The consortium made up of Skydance Media, KKR and RedBird Capital has increased its offer for Paramount Global, a few days before the end of the month of exclusive negotiations that the two companies had reserved for themselves and which at this point will probably not be extended beyond May 3.
The Skydance offer
The offer, defined as “the best and last”, is worsening in some ways and improving in others. Pejorative for Shari Redstone, owner of National Amusements, the company that owns the largest number of Class A shares (those with voting power, and therefore control) in Paramount Global. In fact, Skydance initially proposed almost $2 billion to acquire National Amusements, with a significant premium compared to the valuation of $700 million. But the final offer includes a figure of less than 2 billion for Redstone’s company (it still remains much higher than the market value). Instead, it is an improvement in the sense that it proposes, surprisingly, to pay almost 3 billion dollars (with a 30% premium) to Class B shareholders (who have no voting power), i.e. the majority. These shareholders have repeatedly threatened to legally oppose the acquisition: lawsuits that they will tend to lose, but which will slow down the process. So the final offer is aimed at ingratiating these shareholders, who according to sources cited by Deadline would now actually be more compliant. David Ellison, head of Skydance (and son of Oracle founder, billionaire Larry Ellison), is well regarded by Paramount management and a good friend of the Redstone family. Furthermore, unlike the plan of Apollo Global Management / Sony (the other “contender” consortium), that of Skydance does not envisage the dismemberment of the major but its valorisation, as demonstrated by the intention to involve the former CEO of NBCUniversal Jeff Shell driving the new giant together with Ellison.
Bob Bakish has officially resigned
The weekend rumors were then confirmed: today Bob Bakish has submitted his immediate resignation from the leadership of Paramount Global. In its place, a new special committee was installed, a triumvirate of executives composed of Brian Robbins (CEO of Paramount Pictures and Nickelodeon and CCO of Paramount+), George Cheeks (CEO of CBS and CCO of Paramount+) and Chris McCarthy (CEO of Showtime /MTV and Paramount Media Networks). Ellison gave them the offer, which will be definitively evaluated in the next few days.
Bakish has worked for Viacom/CBS/Paramount since 1997, he has always been very close to the Redstone family and it was Shari who wanted him to lead in 2016, first at the helm of the then autonomous Viacom, then of the combined ViacomCBS group in 2019, and finally of the current version of the company called Paramount Global. But relations between them would have deteriorated with the arrival of David Ellison, even if it had been clear for some time that whatever was in store in Paramount’s future, Bakish had to step down from the helm.
Bakish’s farewell, however, is designed to give a definitive push to the company in one direction or another, in order to move it from the current paralysis that is literally consuming it.
Quarterly data
In all of this, the fiscal data for the first quarter of 2024 are not so negative, also and above all thanks to the great boost of the Super Bowl on television and streaming channels. Paramount+ acquired another 3.7 million subscribers (rising to 71 million globally), cutting losses by 40% (from $511 million to $286 million) and increasing revenues by 24%, to $1.8 billion.
In general, the group’s revenues grew by 6%, largely thanks to the Super Bowl advertising revenue which recorded record audiences.
Paramount Global’s largest business is television, bringing in $5.2 billion in revenue in the quarter. However, it is a sector in rapid decline (both linear and cable TV are threatened by streaming), which worries shareholders greatly.
Revenues from cinematographic activities and related licenses were also good, with 605 million dollars.
