Well that was brief but exciting. Bob Bakish “stepped down” right before the Paramount earnings call started on Monday.
Like the tombstone says, I had looked for this but not so soon. I actually no, I had looked for this and been surprised I hadn’t seen it long before now. Under his “leadership” Paramount has fallen to the bottom of the Hollywood ladder. It has assets but no real ability to make use of them now.
Like every other studio that gambled on its own streaming service Paramount+ came up snake eyes. Streaming was Plan A and there was no Plan B. Paramount+ started life as CBS All-Access. It really wasn’t bringing anything to the party that wasn’t already there. The flagship show was the utterly disastrous Star Trek: Discovery. The executive team just plain sucks. Paramount has IPs that are potentially worth more than the company at this point but they have been absolutely squandered in the most Disneyesque ways imaginable.
Getting back to the earnings call, Paramount took no questions after the call. They didn’t even post the freaking slides. If you want the details you have to pull the SEC submission, and I’m not kidding.
They are hiding this thing. It was less than seven minutes long.
Granted there were a lot questions that they probably couldn’t answer and it would be hard to say which was more urgent. The two biggest were Comcast and Skydance.
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Paramount’s contract with Comcast expires on Wednesday and they still don’t have a new cable deal. Mickey the Great and Terrible tried fighting with cable earlier this year and ended up getting bent over the log-ride. Paramount doesn’t have anywhere near the leverage that Disney does. What ever Paramount is forced to sign its going to be painful.
Second, but more important is the Skydance buyout. There is now a challenger waiting for the exclusivity window to close, which is this Friday. Apollo Global Management is offering a $26 billion buyout package and they are acting on behalf of Sony.
Skydance is only offering $2 billion.
Naturally the stockholders would like the bigger offer. However, what they want doesn’t matter, here’s why.
Paramount has two kinds of stock, A class and B class. Class A shares have voting rights and Class B have none. If you have the B shares you have risk and no vote.
77% of the Class A shares are owned by Shari Redstone and Skydance is offering to pay her the $2 billion. Which is an all cash deal by the way, because David Ellison is Larry Ellison’s son and he literally has billions to burn.
What makes this tricky is that while Paramount is publicly held, Skydance is private. The current plan is for Paramount/Skydance to be public. Which raises the question of how this will work when it comes to the A and B shares. This is one of the questions that were avoided on the earnings call.
Shari Redstone’s attitude is probably a bird in the hand is worth two in the bush. The government will have to approve a Sony merger and at the moment that doesn’t look likely without at least a year’s worth of needlework. Assuming it goes through at all and right now the regulatory agencies are making a lot of noises about how they wish they hadn’t approved those big mergers from a few years ago. Besides, all cash is all cash.
Paramount doesn’t exactly have a CEO at the moment, it’s more of a triumvirate called the office of the CEO. Brian Roberts CEO of Paramount Pictures and Nickelodeon, George Cheeks CEO of CBS and Chris McCarthy the CEO of Paramount’s various cable enterprises.
Indicating they are really trying to push through the merger so David Ellison can take the reins as CEO.
The biggest treasure at Paramount isn’t the moribund IPs. It is CBS’s Sports contracts. Right now the Tiffany Network owns half of the NFL’s broadcasting rights. That is the real prize here, the rest is just trinkets compared to that. Unlike Disney, Larry Ellison has enough mega-bucks to hang on to his son’s sports contracts.
Skydance is getting into the sports business.
What are your thoughts on this move? Leave us a comment!
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