Sony, Apollo Plan to Keep Paramount Movie Studio and IP, but Auction Off Paramount+, CBS, MTV, Linear Networks
Paramount’s controlling shareholder Shari Redstone preferred to keep the company together in a sale, but that outcome appears less and less likely.
The sale of a company as large as Paramount Global is a highly involved process. The company’s primary shareholder Shari Redstone’s haste to do business with David Ellison and Skydance Media led to an exclusive negotiating period regarding a merger, but on May 3 that window ended without a deal. Now, Paramount executives have moved on to considering a $26 billion offer from Sony and their private equity partner Apollo Global Management. There has been a significant amount of talk regarding the regulatory issues that would face Sony and Apollo in their attempt to get control of Paramount, but new details surfacing this week indicate many of those concerns will be made irrelevant, as Sony and Apollo plan to sell off assets that would otherwise potentially run them afoul with government officials.
Key Details:
- Sony would keep Paramount’s movie studio, but sell off assets such as its cable channels as well as Paramount+.
- Rights to Paramount’s top brands would revert to Sony as part of the deal instead of being sold.
- The Paramount/Sony studio would aim to continue putting out at least 20 movies per year.
The New York Times has new details about Sony and Apollo’s plan for Paramount if they are successful in acquiring the company. The plan would be for Sony and Apollo to form a joint venture with Sony as the controlling partner, and an option for Apollo to sell its minority stake in the future.
Sony would keep the Paramount Pictures movie studio, folding it into its own movie-making operations. Paramount’s other assets, including its streamer Paramount+ and its broadcast and cable networks including CBS, Nickelodeon, MTV, and Paramount Network would be auctioned off to the highest bidder.
In addition, Deadline reports that anxieties have already arisen in Hollywood circles regarding the deal. The fear is that the theatrical film industry, still trying to climb back to pre-COVID levels of success, would see yet another decline in the number of annual releases if two major studios merged into one. But sources tell Deadline that the plan would be to continue releasing around 20 movies per year, instead of scaling back releases to try and put out more streaming content instead.
Why Would Sony Try to Sell Paramount+, Linear Channels?
Federal regulations could compel the sale of CBS if Sony and Apollo execute a purchase of Paramount. As a Japanese company, Sony is not allowed to own an American broadcast TV channel, and Apollo’s status as majority owner of Cox Media Group and its attendant TV stations could also cause concern with government rules about how much audience reach one station owner is allowed to have.
On the content side of things, the Times reports that Sony’s plan would entail keeping popular intellectual property (IP) from Paramount like “SpongeBob SquarePants” and “Teenage Mutant Ninja Turtles.” That would give Sony a wide range of new franchises to weaponize as part of its content arms-dealing strategy, though it could make Paramount+, in particular, a bit harder to sell. However, streaming has never been a part of Sony’s strategy in the United States, and the paper of record reports that that is unlikely to change with an acquisition of Paramount.
Warner Bros. Discovery and Comcast both make sense as potential buyers for Paramount+, though their interest in the service could hinge on getting some of Paramount’s IP as part of the deal. WBD could also be a logical home for CBS, as the company does not currently own a major broadcast network. Alternatively, CBS could be sold off station by station to groups like Nexstar or TEGNA.
There’s still quite a ways to go for Paramount and Sony before they can close a deal. Neither side has signed formal nondisclosure agreements, much less gotten a look at each other’s books, and that process could take weeks. There’s no guarantee the process will go further than it already has, but if Sony and Apollo do get control of Paramount, it will almost certainly ead to seismic shifts in the current Hollywood status quo.
Paramount Plus
Paramount+ is a subscription video streaming service that includes on-demand access to 40,000+ TV show episodes from BET, CBS, Comedy Central, MTV, Nickelodeon, Nick Jr. and more. The lineup includes “1883,” “Tulsa King,” “Star Trek: Discovery,” Nickelodeon’s “SpongeBob SquarePants,” and “PAW Patrol.” Subscribers can watch the NFL, college football, The Masters, college basketball, UEFA Champions League, UEFA Europa, Serie A, and NWSL. The service also offers the option to watch your live CBS affiliate. The upgraded ad-free package includes premium movies and shows from Showtime.