What Happens if Paramount Isn’t Bought or Merged with Another Company?
There are multiple offers on the table for Paramount, but the company’s three-headed ‘Office of the CEO’ has a plan if all the deals fall through.
Paramount Global is entering its seventh month of merger and acquisition discussions, and whether or not there is an end in sight remains a bit cloudy. In December, news first broke that the company had begun initial discussions with Warner Bros. Discovery about a potential combination of the two media conglomerates. Those talks came to naught, but more seriously interested parties have emerged to evaluate Paramount’s assets in the meantime. Earlier this week, the special committee established by Paramount to evaluate M&A opportunities approved a bid by Skydance Media and its owner David Ellison, but one of the company’s major shareholder has publicly expressed its disapproval of the deal. With all of the confusion over the company’s future, Paramount executives have laid out a plan for the future as an independent company.
Key Details:
- The Paramount executives in its “Office of the CEO” revealed the company’s plans for going it alone at a shareholders meeting this week.
- A streaming joint venture is high on the company’s priorities list if it remains an independent company.
- The company will also seek $500 million in savings and could divest itself of some assets.
The Skydance merger had been the favorite offer of Paramount’s controlling shareholder Shari Redstone. But in its latest revision of the deal structure, Skydance reduced its valuation in order to provide more cash for other Paramount shareholders. Despite acquiescing to shareholder concerns, Aspen Sky Trust — a major Paramount stockholder — still believes that the deal undervalues shareholders while enriching Redstone at their expense.
Conversely, the move to spread the cash around has made Redstone view the deal less favorably, according to various reports. This week, the company’s three-member “Office of the CEO,” which handles chief executive duties for Paramount after Bob Bakish departed the company in late April, laid out the first details of its plan to keep Paramount a going concern as an independent company if Redstone decides to decline the Skydance deal and all other offers currently on the table.
Reports indicate that the Office of the CEO — comprised of CBS chief executive George Cheeks, Paramount Media Networks CEO Chris McCarthy, and Paramount Pictures chairman Brian Robbins — revealed its plans at the company’s annual shareholders meeting on Tuesday. One of the top priorities for Paramount if it decides to proceed on its own would be to become part of a streaming joint venture, and the company has already received interest from several potential partners in such a service.
“Let me be clear, we’re not talking about marketing bundles. This is a deep and expansive relationship,” Robbins said of the joint venture idea.
Paramount will also cut costs if it remains a standalone company, and will seek as much as $500 million in savings. That could mean divesting itself of some assets; the company has already tried to sell BET Media Group multiple times, and will shut down its kid-focused streaming service Noggin by July 2. It could also lead to more content cuts from Paramount+; the company executed one round of removals in summer 2023 as a way to reduce costs for the service.
Which Streamers Would Make Sense in a Paramount+ Joint Venture?
If Paramount were to merge its flagship streamer with another on-demand service as a joint venture, there are several possible candidates. The most logical option that stands out immediately is Peacock; the two general entertainment services have complimentary libraries, and each offers a livestream of a major broadcast network on its ad-free tier. A joint venture service that offered CBS and NBC as well as top franchises like “Yellowstone” and the other works of Taylor Sheridan, “The Office,” “Star Trek,” “Transformers,” “FBI” and so many others on top of all of the NFL football and other live sports rights held by the two companies would be a formidable product indeed. Paramount and Comcast have already had some discussions about a combination of their two streaming services in some form, but the terms negotiated by Bakish at the time were considered unfavorable by Redstone.
Another good candidate for a joint venture with Paramount+ would be Apple TV+, which has also discussed a streaming bundle with Paramount in the past. Apple is continuing to experiment with licensed content after years of refusing to add a meaningful selection of non-original titles to its streamer, and one of the biggest programming blind spots on Paramount+ is the comparative lack of prestige TV shows, which is what Apple TV+ does best.
Max would seemingly make another excellent partner for Paramount+. Like Apple TV+ its best programming segment is prestige TV, and it also carries live sports from TNT, TBS, and truTV in its Bleacher Report Sports Add-On, which would go well alongside Paramount+’s sports selection. But now that Warner Bros. Discovery is already joining the Venu Sports JV, and is planning to offer Max in a soft bundle with Disney+ and Hulu, the company may no longer have interest in seeking out new partners. Its contracts with Disney may also prevent the two companies from seeking out other bundle or streaming JV opportunities.
The fact that Paramount’s Office of the CEO is revealing these plans suggests that there is a real chance Redstone decides not to go for any of the M&A opportunities currently available. The future of Paramount is in a decided state of flux at the moment, and observers can only hope that more clarity is coming soon.
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.