Plans to sell the Hollywood group Paramount are causing turbulence. Now the boss is being replaced by a trio of managers.
Captivating blockbusters like “The Godfather” came from Paramount – now the Hollywood company is causing drama itself with a sales crime thriller. Yesterday, long-time boss Bob Bakish was replaced by a trio of managers amid sales negotiations.
The turbulence could influence what films and series can be expected from Paramount in the future. The media giant, which includes the traditional Hollywood studio as well as TV channels such as CBS, MTV and Nickelodeon, has received a merger offer from the film production company Skydance. However, according to media reports, there is a dispute between investors and the most important shareholder Shari Redstone.
Her father, Sumner Redstone, built the media empire that brought them together under the Paramount umbrella after his death. According to media reports, some shareholders feel disadvantaged by the Skydance offer – which has recently caused tensions between Bakish and Shari Redstone.
Shareholders expect improvements
The share structure provides fuel for the deal. There are around 41 million shares with voting rights – and more than 600 million without. Shari Redstone owns a good 31 million of the voting shares. So your share is more than enough to get control of the entire group.
According to media reports, this is exactly what Skydance wants to benefit from. Accordingly, Skydance owner David Ellison’s first plan was to initially buy Redstone’s holding National Amusements, which also owns its Paramount shares with voting rights, for around two billion dollars. As a second step, according to reports, the Paramount group, which is now under Ellison’s control, was to acquire Skydance for a purchase price of five billion dollars in the form of shares. That way, Ellison would have power over Paramount and the two companies would be under one roof – without having to spend a lot of money on the non-voting shares.
Further offers are on the table
According to media reports, the owners of the non-voting shares criticized the plan for favoring the Redstone family. Skydance is said to have improved the offer for you over the weekend. Paramount also has a $26 billion offer from the financial firm Apollo, in which Hollywood rival Sony supposedly also wants to get on board. Negotiations will be held exclusively with Skydance until the beginning of May.
Among other things, Skydance brought Paramount money as co-producer of the box office hit “Top Gun: Maverick.” According to the plans, Ellison should take over the management of Paramount after the merger, it was said. His father Larry Ellison, the billionaire founder of the software company Oracle, wanted to help finance the deal, US broadcaster CNBC reported.
Paramount+ is making losses so far
Under Bakish’s leadership, Paramount scored several box office hits and did good business with advertising around the American football final game, the Super Bowl. At the same time, the group accepted high losses when setting up its streaming service Paramount+. In the last quarter, the global number of Paramount+ users rose to over 71 million. But the service still brought in an operating loss of $286 million.
Overall, Paramount increased consolidated sales by 5.8 percent year-on-year to almost $7.7 billion in the last quarter. At the same time, there was a bottom line loss of $554 million after a loss of around $1.12 billion in the same quarter of the previous year.
The new management trio consists of CBS boss George Cheeks, film studio boss Brian Robbins and Chris McCarthy, who runs the Showtime and MTV channels. At the usual conference call with analysts after the quarterly figures were presented, the three top managers did not allow any questions and instead limited themselves to brief statements. After less than ten minutes it was over – and at the end there was the theme music from “Mission: Impossible”.
Source: Stern
