Thomas Bridge’s Post

Skydance and Paramount are deep into hashing out a complicated deal that would see the David Ellison’s studio and its backers take control of the storied film and television company owned by Shari Redstone. The exclusive month-long negotiating period through May 3 is likely to be extended perhaps by a few weeks, Deadline hears, given the complexity of the transaction. The rough contours of a Skydance deal would see a circa $2 billion payout to Redstone for a majority stake in family holding NAI (which controls Paramount though its voting Class A shares) as well as the National Amusements theater chain and associated real estate assets. Step two would see Paramount acquire Skydance in an all-stock deal valued at circa $4-5 billion. That’s being worked on and will likely wind up at the high end of the range.

Great solution to a complex issue

Paramount Global faces uncertain times with its $16 billion debt and shifting industry dynamics. Amidst various suitors, Skydance emerges as a potential savior, led by CEO David Ellison. His track record and commitment to quality content could be Paramount's best bet for survival. While financial considerations loom, a partnership with Skydance offers hope for navigating industry changes. Paramount's future may rest on Ellison's shoulders, as Shari Redstone considers the studio's legacy and future prospects. Hard to imagine losing another studio with such rich history. #ParamountGlobal #Skydance #DavidEllison #EntertainmentIndustry #FutureOfFilm https://lnkd.in/gTPnZESx

What's New to TheStreet... 🎬 Big News: Paramount Global is merging with David Ellison’s Skydance Media, marking the end of the Redstone family’s era with the Hollywood giant. What are your thoughts on this new chapter? Share your opinions below! 🌟🎥 ⬇️ 👉🏻Follow New To The Street for more! #paramount #skydancemedia #hollywood #entertainmentnews #mergerannouncement #businessnews #business #news #newtothestreet

What's New to TheStreet... 🎬 Big News: Paramount Global is merging with David Ellison’s Skydance Media, marking the end of the Redstone family’s era with the Hollywood giant. What are your thoughts on this new chapter? Share your opinions below! 🌟🎥 ⬇️ 👉🏻Follow New To The Street for more! #paramount #skydancemedia #hollywood #entertainmentnews #mergerannouncement #businessnews #business #news #newtothestreet

Paramount Pictures has a prominent place in this week’s Barron's magazine. For those of you from the movie world…Barron’s is like the Bible of Wall Street. It is read by pretty much everyone at the highest levels. I’m now convinced a deal is going to happen but won’t be what people think. The deal has been in play for a while which means many parties have the full data on Paramount besides what is in SEC filings. Lots of smart bankers / hedge funds / private equity funds are going to apply their magic finance voodoo. As Paramount loses money every day…every month..every quarter the enterprise value of the company continues to drop. There will be a point where the equity value will be so low that the entire company will be worth its debt currently around $16 billion. Sony Pictures Entertainment looks like a genius just being a supplier of movies to Netflix . I heard a rumor that Madame Web’s Pay One deal from Netflix was around $20 million USD. Everything seems so clear on hindsight but this should have been the path Paramount pursued versus being the biggest company to go down due to fighting in the streamer wars.

I wonder what would happen if— and hear me out on this one— if these major companies allocated just a quarter of the resources and energy they devote to mergers and acquisitions toward developing original TV concepts and movies? Could Hollywood have already rebounded from the significant financial setbacks it faced due to the pandemic and strikes? What if investing less in existing intellectual property and more in creativity led to breakout successes? Could this transform Hollywood's reputation and, in turn, prove more profitable? I understand the concept of market consolidation and the significance of strong leadership. I also understand the allure of the high-stakes games played by Wall Street. However, I don't understand the logic in the perceived lower risk in pursuing mergers and acquisitions, which often lead to debt and layoffs, over scaling more original/creative project ideas. It often seems as though these executives and CEOs derive more enjoyment from discussions about building monopolies than they do from fostering creativity and storytelling.

With Paramount in Chaos and Its Future Uncertain, Its Chief Steps Down https://lnkd.in/dcKQNbpd

From the Journal: In recent weeks, Redstone has met with Skydance Media Chief Executive David Ellison and Activision CEO Bobby Kotick about a potential sale, according to people familiar with those talks. Meanwhile, Paramount is bracing for further cost cuts. The company has discussed laying off more than 1,000 workers early next year, people with knowledge of the discussions said.  A weaker-than-expected ad-sales market has caused the company to more aggressively cut costs to meet its promise to investors that it would deliver positive earnings growth in 2024. The company has been paring down its head count since earlier this year. Plus, the company’s carriage deals with two of the biggest cable companies in the country are set to expire in the coming months. That Redstone is discussing a sale of National Amusements after battling with her late father Sumner Redstone, his girlfriends and senior company executives for control, is a sign of the difficult choices #media executives are confronting. Paramount’s once-lucrative cable channels are in structural decline; #Hollywood is still recovering from months long actor and writers strikes that froze productions; and its flagship Paramount+ #streaming business continues to burn cash. She had hoped Paramount’s stock would rebound before entertaining offers. Paramount’s shares were down almost 12% this year to $15 a share Thursday, before a report from newsletter Puck that Skydance was discussing buying National Amusements. The stock closed on Monday at $16.24 per share.  Many of the potential buyers for Paramount, which owns cable networks such as Nickelodeon and BET and broadcast network CBS, are primarily interested in its movie studio. That is a nonstarter for Redstone, who is adamant that Paramount Pictures, the crown jewel of the company and an asset her father insisted on keeping, not be sold on its own. Buyers that have considered a play for National Amusements’ assets include billionaires, studios, streamers and private-equity companies. Netflix executives have broached the idea of a potential deal for some assets National Amusements controls as recently as this year, though conversations have cooled as the streamer focuses on its efforts to limit password sharing, according to people familiar with the situation. The streamer was particularly interested in Paramount’s movie studio, Paramount Pictures, home to hits such as “Mission Impossible,” and “Top Gun,” some of the people said.  Skydance’s Ellison, with its investor RedBird Capital Partners, also expressed interest in Paramount’s movie studio in recent weeks and is open to a deal for all of National Amusements to get it, those people said. Then there is Warner Bros. Discovery, whose chief executive David Zaslav has weighed the pros and cons of making a run at Paramount Redstone and #Paramount CEO Bob Bakish have so far been keen to only sell noncore assets and keep as much of the company intact as possible. 

Paramount Global (Viacom CBS) controlled by NationalAmusements is more a mess than people realize. This is conglomerate is: Paramount, Showtime, CBS, BET, MTV, CMT, Nickelodeon, Comedy Central, Paramount+, Pluto TV. It is preparing for layoffs, maybe a sale, and closing streaming services. ----- Variety: "Paramount Global Mulling 1,000-Plus Layoffs Amid Shari Redstone’s Talks to Sell Controlling Interest (Report)" Variety: https://lnkd.in/giYsJFwf ----- YahooFinance: "Shari Redstone Weighs Sale of Stake in Paramount Global" (Thomas Buckley & Michelle F. Davis) (Dec 12, 2023 at 6:33 AM PST·3 "Redstone has held talks with Hollywood producer David Ellison, and RedBird Capital Partners, about an acquisition of her family’s stake in the business, according to people familiar with the matter. A buyer of Redstone’s stake could generate $13.5 billion by selling Paramount’s TV networks, including CBS and Showtime, according to Wells Fargo & Co.’s Steven Cahall. The remaining businesses, including the Paramount Pictures film studio and production operations behind shows like the hit TV series Yellowstone, could be worth $19 billion, or around $23 a share, he said . Shares of Paramount were down about 1% Tuesday morning in New York at $16.09. Proceeds from asset sales would be used to reduce Paramount’s $15.6 billion in long-term debt by two-thirds. Cahall’s analysis also envisions new owners closing the Paramount+ streaming service, which is projected to lose $1.6 billion this year. Whether a sale actually occurs is in the hands of Redstone, who is Paramount’s chairperson and controls 77% of the voting shares through a family holding company, National Amusements Inc. The websites Deadline and Puck reported on the talks last week. Activision Blizzard Inc. CEO Bobby Kotick, who is leaving that company at the end of the month, has also held talks with Redstone about a potential sale, the Wall Street Journal reported on Monday. The newspaper also said Paramount is considering layoffs of 1,000 workers early next year. A spokesperson for the company declined to comment on any job cuts. YahooFinance: https://lnkd.in/gMEUNb9h ----- Bloomberg: "Shari Redstone Weighs Sale of Stake in Paramount Global --Legacy TV channels could fetch $13 billion, analyst suggests --Proceeds could help smaller, production company reduce debt" "Shari Redstone is contemplating the sale of her interest in the Paramount Global movie and TV empire, a deal that could lead to more than $13 billion in asset sales, including the CBS network." Bloomberg: https://lnkd.in/gjkmdwbQ ----- WallStreetJournal: "Redstone’s Predicament: Whether to Sell or Fix Her Media Empire. Shari Redstone considers sale of controlling stake in National Amusements amid pressures from Paramount’s cable business, ad market" "Shari Redstone has a decision to make: fight or flight." WallStreetJournal: https://lnkd.in/gxwBfRhN #hollywood #filmindustry #tvindustry #streamingmedia #paramount #cbsviacom