous media moment, Greenfield says, the company has a smaller margin for error than most of its peers. Disney has lucrative theme parks, and Warner Bros. Discovery Inc. owns the largest TV studio, but Paramount made all its profit last year from traditional TV networks, according to projections—which is why Wall Street has all but given up hope. The company’s market capitalization has plunged below $9 billion, less than a third of what it was five years ago. With more than $16 billion in debt and little cash coming in, Paramount has had to slash the dividend it pays to National Amusements Inc., the Redstones’ holding company. Paramount’s decline has also forced Shari Redstone to contemplate what her father would never: a sale of the family business.

For the past several months, Redstone has been conducting an informal auction, according to more than a dozen interviews with people involved in the process, such as current and former employees, financial advisers and bidders. She’s held discussions about selling control of Paramount to suitors including budding media mogul David Ellison, private equity firm Apollo Global Management Inc. and Warner Bros. Discovery, home to HBO and CNN. Former stand-up comedian Byron Allen has made two separate bids for Paramount, the first of which the company rejected. There’s still a pretty good chance no deal will happen; high interest rates and a federal government that’s wary of mergers both stand in the way, as does Paramount’s sinking share price.

If Redstone can’t find a solution, the company will be in danger of becoming an industry stalwart whose downfall exposes the deterioration of an entire sector. Paramount’s decline jeopardizes the future of its namesake studio, an almost 112-year-old institution that released The Godfather, Grease and Titanic. It also imperils CBS News, the home of Edward R. Murrow, Walter Cronkite and 60 Minutes. MTV, Nickelodeon and Comedy Central, which raised generations of kids, are already afterthoughts to anyone born this century.

The company’s troubles are also a warning sign for Hollywood, which looked to avoid the fate of newspapers, magazines and music—industries ravaged by the internet. But as media companies struggle to transition from cable to streaming, they’re surrendering the next generation of TV viewers to short-form video apps and services that tech giants in Silicon Valley and China own. So far, Hollywood has relied on restructuring and layoffs rather than innovation and growth, leading to questions about whether we’re in the last great age of TV.

Sumner Redstone split CBS from Viacom in 2006. He thought it would benefit the latter: Cable was booming—investors liked niche networks—and broadcast was seen as slow-growing and a drag on the stock. Shari opposed the move, one of several disagreements that prompted her to strike out on her own. After starting a venture capital company, among other projects, she returned to the family fold when she worried that two younger paramours were taking advantage of her father; she eventually ejected them from the family home. Redstone then spent years battling Dauman and then-CBS CEO Leslie Moonves (who didn’t want her meddling in his business) for control of her family’s two big media companies.

When Shari reunited CBS and Viacom in 2019, most media executives said it was too little too late. Netflix Inc. and Amazon.com Inc. were already spending billions of dollars annually on original programming and had built streaming services with global audiences. (Dauman had spent more than $15 billion buying back Viacom stock rather than investing in the company’s future.) Facing this onslaught from Silicon Valley, some moguls decided to cash in rather than compete. Rupert Murdoch sold most of Fox’s entertainment assets to Disney. Jeff Bewkes sold Time Warner Inc. to AT&T Inc. But Redstone, a lawyer who was as pugnacious as her father was, was in no mood to surrender.

“There was a window during which she could have pursued a merger or sale,” says one former executive, who declined to be identified because of confidentiality clauses in their exit agreement. Netflix inquired about buying Paramount Pictures in 2019 and again in more recent years. “Shari was hesitant,” the executive adds. “She had inherited this legacy.”

Instead, Redstone decided to go all-in on streaming. On their own, neither CBS nor Viacom had the scale to compete with Netflix. Viacom had no paid streaming service and had licensed two of its most popular titles, Yellowstone and South Park, to rival services. CBS had All Access and Showtime, two niche services. But the combined company owned more than 140,000 TV episodes and 3,600 movies; it was the home of NCIS, SpongeBob SquarePants and Star Trek and had rights to the NFL. Surely, Redstone thought, that would be enough.

Crafting the streaming strategy fell to Bob Bakish, a former management consultant who joined Viacom in the late 1990s. Bakish had overseen the company’s international operations and was relatively unknown in US media. But with the executive ranks of both her companies hollowed out, Redstone thought Bakish—strategic, practical and, most important, loyal—was the right fit for CEO.

Bakish had the mandate to build a streaming service, but he didn’t have the balance sheet to pay for it. The merger created a company with $19 billion in debt. To raise money, Bakish sold real estate, including the famed CBS headquarters in New York, and tried to sell book publisher Simon & Schuster. (The government blocked the sale to a competitor but later approved a deal at a lower price to private equity firm Kohlberg Kravis Roberts & Co.) He also cut costs at the company’s cable networks, gutting executive teams and programming budgets.

In 2021, Redstone and Bakish unveiled Paramount+, their answer to Netflix. The service included original movies from Paramount, a reboot of MTV’s The Real World and spinoffs of Yellowstone. Bakish advertised Paramount+ as a “mountain of entertainment,” a play on the snowy peak in the Paramount logo. The service arrived months after similar offerings from Disney, Apple Inc. and Comcast Corp., companies that dwarfed Paramount in sales and profit.

Paramount+ defied skeptics by growing more quickly than anyone anticipated. Despite its late start, the service amassed more than 50 million customers—and was adding more people in the US than any competitor. (This is still true.) Paramount’s other streaming service, Pluto TV, was growing even more quickly. Bakish had acquired the free, ad-supported business, which has hundreds of niche live channels, for only $340 million in 2019, and it was now worth billions. “The strategy we have is indisputably working,” he told Bloomberg News in September 2022. That year, Paramount released the highest-grossing movie in company history, Top Gun: Maverick, at the same time it had the most-watched drama on cable, Yellowstone.

But the company’s investment in Paramount+ couldn’t have had worse timing. It had started adding millions of customers just as rising inflation and a war in Ukraine changed how Wall Street evaluated companies. Fast growth and losses were out; profit was in. Making matters worse, Netflix’s growth stalled at the start of 2022, causing investors to worry that streaming had peaked. Whereas Netflix had spent years building toward profitability, most other companies were trying to replicate its success within an accelerated time frame. Streaming growth across the industry slowed right when companies were experiencing their worst losses.

As Paramount’s stock languished, David Nevins saw an opportunity. The former head of Showtime thought he should’ve been put in charge of programming strategy for Paramount+, given his role in creating hit shows such as Billions, Dexter and Weeds. But Bakish didn’t think Nevins’ tastes were broad enough. The company’s biggest hits were shows such as Blue Bloods and Yellowstone, not Showtime dramas. Bakish instead split oversight among multiple executives, including Nevins, who left at the end of 2022. Now on the outside, he put together financing to try to buy Showtime.

Teaming up with private equity firm General Atlantic, he offered more than $3 billion for his old network. Given Paramount’s need for cash, this seemed a no-brainer to Nevins and his financial advisers. Paramount rebuffed the offer, claiming Showtime was worth at least $5 billion. Some board members thought Paramount should take the money, but Bakish convinced them he could make more by milking Showtime for cash and folding it into Paramount+. He also had another deal in the works. He wanted to sell BET.

A touchstone of the Black community, Black Entertainment Television LLC had its own studio and a streaming service partly owned by filmmaker Tyler Perry. But it was missing out on ad dollars because it was owned by a White family, according to several people who spoke to Bloomberg Businessweek; industry experts told Bakish that advertisers would spend more money on BET if it could say it’s a Black-owned business. So he got a who’s who of Black media figures to bid, including Perry, Sean “Diddy” Combs and Allen. Bids topped $2 billion, but Paramount refused to sell for less than $3 billion. After rejecting the offer for Showtime and failing to sell BET, many Paramount employees and even some board members questioned Bakish’s handling of the sales. “We got an unsolicited offer for Showtime [from Nevins]. We looked at it. And the reality is it wasn’t that interesting to us,” Bakish said last year. (He hasn’t addressed the BET negotiations.) Paramount has been holding talks of late to sell BET to Scott Mills, its current CEO, along with outside investors.

Redstone’s doubts ran deeper. Paramount’s woes had forced the company to slash the dividend it pays to shareholders, thereby creating financial problems for her family. National Amusements relied on the cash infusions from Paramount to sustain its chain of struggling movie theaters and to pay off its debt. Last May, National Amusements raised $125 million by selling a stake to an investment firm founded by computer billionaire Michael Dell and investment banker Byron Trott. “What they’ve done to the balance sheet by competing with Netflix has created real financial problems,” LightShed’s Greenfield says. The value of the Redstone family’s stake in its media companies has dwindled from more than $5 billion in 2015 to about $1 billion today. Trott is now advising Redstone on a potential sale of National Amusements.

Redstone’s desire to extricate herself from her shrinking media empire increased after Oct. 7, the day Hamas killed about 1,200 Israelis and foreigners and kidnapped hundreds more, precipitating an Israeli invasion of Gaza. “Ever since Oct. 7, my life has been turned upside down,” she said at an event hosted by entertainment industry publication TheWrap in December. She expressed fear for her safety, the survival of Israel and the future of the Jewish people, adding that she’s using her platform to educate people about these issues. “Now it’s all I think about 24 hours a day, and it’s what motivates me from the minute I wake up to the second I go to bed.”

After years of avoiding overtures to buy the company, Redstone has finally been willing to listen. David Ellison, the CEO of Skydance Media, has been drawn to Paramount Pictures since he arrived in Hollywood as a twentysomething with dreams of making movies. Few titles affected him as much as Paramount’s Top Gun. He watched the film on VHS tapes, laser discs and DVDs; it motivated him to become a pilot, and his love of aviation inspired the name of his company. Skydance has been in business with Paramount for 15 years, co-financing and producing many of its biggest movies. Ellison worked with Paramount on the Oscar-nominated True Grit and Brad Pitt’s World War Z, and his studio is now a major stakeholder in many of Paramount’s most valuable franchises, including Mission: Impossible and Star Trek. He also produced Top Gun: Maverick.

Ellison has been expanding his business into animation with former Pixar Animation Studios boss John Lasseter and sports through docuseries deals with the NFL. Skydance raised $400 million in 2022 from investors including private equity firms RedBird Capital Partners and KKR. Recently the 41-year-old recruited his dad, tech billionaire Larry Ellison, and these investors to make a preliminary offer for National Amusements. It would give him control of Paramount, letting him merge it with Skydance—and vaulting him into the upper echelon of media moguls.

Even though Redstone has spent time with Ellison and his father, she’s been less welcoming toward Byron Allen, who’s assembled an unlikely media business combining the Weather Channel with local TV stations. Allen has tried and failed to buy several big-ticket items in recent years, including the Denver Broncos, the ABC broadcast network and BET. Investors have often questioned whether Allen had financing to seal these deals. He’s said Paramount turned him down because the company thought it could get more money. Paramount has declined to comment on Allen’s—or anyone’s—bids.

Those close to Redstone tell Businessweek there are other bidders at the table, though they declined to name them. Private equity firms have looked at Paramount but not bid on their own. High interest rates make it expensive to finance the takeover of a multibillion-dollar media company. Fellow media companies such as Warner Bros. Discovery and Comcast have also looked. Warner Bros. Discovery CEO David Zaslav has spoken with Redstone and Bakish and hired financial advisers to work on a potential bid. But the current regulatory climate would likely result in years of litigation and headaches for Zaslav. He would have to be sure this was the right deal to position his company for the future.

Executives close to the negotiations say there’s about a 50% chance a deal happens. Because Redstone is attempting to sell control of Paramount through her family holding company (among other scenarios), any deal is also more complicated because she’ll expect her controlling shares to be valued higher than those of common shareholders. Warren Buffett, Paramount’s largest shareholder, has said nothing about the talks. Investor Mario Gabelli, another major shareholder, has expressed concerns about a deal.

Many buyers say they can wait a year or two for the value of the company to drop further. Redstone’s cable networks are only going to decline more and will face financial pressure from pay-TV operators such as Charter Communications Inc., which has forced other media companies to drop certain channels from their cable packages that don’t perform well with subscribers. Her streaming service is still years away from meaningful profits—there’s a reason Paramount promoted it so aggressively during the Super Bowl—and has a limited footprint outside the US. “It is hard to see how a buyer creates value unless Paramount stock first falls toward the mid-single digits,” Greenfield wrote in a note on Jan. 25. Shares are currently trading at about $13.

Some analysts, including Greenfield, have called for Paramount to shut down its streaming service and become a pure studio, selling its top shows to other streamers. This move would require Paramount to fire thousands of employees, a fate Redstone would rather avoid. She wants to find a new owner who will preserve her father’s legacy, investing in the business rather than breaking it up for parts. But Sumner was a buyer at the beginning of the cable boom, and his daughter is a seller at its end. And if she can’t make a deal, her alternatives are bleak. This week Paramount said it would cut about 800 jobs—at least the fourth time in the past 18 months that the company has downsized. —With Christopher Palmeri and Thomas Buckley


 

 

Halo. Champions league 

[futureman 22411]

1 hour ago, HiggyBaby said:

long ass Bloomberg article below

can you compress it into one sentence?

[Parliament 14112]

If the butterfly effect is Ohio State plays all their games on my free bunny ears, I'm all for it.

[Dbeasy 14953]

[Smax 3799]

good, hope "we" dont lose those shows but there are too many streaming services now. 

[Surly Bevo 24692]

2 minutes ago, Smax said:

good, hope "we" dont lose those shows but there are too many streaming services now. 

It's almost as if the pooling principle works

[WBT 20397]

You think that because paramount is for sale all of its shows are going to disappear?

[atomheartbevo 89362]

Netflix would nab the Star Trek stuff.  Microsoft won’t let the Halo stuff disappear.

[ClubWhatever 12085]

A few months ago we got free paramount plus from some other promotion.   It seemed like mostly junk we'd already seen.  We've watched it once, for a movie that we had to rent.  Value proposition: null.

[NotActuallyALonghorn 4965]

Paramount plus is worth it if you have kids. I've enjoyed some of the original content,  but I probably wouldn't pay for it if it wasn't for the kids stuff. 

[Apep 645]

I have a subscription to Paramount+ due to my 247sports.com subscription. I never understood how they made money just giving away subscriptions year-after-year.

Edited February 19 by Apep

[immamac 42492]

1 hour ago, Apep said:

I have a subscription to Paramount+ due to my 247sports.com subscription. I never understood how they made money just giving away subscriptions year-after-year.

Spoiler: they don’t. 

[Post Oak 20182]

I watch Pluto more than I ever watched Paramount.  

[Js1 85056]

12 hours ago, atomheartbevo said:

Netflix would nab the Star Trek stuff.  Microsoft won’t let the Halo stuff disappear.

Apple would make a bid for Star Trek and Halo, I'd bet.  They're quickly becoming the streaming service most willing to put money into sci-fi type shows (For All Mankind, Foundation, Invasion, Silo, See, Monarch Legacy, Constellation) 

4 hours ago, Apep said:

I have a subscription to Paramount+ due to my 247sports.com subscription. I never understood how they made money just giving away subscriptions year-after-year.

Every time I go to cancel Paramount+, they give me 2 more months free. 

I have also never paid for a single month of MAX due to my AT&T plan

Edited February 19 by Js1

[Js1 85056]

Also just bundle Peacock and Paramount+  - that is the route they should go (and yes, they should call it CockMount+)

That's a lot of college football and basketball (B1G + ND), NCAA tournament and a ton of European soccer, plus NFL

Edited February 19 by Js1

[Smax 3799]

14 hours ago, Surly Bevo said:

It's almost as if the pooling principle works

 

 

Not only that but it seems to me the studios got greedy, when cord cutting first started to become popular, all anyone needed was 1 or 2 services. At the time that was far less then a tv cable bill ( disclosure, I never dropped my tv cable). Once studios stopped licensing (?) their content to NF and Prime and other competitors popped so some content went here, some went there, oh you want live sports now you have to pay for this.

This is probably covered and belongs in the streaming thread idk

[henrygandorf 29174]

they had a little sliver of opportunity because cbs was the only network not cooperating in hulu's "primetime tv available tomorrow on streaming" agreement.

counterpoint - cbs primetime sucks and nobody watches it except olds who watch it live.

[Burt 4062]

I had a 12 month promotional plan for $4/month. I canceled it last month when the promotion ended. A couple of days later I got an email stating I could get it free through my Walmart+ account (which I also got for a "$10 for 12 months" promotion).  I've probably only used it 10 times in the year I've had it.  

I also have Peacock for $1.99/month through March, which I'll be canceling at that time. I've used that even less.  Between Paramount+, Peacock, Hulu (which I have free through Verizon), Max, Prime and Netflix, I can't keep track of what we're watching on which service. 

[Deej 76511]

On 2/19/2024 at 6:20 AM, Apep said:

I have a subscription to Paramount+ due to my 247sports.com subscription. I never understood how they made money just giving away subscriptions year-after-year.

[MonkeyDoughnut 10135]

Well they certainly aren't paying for anyone to develop their app/service.  Worst one out there.  They still haven't fixed the issue where after a commercial break it jumps back to the previous commercial break. I thought it was just me but plenty of people complaining of it online. Been going on 3 months plus.

[ztejas 43245]

They actually have good content/offerings at this point from a value standpoint but my God it's the worst fucking streaming app I've ever used and it isn't close. They still haven't made a change to hide the nav buttons on android while you're watching something and the navigation on TVs or Xbox is fucking atrocious and constantly glitching and/or unresponsive. I mean it routinely makes me want to throw my remote through the TV.

I remember last year when the Halo series came out - I couldn't watch the episodes in anything above like 360p resolution for whatever reason so I wound up torrenting them. I illegally downloaded something I had paid access to because their app was such dogshit. 

[RPM 26185]

On 2/19/2024 at 7:54 AM, Post Oak said:

I watch Pluto more than I ever watched Paramount.  

Pluto is great. Tons of classic TV and movies plus a pretty good local news lineup.

[Native Horn 3484]

I enjoy "SEAL Team" on Paramount +.  Used to air on CBS, but now that they are on Paramount, they can actually curse like soldiers under fire might be wont to do.  Only one more season of the show though, so I'll probably dump it when it's over.

[Jive Turkey 12562]

Paramount Plus is a must for Champions League (plus you get Europa League).  i also watch the Italian league (Serie A). so i get my money's worth from soccer.  shows like The Offer, 1923, Tulsa King, and Lawmen: Bass Reeves are a bonus.  

not surprising though that it's in trouble. we're definitely overstreamed.

[Davis Lane 5548]

We had a free subscription to Paramount + for a long ass time.

And by free I mean they never charged the credit card.

Then after an upgrade of the app we were asked to login with our creds and then asked to provide CC information.

Pass.

[SimonBolivar 10898]

Those of you who say "oh someone would pick up Star Trek", do you not remember 2005-2017? 

 

[Mac8111 2103]

Howard Stern opened one of his shows last ranting about how horrible Paramount + app was and had a lengthy discussion about it.

They’ve got to do better.

[Macklemore 2898]

With my DirecTV satellite package, I get Paramount+ for free since the end of January with my Showtime subscription since they’ve rebranded the channel to Paramount+/Showtime.

[immamac 42492]

It turns out unless you own the internet pipes streaming is a bad business to be in. 

[Js1 85056]

22 hours ago, SimonBolivar said:

Those of you who say "oh someone would pick up Star Trek", do you not remember 2005-2017? 

Isn’t the idea that Paramount would sell it off instead of keeping it? Someone would pick up the rights. Apple would be a good choice 

[SimonBolivar 10898]

2 minutes ago, Js1 said:

Isn’t the idea that Paramount would sell it off instead of keeping it? Someone would pick up the rights. Apple would be a good choice 

Yeah but who is to say that they produce shows as good as Strange Worlds? I would hope they would since they're paying for it but I'm usually pessimistic about Star Trek just because we grew up (pretty sure we're almost the exact same age) in a dark dark period for Trek.

[Js1 85056]

17 minutes ago, SimonBolivar said:

Yeah but who is to say that they produce shows as good as Strange Worlds? I would hope they would since they're paying for it but I'm usually pessimistic about Star Trek just because we grew up (pretty sure we're almost the exact same age) in a dark dark period for Trek.

I'd trust Apple if they bid for it.  Go look at their catalogue for science fiction.  They put a lot of money into Foundation and For All Mankind. 

[billfromlaketravis 11352]

On 2/19/2024 at 11:24 AM, henrygandorf said:

they had a little sliver of opportunity because cbs was the only network not cooperating in hulu's "primetime tv available tomorrow on streaming" agreement.

counterpoint - cbs primetime sucks and nobody watches it except olds who watch it live.

The Fox News model. 
 

Yes it’s almost exclusively old, but other than sports, CBS and Fox News are the only channels viewers watch live. Surely that some value for advertisers. 

[Chopper 17126]

wrong thread

Edited February 21 by Chopper

[Chopper 17126]

On 2/19/2024 at 10:03 AM, Js1 said:

Also just bundle Peacock and Paramount+  - that is the route they should go (and yes, they should call it CockMount+)

The + really isn't necessary.

General comments - Shari Redstone is trying to sell Paramount and its holding company. Unlikely anyone is going to want to go into business with a company when they don't know who its owners will be in a few months. A paramount and peacock bundle seems unlikely at this stage.

While Paramount streaming is garbage, and is neck and neck with Peacock for the shittiest, least-streamed service, they do own a storied Hollywood studio. The odds seem to be on Larry Ellison's son walking away as the eventual owner.

For obvious reasons Comcast/NBC isn't going to be buying the company that owns CBS. Also while Comcast's business isn't great, compared to Paramount, it's on a whole other level.

[CooterBrown 17875]

A joint ABC, CBS, NBC, and FOX streamer could work.  Each network's profit is based on view of their IP.  You only pull 9% of the viewer minutes on the streamer? You get 9% of the profits. Expenses for running the infrastructure is split evenly.  It'd incentivize them all to produce quality content. 

Edited February 21 by CooterBrown

[idigTexas 2258]

I watch more Paramount+ than anything right now, and recently went to an annual no-ads subscription, so this is obviously my fault.  Sounds like I better get through all the Treks and anything else while I can.  

[Herpa Derpa 6105]

3 hours ago, billfromlaketravis said:

The Fox News model. 
 

Yes it’s almost exclusively old, but other than sports, CBS and Fox News are the only channels viewers watch live. Surely that some value for advertisers. 

The average CBS/Fox News watcher is not a desired demographic for advertisers. Except for gold and reverse mortgages vendors.

[Js1 85056]

CBS’ value now has to be sports. Bc have a chunk of March Madness, half the NFL, soon to be B1G football in 2024 and golf and some soccer. Plus college basketball outside of MM

Edited February 21 by Js1

[henrygandorf 29174]

8 hours ago, CooterBrown said:

A joint ABC, CBS, NBC, and FOX streamer could work.  Each network's profit is based on view of their IP.  You only pull 9% of the viewer minutes on the streamer? You get 9% of the profits. Expenses for running the infrastructure is split evenly.  It'd incentivize them all to produce quality content. 

that's basically what hulu is/was minus the cbs piece.

[AbeFroman 2107]

A close friend of mine that I had known all my life passed away 3 years ago.  He had been letting me use his Paramount+ login since he got it.  A little while back I realized his login still works for some reason. 

At first, it seemed a little odd and dark when his name would pop up real big on the screen when logging in, but actually it's kind of comforting.  Something that still connects us.  So don't go turning that shit off Paramount.

[Billy Pilgrim 1912]

There’s a few good things on there but most of the stuff I’d like to watch you’d have to pay extra for the showtime package. Already have too many streaming services. I said no thanks when my subscription expired in January 

[Chopper 17126]

12 hours ago, AbeFroman said:

A close friend of mine that I had known all my life passed away 3 years ago.  He had been letting me use his Paramount+ login since he got it.  A little while back I realized his login still works for some reason. 

At first, it seemed a little odd and dark when his name would pop up real big on the screen when logging in, but actually it's kind of comforting.  Something that still connects us.  So don't go turning that shit off Paramount.

Paramount+ is free with a walmart+ membership, which is also free if one has amex plat. Either his widow has amex plat, walmart+, or maintains paramount+ on her own. If none of the above apply then their billing department is fucked up, which wouldn't exactly be a surprise.

 

[Parliament 14112]

23 hours ago, Herpa Derpa said:

The average CBS/Fox News watcher is not a desired demographic for advertisers. Except for gold and reverse mortgages vendors.

And robot insurance.

[Hermanator 6916]

On 2/18/2024 at 7:46 PM, futureman said:

can you compress it into one sentence?

Rich assholes who spent decades nickel and diming us got fucked in the ass by the Internet and cord cutters

[futureman 22411]

7 minutes ago, Hermanator said:

Rich assholes who spent decades nickel and diming us got fucked in the ass by the Internet and cord cutters

fuck you’re stupid. 

[Hermanator 6916]

11 hours ago, futureman said:

fuck you’re stupid. 

Says the illiterate cunt that didn't read the article

[futureman 22411]

that’s offensive. 

[BabaYaga 15202]