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Paramount ‘location, location, location’

May 1, 2024

The Paramount logo is a mountain with a coronet of stars. Its sale still has a mountain to climb and the final outcome – pre-deal or post – is likely to be the current contenders, and others, picking and choosing between those star divisions of the business.

When the movie (low budget straight to streaming) is written the opening scene is guaranteed to be that ‘casual’ pre-Christmas 2023 meal in New York between Bob Bakish, then Paramount CEO and David Zaslav, CEO of WBD and deal-fancier extraordinaire.

Casual, my foot. Given the vibe around Paramount for some years now, such a lunch was akin to taking an ad in the NY Times saying ‘come get us!’ Now that Bakish has been ousted, one wonders if his timing was not entirely to the liking of Shari Redstone, whose National Amusements comany controls the fate of the business.

Of the many tipped to line up for the buy, most didn’t show. And so Skydance, the mid-level media conglomerate and producer (mainly with Paramount), controlled by David Ellison, son of Oracle founder, became lead bidder with $11 billion (plus taking on Paramount debt of a similar sum).

It is typically ironic that Bakish should be offed just as the latest figures begin to make that offer look a little stingy. But fear not, new players emerge: a combined bid from Sony and the Apollo investment company. Apollo had already had a bid just for the studio rejected.

Sony, very wisely given its track record running tv channels, has stayed out of the streaming business, preferring to sell content to the streamers. After years in retreat – it is stuck in low margin low growth consumer electronics – Sony seems to want to lean in again to its media and music assets. But, basically, it’s very valuable tail – PlayStation – continues to wag the dog; when PS5 sales disappointed the market recently $10 billion was wiped off the stock.

Whoever wins out, it is likely the price will climb. It is still more than possible that some of the other touted bidders will come in. Paramount may be a bit of rag bag of tepid (as opposed to ‘hot’) assets, but it is likely the last big bag to become available. Shari Redstone owns the worst house on the most desirable street and, as the realtors say: ‘location, location, location.’

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