Sony has signed an NDA with Paramount Global, a move that will give it access to the books and allow deal talks to move ahead, Deadline hears.
Sony and private equity giant Apollo kicked things off previously with a preliminary bid of $26 billion, but what’s being contemplated now is not that, but something narrower. A look at the books is necessary to move forward in any case.
The non-disclosure agreement comes two weeks after a Paramount’s month-long exclusive negotiating window with David Ellison’s Skydance ended with no deal but the indie studio still hanging in, still interested.
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After a few weeks passed with no Sony NDA, there’s was speculation its interest was waning as it considered the significant regulatory hurdles, and that’s possibly what’s at play in looking for a different kind of deal.
Sony just wants the studio. Some industry players believe Apollo mostly wants the studio lot as a real estate play. Paramount Global’s CBS broadcast assets might need to be sold off. Sony might not be able to own them under foreign ownership regulations, and may not want to. As things stand, Apollo’s current station holdings would put it over the Congressionally mandated broadcast cap.
Hollywood values the lot and is backing Ellison, although some question the circa $5 billion valuation put on the company as part of a proposed two-step deal. Skydance said its latest capital raise in the fall of 2022 valued it at over $4 billion. A merger of two studios envisioned in a Sony deal is, of course, unpopular with the town that saw downsizing when Disney acquired 20th Century Fox. Combining another two studios also poses a regulatory risk.
Paramount Global shareholders, on the other side, kind of hate the Skydance deal since it leaves the company public with the bulk of proceeds going to Redstone to acquire her controlling stake. Ellison, backed by Larry Ellison and Gerry Cardinale’s RedBird Capital, sweetened the pot once offering to buy out some shares from common shareholders. It did not appease them and its not sure anything would. It’s also not clear if they have a case to sue as they’ve been threatening legal action from day one. The Skydance deal would keep the company together at least at first and inject fresh capital into highly indebted company. Jeff Shell would step in to run things under David Ellison.
Shareholders loved the Sony-Apollo $26 billion cash offer. It will be interesting to see what they think with that no longer on the table.
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Don’t sell! CBS is a studio first, network second, as demonstrated by it besting everyone, including Netflix (350 billion), by a wide margin of 456 billion minutes streamed every 35 days. Middling shows like S.W.A.T become top hits when licenced to Netflix.
My advice is kill Paramount + ASAP & strike a deal with Amazon or Netflix for all current CBS content & become the ultimate arms dealer. These streamers could use a news division giving CBS a wider, younger audience. With MTV Netwotks slowly dying Redstine always knew the value was in CBS and forced the merger.
Paramount Global doesn’t need to cancel anything! Shows like Drag Race and Mayor of Kingstown should grace cable which, in a new form, with YouTube, Hulu and Sling, is holding steady. This content can all be licenced out, too,to popular streamers instead of Paramount which no one watches. CBS Sports could take over POP on the dial and partner with Peacock, too.
All that’s left is to make amazing films, pay down debt and watch stock price rise. This would allow shareholders to sell at a point where real money can be made. Risky, maybe, but Buffet should have insisted on these changes by buying more stock, cheap. Lastly, hire Time Warner Dick Parsons to run this company old school with a great licensing team beside syndication
White Knight ?
Sony focus on PlayStation you laid off people now you’re doing this disgusting I bet Crunchyroll is next! Stop wasting money and take care of employees.
Hollywood is downsizing get used to it, employees are expendable.
These greedy fools
have destroyed studios that have stood for 130 years
and broadcast networks that have stood for a century.
Not understanding their own product. Living and dying by quarterly profits and stock prices instead of having a long range vision and love of their work.
History will not be kind to Zaslav, Iger, Redstone, Murdoch and their rotten ilk. Corrupt Robber Barrons.
They lost control of the studios when they started selling stock, when Walt Disney died in 1966 the Disney family only controlled 20% of the company. It’s a fact of life, Wall Street OWNS the studios, along with smaller stockholders, and they want profits results, if they don’t get it they will change CEO’s. Gen Alpha Gen Z could careless they would rather watch a TikTok video on a 5 inch smartphone than go into a theater and watch a 2 hour movie. Times are changing and “old” Hollywood better wise up. The land those studios are sitting on is more valuable than a bunch of soundstages and office buildings.
They were paid by the investment class to push extreme boomer politics and it completely turned the youth against them.
This is TERRIBLE news for this industry. Not only will jobs be lost at Sony or Paramount but thousands of jobs will be lost in Movie Theaters across the USA as well as the world. This industry is going to suffer by this deal and will be the end of many businesses because of it.
Not because of this deal, the industry is changing, employees better get used to it, less product will be produced, this started long before Paramount Sony, it started last year. Both offers want that land, anytime you get a hedge fund involved you will find this either Sony Apollo, or Skydance which is nothing more than big tech and another hedge fund. Too many U.S. screens, too many studios, too many employees in an industry that is shrinking.