Apollo reportedly makes $11-billion bid for Paramount film and TV studio
Private equity firm Apollo Global Management has offered to purchase Paramount Global's film and TV studio operations for $11 billion, according to people familiar with the matter who were not authorized to comment.
New York-based Apollo is the latest to make a play for Paramount, getting in line behind David Zaslav's Warner Bros. Discovery, Byron Allen's Allen Media Group and David Ellison's Skydance Media with help from private equity firm RedBird Capital.
Warner Bros. Discovery's pursuit of a deal with Paramount was short-lived, not progressing beyond preliminary high-level talks, while Allen Media Group and Skydance still appear to be interested.
A spokesperson for Paramount Global declined to comment. Apollo did not immediately respond to The Times' request for comment.
Read more:Paramount Global is for sale. Who's buying and how did we get here?
Entertainment companies have been circling Paramount Global — home of one of Hollywood's most storied movie studios, popular television network CBS and several other legacy brands and franchises — since at least last summer. The Wall Street Journal first reported the news of Apollo's bid on Wednesday.
Shari Redstone, who controls Paramount through her family's holding company, National Amusements Inc., has been shopping the entertainment empire around as it has struggled due to questionable management decisions, underinvestment, a plummeting stock price, the COVID-19 pandemic and last year's twin Hollywood strikes.
The company has been hobbled by its reliance on traditional cable television networks, whose viewership has declined significantly due to cord-cutting and diminishing ratings for non-NFL programming. Along with other legacy media giants, it has struggled to compete in the streaming business against Netflix, despite making substantial investments in content for its Paramount+ platform.
Paramount's stock is down more than 40% from a year ago.
The sale of the Melrose Avenue studio would prompt a breakup of the media company that Redstone stitched back together in December 2019. Such key assets as CBS and cable channels, including BET, Paramount and Nickelodeon, would be shunted aside.
Read more:Her father once dismissed her as a lightweight. Now Shari Redstone will run the show at ViacomCBS
Currently, Paramount’s television studio is housed within the CBS division. The TV studio produces 70 programs for broadcast network, cable television and streaming platforms, including the company’s Paramount+, which Chief Executive Bob Bakish has championed as the future. The company has lost many millions of dollars on its streaming efforts.
If Apollo succeeds in its bid for just the studios, that could spell the end for Paramount+.
Following the Apollo development, Paramount Global shares climbed about 12%, to $12.51. Axios and Bloomberg had previously reported that Apollo was interested in vying for Paramount.
A spokesperson for National Amusements declined to comment.
During last month’s earnings call, Paramount Global boasted that Paramount+ had 67.5 million subscribers by the end of 2023, with more than 4 million net additions in the October-through-December quarter. But the company missed revenue projections, prompting the stock to fall.
Read more:Viacom's Paramount Pictures suffers $136-million operating loss
Fourth-quarter revenue was down 6%, to $7.63 billion. The television division, which has been struggling amid a soft advertising market, saw its revenue decline 12%, to $5.16 billion. Film studio revenue fell more than 30%, to $647 million. The company laid off about 800 workers earlier this year.
The historic studio, with its famed arched gates, sits on lucrative real estate in an area of Hollywood that has seen much redevelopment over the last decade.
In February, Allen submitted a $14.3-billion bid for all of Paramount Global's outstanding shares. If the deal goes through, his company also would absorb nearly $15 billion in Paramount debt. The comedian turned media mogul has made efforts in the past to acquire Paramount assets, including BET and VH1, that never came to pass. Analysts have been split on whether Allen's pitch is a viable option for Paramount.
Skydance Media separately has been working since last summer on a deal to buy the Redstone family's National Amusements, which holds 77% of the voting shares of Paramount. The status of Ellison's bid, which has proceeded to the due-diligence phase, remains unclear, sources familiar with the effort have said.
This story originally appeared in Los Angeles Times.
