DIS Shareholders and Stock Info ONLY

[wabbott]

https://finance.yahoo.com/news/skydance-revises-paramount-offer-3-163352945.html

Skydance Revises Paramount Offer With $3 Billion Cash Infusion to Allay Shareholder Worries
by Lucas Manfredi
Mon, Apr 29, 2024, 11:33 AM CDT

David Ellison’s Skydance Media has made a revised offer for Paramount Global in an effort to assuage minority shareholders’ concerns as the two parties’ exclusive talks are set to expire on May 3.

An individual familiar with negotiations tells TheWrap that the new offer includes a $3 billion cash injection as well as premium sweetener for a percentage of non-voting Class B shares.

The two-step deal would see Skydance acquire the company through controlling shareholder Shari Redstone’s stake in National Amusements, which owns 77% of Paramount voting stock. The second step would see Skydance and Paramount merge to create a combined company valued at around $5 billion. Under the new terms, Redstone, who is already set to get a premium for her shares, could take less cash and keep more equity in Paramount under one scenario being discussed.

Representatives for Paramount and Skydance declined to comment. A spokesperson for National Amusements and Redstone did not immediately return TheWrap’s request for comment.

The new terms come as a number of investors have expressed opposition to the Skydance deal, including Matrix Asset Advisors, Ariel Investments, Aspen Sky Trust and Blackwood Capital Management.

Ariel’s founder and chairman John Rogers Jr., whose firm had a 1.8% stake in Paramount as of the end of 2023, and GAMCO Investors Inc. chairman and CEO Mario Gabelli, who owns 5 million voting shares, have also both previously warned that they could pursue litigation if the Skydance deal or any other bid does not appropriately benefit their clients.

In addition to Skydance, Apollo Global Management made a $26 billion all-cash offer, which was reportedly rebuffed due to concerns around the financing of its bid. The private equity firm has since entered talks with Sony about potentially making a new joint bid, though no offer has formally been made.

Paramount is slated to report its earnings results for the first quarter of 2024 after the bell on Monday. Analysts surveyed by Zacks Investment Research expect the company to report earnings of 34 cents per share on revenue of $7.68 billion.

Additionally, Paramount Global CEO Bob Bakish is expected to exit his role, two insiders told TheWrap on Saturday. According to The Wall Street Journal, Paramount will establish an “Office of the CEO,” composed of the company’s division heads, to replace Bakish on an interim basis.

Bakish’s departure follows news earlier this month that four members of the board — including three who were on the independent special committee evaluating bids — would not seek reelection at Paramount’s June 4 annual meeting.
Shares of Paramount, which are up more than 3% during Monday’s trading session, have climbed 12% in the past six months but are down 47% in the past year and 14% year to date.

The post Skydance Revises Paramount Offer With $3 Billion Cash Infusion to Allay Shareholder Worries appeared first on TheWrap.

 

[wabbott]

https://variety.com/vip/survey-netflix-ad-plan-20-million-us-subscribers-harrisx-1235983888/

April 29, 2024 6:00am PDT
by Tyler Aquilina
Survey Suggests Netflix Ad Plan May Have More Than 20 Million Subscribers in U.S.

If the plan for Netflix’s ad tier was to follow a “crawl, walk, run” progression, as the company’s CFO once put it, the business now seems to be walking at a healthy clip.

Results from the latest quarterly streaming survey by HarrisX, shared exclusively with Variety Intelligence Platform, show that Netflix’s ad-supported tier is, as of the end of Q1, the second most common subscription plan for the service among U.S. households of the four tiers Netflix offers.

Out of more than 9,600 U.S. Netflix subscribers polled, 27% were on the “Standard with ads” plan, behind only the “Standard” plan — the cheapest ad-free tier currently on the domestic market — at 32%.

These results suggest adoption of the ad plan has accelerated significantly since it launched to muted results about a year and a half ago. It’s unclear how many users currently subscribe to the plan worldwide; Netflix has never revealed exact subscriber counts for the AVOD tier and has not disclosed any figures since announcing in January that it had surpassed 23 million global monthly active users.

But based on rough extrapolation from these survey results, around 22 million users may now exist in the domestic market alone. Netflix had about 82.7 million subscribers in the U.S. and Canada at the end of Q1, per its earnings report for the quarter; 27% of that figure is about 22 million.

There are caveats to this estimate, of course — the HarrisX survey covered only the U.S., not Canada, for instance — but it’s not an unreasonable ballpark for the ad plan’s domestic user base.

The U.S., after all, is Netflix’s largest single-country market, and “Standard with ads” is available in only 11 other countries worldwide: the U.K., Australia, Brazil, Canada, France, Germany, Italy, Japan, South Korea, Mexico and Spain.

And if we assume the AVOD tier has maintained its November-to-January growth rate — the ad plan had 15 million monthly active users at its one-year anniversary last November — its global total would now stand at more than 30 million, or around 11% of Netflix’s subscriber base. Not too shabby, considering the ads business is less than two years old.

Its upward potential also remains significant. According to the HarrisX survey, as of Q1 nearly 20% of U.S. subscribers were still on the ad-free “Basic” plan, for which Netflix discontinued new subscriptions last summer. The streamer is already at work on eliminating that tier entirely in some markets, “starting with Canada and the U.K. in Q2 and taking it from there,” as the company’s Q4 ’23 shareholder letter noted.

The question, of course, is how many users will be lost versus how many will migrate to the ad-supported plan once the Basic tier is eliminated. Given Netflix’s success at converting many non-paying users through its password-sharing crackdown, however, it’s logical to assume eliminating the Basic plan would be a net benefit for the company.

Furthermore, Netflix’s penetration in the U.S. remains lower than one might think, given the streamer’s seeming omnipresence in the cultural landscape. While more than half of households subscribe to the service among every age bracket, penetration remains below 70% for all but one demographic — ages 25-29, per the HarrisX survey.

The ad plan will be a key tool for further expansion, particularly as growth from the password-sharing crackdown begins to ebb. But while the crackdown has primarily been viewed as a short-term growth strategy, it could work in tandem with the AVOD tier as a long-term engine: As younger users exit their parents’ households, for instance, they will be forced to begin paying for their own subscriptions and may find the ad-supported plan appealing as a low-cost option.

In short, Netflix’s push into ads is beginning to manifest the true potential it always possessed, despite its slow start. And of course that’s good news for a business shifting from a high-growth model to a long-term, slow-growth one that will be increasingly reliant on ad revenues.

As the streamer reorients its focus to prioritize engagement rather than subscriber growth, advertising will only become more vital to its business model, with time spent on the AVOD tier driving revenue. If these survey results are any indication, user growth is more or less on rails at this point, and boosting engagement should indeed be priority number one.

 

[wabbott]

https://ir.paramount.com/static-files/788ef7dd-d093-4fb6-9e4a-43a81169eb41

PARAMOUNT REPORTS Q1 2024 EARNINGS RESULTS
« Paramount+ Increased Revenue 51% Year-Over-Year and Reached More Than 71 Million Global
Subscribers
« Direct-To-Consumer Adjusted OIBDA Improved Year-Over-Year for the 4th Consecutive Quarter
« Total Advertising Revenue Rose 17%; Total Company Revenue Increased 6%
« Generated $260 Million of Net Operating Cash Flow and $209 Million of Free Cash Flow in Q1

 

[wabbott]

https://www.nytimes.com/2024/04/29/business/media/paramount-bob-bakish-steps-down.html

With Paramount in Chaos and Its Future Uncertain, Its Chief Steps Down

Bob Bakish was once a staunch ally of Shari Redstone, Paramount’s controlling shareholder. His departure comes as the company considers a major merger.

By Benjamin Mullin and Lauren Hirsch
April 29, 2024 - Updated 5:46 p.m. EDT

Shari Redstone, the owner of Paramount, has tried to resist the erosion of her media empire over the last decade as she confronted the death of cable TV, the rise of streaming and even a failed boardroom coup from a longtime ally.

By her side through it all has been Bob Bakish, Paramount’s chief executive. For years, she saw him as a loyal lieutenant who could navigate the treacherous entertainment industry with the financial dexterity of the management consultant he once was. As Paramount’s share price sagged, she was patient with him — even as she steered the company toward an eventual sale that he had reservations about.

That patience officially ran out on Monday.

Mr. Bakish is stepping down effective immediately, Paramount announced on Monday, a stunning shake-up in the top ranks of the company as it considers a major merger.

Mr. Bakish, 60, will be replaced by an “office of the C.E.O.” run by three executives: Brian Robbins, head of the Paramount movie studio; George Cheeks, chief executive of Paramount’s CBS division; and Chris McCarthy, chief executive of Showtime and MTV Entertainment Studios.

Looming over Mr. Bakish’s exit are broader questions about the future of Paramount. Like many media companies, Paramount has struggled in recent years to get its streaming business off the ground as audiences for its cable channels have diminished. As a result, it has long been considered an acquisition target by rivals looking to build up their content libraries and increase their leverage in cable negotiations.

In recent months, the company has been in discussions to merge with Skydance, a media company run by the tech scion and Hollywood executive David Ellison. Ms. Redstone, who is Paramount’s controlling shareholder, has already signed off on a potential deal for her stake, but the company’s directors have yet to reach an agreement for the whole company.


Several shareholders have come out publicly against a combination with Skydance, saying it would enrich Ms. Redstone at the expense of other investors. The private equity firm Apollo Global Management and Sony have discussed making an all-cash bid for Paramount, an offer that could give the company a serious alternative. But any talks with other suitors must wait until the exclusive negotiation period with Skydance lapses, in early May.

In an effort to assuage those concerns, Skydance sweetened its proposal in recent days. The company told Paramount that it would provide a $3 billion cash infusion to pay down debt and buy back shares, money that would come from the private-equity firm RedBird Capital and the Ellison family. Skydance also offered to give Paramount shareholders a larger stake in the combined company than it previously contemplated.

It is unclear if Skydance’s sweeteners will be enough to convince the special committee of board members evaluating the merger with Skydance that the deal treats all shareholders fairly. The rare nature of Mr. Bakish’s departure could put extra pressure on the committee to show they’re negotiating the best deal for shareholders, said Jim Woolery, founder of Woolery & Company, an advisory firm.

“It creates a point of leverage,” said Mr. Woolery, who has advised many special committees. He said it was now more likely that the special committee would open up deal talks with Apollo and Sony or consider allowing rival bidders to step in after any deal with Skydance is signed and giving Skydance the right to match a higher offer.

Mr. Bakish has been an employee of Paramount since 1997, and he and Ms. Redstone have been allies for years. He took over as chief executive in 2016 after a rift opened between the Redstone family and one of his predecessors, Philippe Dauman, and Mr. Bakish was her preferred candidate to run the company after it merged with CBS in 2019.

But Ms. Redstone’s relationship with Mr. Bakish began deteriorating over the last year, three people familiar with their interactions said. Ms. Redstone perceived he had missed opportunities to strike lucrative deals for the company, including a sale of its Showtime and BET cable networks, they said. In 2021, the private equity firm Blackstone expressed interest in acquiring the Showtime cable network for at least $5.5 billion, an eye-watering sum for a business in long-term decline, one of the people said. Paramount did not pursue that deal.

The Wall Street Journal earlier reported on Blackstone’s interest in Showtime.

Mr. Bakish is in line for a big payday. According to the data firm Equilar, he is entitled to a severance package of $50.6 million, with $31 million of that in the form of cash for the two years after his employment is terminated.

Ms. Redstone came to believe that Mr. Bakish wasn’t moving with enough urgency to get Paramount on firmer footing, the three people said. Mr. Bakish also told the special committee this year that he had reservations about the company’s merger with Skydance, one of the people said.

Mr. Bakish’s position became untenable in recent weeks after he presented a long-term plan to the special committee that Ms. Redstone believed did not adequately reflect the input of the company’s top executives, including Mr. Robbins, Mr. Cheeks and Mr. McCarthy, the three people said. Ms. Redstone approved discussions between those executives and representatives of the board, including Charles Phillips. During the conversations, the executives expressed misgivings about the direction of the company, the people said.

Mr. Bakish’s departure marks the end of an important chapter in Paramount’s history. He was a pioneer of a strategy to offer streaming entertainment directly to consumers, creating the Paramount+ streaming service and acquiring Pluto TV, a free, ad-supported streaming service.

Mr. Bakish had an unlikely path to the top of Paramount. A former consultant at Booz Allen Hamilton, he joined Viacom, Paramount’s predecessor, after advising Paramount Communications on strategy for its Madison Square Garden division. Mr. Bakish rose to become head of Viacom’s international channels division, and was tapped in 2016 to succeed Tom Dooley as chief executive.

He got the top job during a perilous time for Viacom. The company’s bellicose approach to negotiations with cable companies — its most important partners — resulted in its being dropped by the Suddenlink cable system in 2014. Viacom’s share price tumbled. Mr. Bakish took a more measured approach to negotiations, improving the relationship with cable providers and stabilizing the company.

Despite those efforts, Paramount’s share price has continued to sink over the years, reflecting investors’ skepticism about the cable TV business. Over the last year, the price has fallen 48 percent as the cable bundle — once an industry-defining juggernaut — continues to lose subscribers.

After more than a quarter-century at the company and its predecessor, Mr. Bakish’s send-off from Paramount was unceremonious. In brief remarks at the end of the company’s first-quarter earnings call, Paramount’s chief financial officer offered his former boss terse congratulations on navigating “a number of challenges.”

He did not take any questions.

Benjamin Mullin reports on the major companies behind news and entertainment. Contact Ben securely on Signal at +1 530-961-3223 or email at benjamin.mullin@nytimes.com. More about Benjamin Mullin

Lauren Hirsch joined The Times from CNBC in 2020, covering deals and the biggest stories on Wall Street. More about Lauren Hirsch

 

[wabbott]

https://www.msn.com/en-us/entertain...to-steal-nba-rights-away-from-tnt/ar-AA1nSQhp

NBC Prepares Roughly $2.5 Billion a Year Offer to Steal NBA Rights Away From TNT
League is in advanced stages of a new round of media-rights deals; Disney’s payments would increase under proposed deal

By Joe Flint, Amol Sharma and Isabella Simonetti
April 29, 2024 - 5:55 pm EDT

Comcast’s NBCUniversal is prepared to pay an average of about $2.5 billion a year to air a package of National Basketball Association games, as rival Warner Bros. Discovery makes last-ditch efforts to keep those rights, say people familiar with the situation.

Warner’s TNT is one of the league’s oldest TV partners and has paid an average fee of $1.2 billion under its current deal. Warner was unable to reach a new pact with the NBA before an exclusive negotiating window expired last week, which allowed NBC to make a bid.

The package NBCUniversal is bidding on would include playoff and regular season games that would appear on the NBC network, as well as its Peacock streaming service. NBC has discussed carrying two prime-time games per week, something Warner can’t offer because it does not own a broadcast network.

Sports rights are coveted assets for both traditional media companies fighting to keep cable subscribers and streamers trying to attract and retain customers. The league’s discussions with partners for the new round of media-rights deals—which would kick in after the 2024-2025 season and last about a decade—are in the advanced stages.

Disney, the parent of ESPN and ABC, is the other major TV partner and is expected to pay an average per-year fee of about $2.6 billion to renew its deal, the people familiar with the situation said, up from about $1.5 billion per year now.

Each TV partner would air fewer games under their new deals than under the current pacts. The league took some games away from its TV partners during this year’s rights negotiations in order to create a new package for a streaming partner. Amazon’s Prime Video has already reached the outlines of a streaming rights deal with the NBA.

The league’s negotiations with its streaming and TV partners are fluid, and the parties are still haggling over who gets rights to air the most high-profile games and series. Amazon is likely to get a share of the Conference Finals alongside the other partners, and Disney’s ABC is on track to retain the rights to the NBA Finals, some of the people said.

Warner’s TNT has the ability to try to match rival offers, people familiar with its pact said.

For Warner, the loss of the NBA would be a blow to the strength of its TNT cable network at a time when it is already being hurt by cord-cutting and a shrinking advertising marketplace. TNT still has a heavy roster of sports including the NCAA March Madness college basketball tournament, the NHL and Nascar, but without the NBA, Warner could have a harder time charging distributors as much for carriage of its channels.

Warner Chief Executive David Zaslav has emphasized cost savings and had indicated on calls with analysts that while securing NBA rights is important, the company would be disciplined in its approach to a new deal.

If Warner loses NBA rights, that would injure the planned sports-streaming venture the company is launching alongside Disney and Fox. Carrying NBA games was to be one of its key selling points.

Write to Joe Flint at Joe.Flint@wsj.com, Amol Sharma at Amol.Sharma@wsj.com and Isabella Simonetti at isabella.simonetti@wsj.com

 

[wabbott]

https://www.hollywoodreporter.com/b...le-skydance-charter-carriage-deal-1235885769/

Paramount’s New “Office of the CEO” Has a Big First Task: Not Letting CBS Go Dark With Charter

The details matter on the potential deal with the cable company, as the new pact could affect the value of Paramount and therefore its takeover price target.

by Georg Szalai
April 29, 2024 - 2:05pm PDT

As a buyer group led by David Ellison’s Skydance Media aims to iron out a potential deal to take over Paramount Global, many eyes on Wall Street are also watching carriage talks between the entertainment conglomerate and cable giant Charter Communications. On April 30, that deal expires.

Last year, Charter played hardball with Disney in a negotiating showdown that led to a brief blackout last fall before the companies struck a broad carriage deal covering traditional pay TV networks and streaming services, which finance experts called a blueprint for future sector agreements and a potential “tipping point” in the relationship between content and distribution giants.

Depending if, when, how, and what Charter and Paramount agree on in a new pact could affect the value of Paramount and therefore its takeover price target and its strategic positioning for the future. It’s no surprise then that industry observers have their eyes and ears peeled for signs of how it will play out.

Chris McCarthy, George Cheeks and Brian Robbins are now in charge, making up an “Office of the CEO” and running Paramount on a day-to-day basis for now. So all eyes and ears are also on them.

“Charter took a hard stance against Disney in September despite adverse timing (during the beginning of NFL/CFB seasons) despite that ESPN had yet to double-dip,” Wolfe Research analyst Peter Supino highlighted in a recent report. “Neither of these factors will benefit Paramount, whose streaming service can be purchased at a cheaper rate (with all its marquee sports) than Charter currently pays for its portfolio of network.”

LightShed Partners analysts Richard Greenfield, Brandon Ross and Mark Kelley had already warned in March of potentially rough seas in the Paramount-Charter and other carriage talks.

“While we doubt Paramount ends up being dropped, we expect very challenging renewals as it has become far less important to distributors to carry Paramount, given how little content is exclusive to the legacy multichannel bundle,” the LightShed team argued. “And while Paramount+ may be included in any distributor renewal, it will likely lead to a significant reduction in what distributors pay for existing Paramount networks to prevent double paying for content.”

And given that Paramount has a vast array of cable channels tethered to the linear pay TV ecosystem that’s declining, negotiations could get tough. “Operators may balk at the price tag for MTV2 during the next round of carriage negotiations given the network is not seen as a must-have for subscribers in today’s world where consumers have a vast array of digital video options,” S&P Global Market Intelligence analyst Scott Robson wrote about Paramount in a report after the Disney-Charter deal was unveiled last year.

Paramount Global CEO Bob Bakish, whose exit from the company was made official Monday, “made plans to focus its attention on six ‘core brands’ in 2017, before the CBS and Viacom merger,” the analyst added. “Since then, the company has kept its niche networks on air, but that might be changing.”

 

[wabbott]

https://ca.movies.yahoo.com/sports/news/fox-disney-warner-tap-streaming-142000373.html

Fox, Disney, Warner Will Tap Streaming Sports Venture in TV Upfront
Brian Steinberg
Mon, April 29, 2024 at 9:20 a.m. CDT

The three media companies planning to launch a much-scrutinized sports streamer later this year are set to give advertisers a sneak peek at the new outlet.

Fox, Disney and Warner Bros. Discovery plan to use their new streaming joint-venture — the official name of the video hub has yet to be announced — to boost the impressions they have to sell to Madison Avenue during the industry’s annual “upfront” market, according to three people familiar with the matter. Each company will offer to use the audiences expected to watch the programs they contribute to the new business — and the national commercials that accompany them — to fill out advertiser schedules, these people say. The companies could also insert ads as needed in the feeds if need be, one of these people suggested.

Fox, Warner Bros. Discovery and Disney declined to provide comment on their plans. During the upfront, TV networks try to sell the bulk of their commercial inventory for their next cycle of programming.

While many aspects of the new service remain unknown, revelation of the aforementioned plans suggests that advertising will play a role. Many streaming services show significantly fewer commercials than their linear-TV counterparts, but the new streaming outlet is expected to offer access to networks including ESPN, TNT, ABC, Fox and Fox Sports 1, all of which rely on commercials as a significant pillar of their finances.

The price of the service is to be announced at a later date, but the companies will likely set a monthly subscription that is more than a consumer would pay for a standalone regional sports network, which costs $20 to $30 per month, and less than a larger digital programming package such as Hulu + Live TV or YouTube TV, which cost around $75 to $80 per month, according to a person familiar with discussions.

The new outlet is expected to launch in the fall as the NFL season gets underway.

The plans also hint at the growing reliance traditional media companies have on sports to generate the big audiences upon which TV advertisers still rely. To be sure, more ad plans use proprietary data and programmatic buying to align commercials with specific pockets of consumers — expectant mothers or first-time auto buyers, for example — but big marketers still like to reach broad swaths of potential customers all at once, which remains a more efficient practice. Live sports broadcasts are among the few TV properties that continue to do that.

Sports are likely to play a key role in this year’s upfront. One media-buying executive familiar with early discussions between advertisers and TV networks suggests media owners may use sports to offset some of the declines expected in other parts of the business. In other words, this executive says, TV companies may use impressions from sports audiences as a means to shore up ratings declines in primetime, daytime or late-night schedules.

One challenge, of course, is that the number of people who plan to subscribe to the new joint-venture streamer is, for now, unknown. The companies have suggested the sports outlet will appeal to a generation of customers who no longer subscribe to traditional cable, but will find the sheer number of sports hours offered a compelling prospect.
One of the goals of the new business is to generate some of the revenue Disney, Fox and Warner Bros, Discovery are, like their contemporaries, losing as one-time TV viewers gravitate more readily to streaming on demand. The hope is that the new sports streamer replaces some of the distribution revenue the companies are losing as one-time subscribers get their content elsewhere. As the upfront plans reveal, perhaps there is also room to bolster ad revenue too.

The three media companies have tapped Peter Distad, a former executive at Apple TV, to serve as the new venture’s CEO. While at Apple, he worked to expand usage of the Apple TV app and the Apple TV+ video service, as well as Apple’s distribution of games from Major League Soccer.

 

[Johtull12]

Breaking: Sony and Apollo Global make 26 billion cash offer for Paramount with Sony holding a majority stake in the venture.

 

[wabbott]

https://www.wsj.com/business/deals/...offer-for-paramount-ade26ca4?mod=hp_lead_pos1

Sony, Apollo Make $26 Billion All-Cash Offer for Paramount
Offer comes as exclusive negotiating window between Skydance and entertainment giant is about to expire

By Jessica Toonkel and Miriam Gottfried
May 2, 2024 1:31 pm EDT

Pictures and private-equity giant Apollo Global Management have submitted an all-cash $26 billion offer for Paramount Global PARA, marking the second time the private-equity firm has come in with a bid for the entertainment giant.

Apollo and Sony on Wednesday submitted the offer letter, which was signed by Sony Pictures CEO Tony Vinciquerra and Aaron Sobel, a partner at Apollo, according to people familiar with the situation. The offer is a starting point for discussions and is nonbinding.

 

[wabbott]

https://www.thewrap.com/sony-apollo-submit-joint-paramount-bid/

Paramount Shares Climb Over 13% on Report of $26 Billion Sony, Apollo Joint Offer
The all-cash bid comes as exclusive discussions with David Ellison’s Skydance Media are set to expire on Friday

by Lucas Manfredi
May 2, 2024 @ 11:22 AM PDT

Shares of Paramount Global surged over 13% during Thursday’s trading session after the Wall Street Journal reported that Sony Pictures Entertainment and Apollo Global Management have submitted a joint $26 billion all-cash offer for the media conglomerate.

The offer, which was sent in a letter signed by Sony Pictures CEO Tony Vinciquerra and private equity firm partner Aaron Sobel is a starting point and non-binding, the outlet noted. Under the new terms, Sony would reportedly be the significant majority shareholder with operational control, while Apollo would take a minority stake.

Apollo previously submitted a $26 billion all-cash offer on its own, which included $12 billion plus the assumption of debt, though that was reportedly rebuffed by Paramount due to concerns around financing.

Paramount declined to comment. Representatives for Sony and Apollo did not immediately return TheWrap’s request for comment.

The move comes as exclusive discussions between Paramount and Skydance Media’s David Ellison are set to expire on Friday. It’s unclear if that exclusivity window will be extended.

The two-step deal would see Skydance acquire the company through controlling shareholder Redstone’s stake in National Amusements, which owns 77% of Paramount voting stock. The second step would see Skydance and Paramount merge to create a combined company valued at around $5 billion.

Under a newly revised offer, Skydance would include a $3 billion cash injection as well as premium sweetener for a percentage of non-voting Class B shares in an effort to assuage minority shareholders’ concerns, an individual familiar with the negotiations told TheWrap. Redstone, who is already set to get a premium for her shares, could take less cash and keep more equity in Paramount under one scenario being discussed. She is also open to giving non-voting, minority shareholders a say in whether any transaction gets approved.

Skydance’s revised offer comes after multiple Paramount shareholders — including Matrix Asset Advisors, Ariel Investments, Aspen Sky Trust and Blackwood Capital Management — have expressed opposition to the Skydance deal, arguing it prioritizes controlling shareholder Shari Redstone’s interests over the rest of Paramount’s non-voting, minority stockholders and would dilute the value of their holdings.

Ariel’s founder and chairman John Rogers Jr., whose firm had a 1.8% stake in Paramount as of the end of 2023, and GAMCO Investors Inc. chairman and CEO Mario Gabelli, whose funds own 5 million voting shares, have also both previously warned that they could pursue litigation if the Skydance deal or any other bid does not appropriately benefit their clients.

In addition, The Employees’ Retirement System of Rhode Island is seeking a court order from Delaware’s Court of Chancery to compel Paramount’s board and management to turn over all documents and communications related to its merger talks with Skydance. The pension fund is concerned that Redstone and National Amusements, which owns 77% of Paramount’s voting stock, have “usurped Paramount’s corporate opportunities” and are interfering with the board’s ability to find the best deal for shareholders.

Paramount, which has a market capitalization of $9.6 billion, is trading at $13.86 per share, above its 52-week low of $10.12 apiece hit last month. Shares are up 16% in the past six months, but down 39% in the past year.
Sony, which has a market capitalization of $103.7 billion, saw its shares rise 2% on Thursday. The stock, which is trading at $84.56 per share, is down 9% year-to-date and 7% in the past year.

Apollo, which has a market capitalization of $67.2 billion, saw its shares climb 4%. Its stock, which is trading at $112.06 per share, is up 31.7% in the past six months, 22.7% year-to-date and 82.9% in the past year.

Lucas Manfredi joined TheWrap in November 2022 after four years at Fox Business. He can be reached at lucas.manfredi@thewrap.com.

 

[RivShore]

I wonder if Sony would shut down P+?
They have been very successful just being arms dealers, so maybe they do that with all the Paramount stuff and generate a boatload of cash quickly while removing a D+ competitor from the marketplace.

 

[afan]

I wonder if Sony would shut down P+?
They have been very successful just being arms dealers, so maybe they do that with all the Paramount stuff and generate a boatload of cash quickly while removing a D+ competitor from the marketplace.

It's where CBS has all their stuff though so they'd need a next day streaming home. Not sure what that would be given Hulu has ABC and Peacock is NBC. It's not what Netflix has done but I suppose they could. I can't seem them partnering with Max.

 

[RivShore]

It's where CBS has all their stuff though so they'd need a next day streaming home. Not sure what that would be given Hulu has ABC and Peacock is NBC. It's not what Netflix has done but I suppose they could. I can't seem them partnering with Max.

True but maybe a combo with Hulu for next day could work. Bring Hulu back to it's early days when multiple networks had next day on it.

 

[fatmanatee]

I just really hope they wrap it up soon, this feels like this has been going on forever lol.

 

[wabbott]

What is interesting is what the market says the CBS-TV network is valued at, bag and baggage - NFL contracts, CBS News, prime-time programing - all of it, lock, stock and barrel. Not very much money.

So the question becomes what are the other TV networks - FOX, ABC, NBC - worth?

 

[wabbott]

https://www.barrons.com/articles/pa...stone-disney-streaming-media-tv-espn-fb529cc0

Paramount, the Final Season: It’s Scions Versus Shareholders
By Jack Hough
Updated May 03, 2024, 10:25 am EDT / Original May 03, 2024, 2:00 am EDT

Spoiler alert: The final season of Paramount! took a dramatic turn in this week’s episode. Bob Bakish is out as CEO. Replacing him is an executive trium-invertebrate: three managers chosen for their unlikeliness to stand up to Shari Redstone, who’s seeking to parlay her modest economic stake and total voting control into a cash-out favoring herself and...well, just herself.

Bakish had tried to find alternatives to Redstone’s Shari-the-wealth plan. He’s reportedly getting $50 million on the way out the door, on top of a $31 million haul last year, after presiding over losses for ordinary shareholders of 48% over the past year and 73% over the past five years. You know you’re watching a quality drama when you can’t quite tell who the good guys are.

I don’t want to give too much away, but a friend of a friend of one of the writers tells me that the next episode involves Paramount Global entering a high-stakes standoff with cable provider Charter Communications over terms of a television carriage deal. The old one just expired. Historically with these things, the network owner says, “We want x as a percentage increase,” and the cable company says, “We’ll only pay y,” so the network tells the viewing public that it might lose its favorite shows because of the cable company’s greed, and in the end, the cable company pays pretty close to x.

But last fall, when Walt Disney said, “We want x,” Charter said that it would rather exit the subscriber-losing television business and just do broadband than keep getting squeezed by carriage hikes. Disney, which needs cash flows from legacy TV to support its streaming services until they’re profitable, folded, and agreed to cut Charter in on selling its streaming services. That outcome is a best-case scenario for Paramount, which unlike Disney doesn’t have a thriving parks business on the side—it makes pretty much all of its money from legacy TV. A carriage cave-in could complicate Redstone’s deal for the company.

For those new to Paramount!, a quick recap: Season 1 introduced Sumner Redstone, son of a Boston linoleum peddler, who turned a family investment in a drive-in movie theater into a media empire valued at its peak at $80 billion. A tough negotiator, and frequent litigator, he brought Viacom and CBS together the first time, meddled well into his 80s, and spent his 90s incapacitated, with girlfriends fighting over his fortune. In Season 2, CBS CEO Leslie Moonves is ousted in 2018 after more than a dozen women publicly accuse him of sexual misconduct; Sumner dies two years later, and daughter Shari, who won control of the business, brings Viacom and CBS together the second time as Paramount Global, led by Bakish.

In the current Season 3, Paramount, now junk-rated by S&P, rebuffs an initial $26 billion cash offer from Apollo Global, including assumption of debt, and enters exclusive talks with relative Hollywood newcomer Skydance Media, backed by private equity and tech mogul Larry Ellison, and run by his son, David. Skydance initially proposed paying Redstone a lavish $2 billion for her supervoting shares, after which Paramount would buy Skydance for $4 billion to $5 billion. You don’t see that kind of scion-on-scion synergy every day. Regular shareholders cried foul, Paramount appointed a committee to review any deal for fairness, and Skydance reportedly added a $3 billion sweetener from one of its backers that would be infused into the new company to pay down debt. Also, Apollo on Thursday renewed its $26 offer, with Sony Group as a bidding partner, sending shares jumping.

How will it end? Is Apollo now the favorite? And just in case, does the trium-invertebrate have a business plan? The key challenge in TV today is balancing shrinking but profitable legacy assets with growing but loss-making streaming ones. But Paramount, as Morgan Stanley wrote this past week, is both “highly exposed to the declining linear TV profit pool and arguably subscale in streaming.”

Shares had fallen 7% on Tuesday after Paramount reported first-quarter financial results, including solid Super Bowl–boosted advertising revenue, and announced Bakish’s departure. It was only the fourth-worst earnings-day price decline of the past three years. A happy ending to the drama seems out of the question at this point, but maybe there’s still hope for a fair deal.

Let’s turn to basketball. I refuse to endure the heartache of rooting for the New York Knicks, but when they beat Philly and advanced past round one of the playoffs, I plan to briefly suspend my emotional detachment for a fist pump or two. The fact that the season opened before Halloween and will end in the middle of June adds to its value for TV networks and streamers. A bidding war has broken out for rights. Current turf holders include Disney, which owns ESPN, and Warner Bros. Discovery, with its TNT network. Key newcomers are Amazon.com and NBC owner Comcast.

Prices for new 10-year deals could double and then some from the last ones. For example, NBC is attempting to pay $2.5 billion a year on average for a package of games that Warner has been getting for $1.2 billion, according to BofA Securities. The result could be more rights holders with fewer games each. It’s unclear how streaming rights will be sold, and whether the NBA will prioritize reach or profits.

The biggest winner by far in the new rights deals will be the NBA. The biggest loser could be Warner. Best case, it will pay much more for something it’s already getting, which could cut into earnings. Worst case, it will sever TNT’s 40-year relationship with the NBA, which could hurt earnings and future talks with cable companies, not to mention Warner’s new sports streaming pact with Disney and Fox. Making out just fine will be TNT’s fan-favorite commentator, Charles Barkley. He’s two years into a 10-year, nine-figure deal, but can attract competing offers in free agency, thanks to an escape clause he insisted upon ahead of rights renewals. “I wanted to cover my ***,” he said this past week. If TNT is no longer covering it, Disney and others could line up for the privilege.

Write to Jack Hough at jack.hough@barrons.com. Follow him on X and subscribe to his Barron’s Streetwise podcast.

 

[clarker99]

What is interesting is what the market says the CBS-TV network is valued at, bag and baggage - NFL contracts, CBS News, prime-time programing - all of it, lock, stock and barrel. Not very much money.

So the question becomes what are the other TV networks - FOX, ABC, NBC - worth?

I don't know how valuations work but the linear assets are why anyone would even buy PARA.

PARA's suite of linear assets has generated ~$5B in OBITDA over the last 12months (24.5% margin). The ROI is easy to see. Studios are barely treading water and DTC is still a ways from getting out of the red.

DIS's suite of non-ESPN linear assets have generated ~4B in Operating Income over last 12 months (35% operating margin).

Still lots of money to be made off legacy media.

 

[wabbott]

https://www.hollywoodreporter.com/business/business-news/paramount-skydance-deal-off-1235889781/

Paramount Appears Set to Back Away From Skydance Deal, Leaving Uncertain Path Forward

The Shari Redstone-controlled entertainment company is also weighing an offer from Apollo and Sony, but regulatory concerns surround that deal.
By Kim Masters, Alex Weprin
May 3, 2024 - 12:28pm PDT

After weeks of negotiations, Skydance’s proposed merger with Paramount Global appears to be on the ropes.

Paramount’s special board committee appears to have cooled on the offer, which would have seen the David Ellison-led studio, joined by financial partners RedBird Capital and KKR, acquire controlling shareholder Shari Redstone’s stake in the company and then merge Skydance into Paramount, keeping it as a publicly-traded company, with new leadership at the helm.

Skydance had been in a 30-day exclusive negotiating window, and had proposed a revised offer last weekend that would have offered some sweeteners for Paramount common shareholders, some of whom had been vocally opposed to the deal. That window ends today, and is not likely to be extended.

Another source close to the deal says that talks between the sides continue.

Paramount has another offer on the table: A $26 billion all-cash deal from Apollo and Sony Pictures. It is not immediately clear what the status of that deal is, though it would carry substantially more regulatory concerns, due to Apollo’s existing ownership of broadcast TV stations, and Sony’s status as a Japanese company.

Redstone is said to be unenthusiastic about that deal.

The end of the Skydance talks capped off an eventful week for Paramount, with the company parting ways with its CEO Bob Bakish on Monday, replacing him with a trio of executives working in an “office of the CEO.”

While Bakish had largely declined to comment on the deal chatter, he told analysts on the company’s fourth-quarter earnings call that he was focused on creating value for all shareholders (emphasis his), suggesting that there was daylight between him and Redstone, and friction that could have led to his ouster.

Bakish’s departure followed the news that four board members would not be standing for reelection at the company’s next annual meeting, set for June 4. It was not immediately clear what sparked their decision, though there was speculation that it could be related to deal talks.

With the Skydance deal seemingly off, and the Apollo-Sony deal’s regulatory viability in question, Paramount may need to find its own path forward under its new leaders Brian Robbins, George Cheeks and Chris McCarthy.

“Going forward, we are finalizing a new long-term plan to best position this storied company to reach new and greater heights in our rapidly changing world,” the trio wrote to employees shortly after taking the helm of the company.

A source says that the executives are prepared to lead the company long-term, and confirmed that a formal strategic plan will be communicated to staff in the coming weeks.

Paramount shares are down about 5 percent for the day.

Spokespersons for Paramount, Skydance, Shari Redstone and the board special committee all declined to comment.

 

[wabbott]

https://finance.yahoo.com/news/bob-bakish-gets-258k-per-012229819.html

Bob Bakish Gets $258K Per Month Through October, Pro-Rated Bonus in Paramount Exit Package
by Lucas Manfredi
Fri, May 3, 2024, 8:22 PM CDT

Paramount has unveiled terms for Bob Bakish’s exit package after the chief executive resigned from his position earlier this week.

According to an SEC filing on Friday, Bakish will remain with the company as a senior advisor through Oct. 31 to assist with the transition. The end of his employment will be considered a “termination without cause.”

During the transition period, he will receive a monthly base salary of $258,333.33. He will also remain eligible to receive a pro-rated bonus for 2024 that will be calculated based on his service until his separation date and will continue to vest in all outstanding equity awards in accordance with their terms.

“During the Transition Period, the Parties acknowledge and agree that Executive’s level of services with the Company shall in no event decrease below 20% of the average level of services provided by Executive during the immediately preceding 36-month period,” the filing states.

Bakish will also remain entitled to enhanced separation benefits under the company’s Executive Change in Control Severance Protection Plan in the event that a change in control occurs within six months following his separate date provided that he agrees that his severance multiple will be 2.5 times and his benefit continuation period will be 30 months thereunder.

Per Paramount’s latest proxy statement, Bakish will receive an estimated severance package of $48.5 million under a non-qualifying change in control termination, which includes $6.2 million in continuation of salary and other cash compensation, $24.8 million in annual bonus continuation, $83,913 in continuion of medical, dental and life insurance, $25,000 in outplacement assistance and $17.38 million in total acceleration/continuity of equity awards.

In the event of a qualifying change of control termination, that package would be $64.03 million, per the proxy filing, including $9.3 million in continuation of salary and other cash compensation, $37.2 million in annual bonus continuation, $127,670 in continuation of medical, dental and life insurance, $25,000 in outplacement assistance and $17.38 million in total acceleration/continuity of equity awards.

Additionally he will be reimbursed up to $100,000 in documented attorneys’ fees incurred in connection with his departure from the company and the negotiation of the agreement within 20 days after Paramount’s receipt of written documentation of such fees and in all events on or prior to April 30, 2025.

Following Bakish’s resignation, Paramount established an Office of the CEO, which is in the process of putting together a long-term strategic plan for the company.

The Office of the CEO is comprised of CBS CEO and president George Cheeks, Showtime/MTV Entertainment Studios and Paramount Media Networks CEO and president Chris McCarthy and Paramount Pictures and Nickelodeon CEO and president Brian Robbins. According to Friday’s filing, the board has designated McCarthy as “interim principal executive officer.”

“It’s a really difficult, challenging time,” Cheeks said during a news briefing with CBS Entertainment president Amy Reisenbach this week. “You read articles every day. But I think what’s good about this team is that we all locked arms and said, ‘We can only control what we can control.’ What we can control is helping to develop great shows, hit shows and being number one. I’m blown away by this team every single day, especially right now when you have to deal with all that noise out there — by the way, not just with this company, but in the larger industry. It’s just amazing to me how well we’ve all aligned and come together and focused on what we do every day.”

Bakish’s exit terms come as the Paramount board’s independent special committee has informed Skydance Media that it will let the exclusivity window on merger talks expire ahead of a Friday evening deadline.

In addition to Skydance, Sony Pictures Entertainment and Apollo Global Management have submitted a non-binding, joint $26 billion all-cash offer for Paramount. That deal would see Sony take a majority stake and operational control, while Apollo would take a minority stake. However, such a deal would likely face scrutiny from regulators due to limitations surrounding foreign ownership.

Any deal must be approved by the committee. Last month, four members of the board — including three who were on the committee — said they would not seek reelection at Paramount’s June 4 annual meeting.

An individual familiar with Redstone’s thinking told TheWrap that she is open to finding a deal in the best interests of Paramount shareholders and supports the committee reviewing the Sony-Apollo bid.

Paramount shares, which closed at $12.88 per share on Friday, are up more than 2% in after-hours trading. The company has $14.6 billion in long-term debt and reported a market capitalization of $9.05 billion as of Friday’s close.

The post Bob Bakish Gets $258K Per Month Through October, Pro-Rated Bonus in Paramount Exit Package appeared first on TheWrap.

 

[wabbott]

https://www.hollywoodreporter.com/b...t-sells-paramount-stock-huge-loss-1235831979/

Warren Buffett Has Sold His Paramount Stock: “We Sold it All, and We Lost Quite a Bit of Money”

The famed investor was the largest shareholder in Paramount's non-voting stock and took a steep loss on the sale, adding that he made the decision to buy in the first place.

by Alex Weprin
May 4, 2024 - 2:24pm PDT

Warren Buffett‘s two-year dalliance with Paramount Global has come to an end.

The famed investor and Berkshire Hathaway CEO says that his company has exited its position in Paramount. Buffett disclosed the news during Berkshire’s annual meeting in Omaha, Nebraska, on Saturday.

“We sold it all, and we lost quite a bit of money, that happens in this business too,” Buffett told the crowd, adding that he was the one who decided to buy into the company in the first place (there had been speculation that one of Buffett’s deputies may have initiated the trade). “I did it all by myself, folks.”

Berkshire surprised Wall Street when it disclosed a $2.6 billion stake in Paramount in May 2022. Later that year, it added even more shares, ultimately becoming the largest shareholder in the company (or at least its non-voting shares, with Shari Redstone and the Redstone family’s National Amusements controlling a majority of its voting shares).

Since then, of course, Paramount has been on a stock downswing, as the exorbitant costs to compete in the streaming wars and a seemingly tepid M&A market, have put the company in a difficult financial position. Paramount also slashed its dividend last year so that it could invest in streaming.

In recent months the company has been embroiled in sale talks, with an exclusive negotiating window with a consortium led by David Ellison’s Skydance having just ended, and a new proposal from Apollo and Sony on the table. While the stock price had picked up slightly given the talks, it has been wobbly given the uncertainty over whether a deal would get done, and what would happen if it doesn’t.

The company also parted ways with its CEO, Bob Bakish, last week, replacing him with a trio of executives forming an “office of the CEO.”

At Berkshire’s shareholder meeting last year in Omaha, Buffett quipped that “it’s not good news when any company cuts its dividend dramatically,” and added comments that seemed skeptical of the streaming business.

“You’ve got a bunch of companies that don’t want to quit. Who knows what pricing does under that?” Buffett said.

At Saturday’s meeting, Buffett said that the experience taught him, at 93 years old, a lesson.

“Actually, owning Paramount made me think even deeper, but I certainly looked harder about the whole question of what people do with their leisure time and what the governing principles are of running an entertainment business of any sort, whether it’s sports or movies or whatever it might be,” Buffett said. “I think I’m smarter now than I was a couple years ago, but I also think I’m poorer because I acquired the knowledge in the manner I did.”

Berkshire disclosed in February that it began selling its stake in Paramount at the end of last year