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A CEO shake-up, the home stretch of a takeover offer, a critical carriage negotiation and key advertising talks are colliding at the same time — and could decide the future of the storied company.
By Alex Weprin
Media & Business Writer
It’s the moment of truth or consequences for Paramount Global.
The entertainment giant, controlled by Shari Redstone via her family’s National Amusements holding company, is in the middle of arguably the most fateful week in its history, with critical business decisions set to collide.
On Sunday, the group of David Ellison’s Skydance, Gerry Cardinale’s RedBird Capital and KKR submitted a “best and final” offer that would see them acquire National Amusements and merge Paramount with Skydance, infusing the company with fresh cash and installing a new leadership team.
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The expanded deal also includes sweeteners to try and convince hesitant common stockholders to support the deal, a source tells The Hollywood Reporter.
The move arrives as the fate of Bob Bakish as CEO is hanging in the balance, hours before Paramount was due to report a key Q1 2024 earnings report, with Wall Street anxious to see how the company has performed amid the deal chatter.
On Tuesday, Paramount is set to see its carriage agreement with Charter Communications expire. Charter is the largest pay TV provider in the country and has been playing hardball with its entertainment partners, as last year’s multi-week Disney blackout underscored.
Charter is demanding that its TV partners that also own streaming services give its pay TV customers access to the streaming option, a deal that Disney acquiesced to (Disney would ultimately remove channels like Freeform and Disney Junior from Charter’s lineup to make up for it), and that TelevisaUnivision followed.
Paramount, with its Paramount+ service, is no exception. And Bakish had been involved in those negotiations.
Meanwhile, Paramount’s ad sales team is beginning upfront talks with advertisers, with the company holding meetings with buyers inside a former taxi fleet garage in Manhattan’s Chelsea neighborhood. The first one is set for Monday, April 29, with meetings scheduled to run through next week.
In the classic TV game show Truth or Consequences (which debuted on CBS in 1950!), the stakes were high for contestants to get the questions right, less they have to endure a crazy or wacky stunt.
The fate of Paramount has been a wild affair, with plenty of twists and turns, but the stakes are seriously high for the company.
New interim executive leadership at a difficult moment is risky, especially if they will be tasked with executing a merger, and walking the tightrope of the carriage and ad dealmaking.
A Charter blackout could crush carriage revenue at a critical moment, while a bad deal would hamper its revenue for years. A light upfront, meanwhile, could hurt ad sales for the next 12 months.
And while the Skydance-led deal is still seen as the clear favorite of Redstone, private equity giant Apollo is waiting in the wings, with the Japanese tech conglomerate Sony appearing ready to join them in a bid that could spur a bitter and public revolt from some shareholders.
With the Skydance exclusivity window set to end later this week, that other offer may be right around the corner.
A source familiar with the talks confirms that the Skydance has offered to sweeten the deal by increasing its cash infusion to $3 billion, with Redstone lowering her take to offer Class B shareholders a premium.
Paramount’s special board committee is ultimately responsible for recommending (or not) the Skydance deal, with the latest offer said to be reacting to requests from the committee.
“National Amusements specifically requested that the Paramount Board form a Special Committee to exercise their independent judgment in considering a potential transaction with Skydance,” a National Amusements spokesperson tells THR.
The rep adds, “National Amusements has no role on the Committee, and we respect the Committee’s process and ultimate decision on whether the Skydance deal presents an attractive transaction for Paramount and whether they want to continue to move forward.”
But the imminent departure of Bakish, who in the company’s last earnings call said that he was interested in looking at deals that would “benefit all shareholders” (emphasis his), suggests that Paramount is now Skydance’s to lose … provided the company can execute the high-wire act it needs across its business lines and also manage its shareholder revolts.
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