Paramount Global, the media conglomerate that owns CBS and MTV, is in a precarious position as two potential suitors have made offers for the company. The special committee of Paramount's board has been evaluating both Skydance Media-RedBird Capital Partners and Sony Pictures Entertainment-Apollo Global Management proposals. However, insiders suggest that neither deal may come to fruition.
Skydance Media, led by tech scion David Ellison, had a 30-day exclusive negotiating window with Paramount Global which expired without an agreement. The company was reportedly planning to acquire Paramount for an undisclosed sum with the help of investment firms RedBird Capital and KKR. However, the deal faced opposition from Paramount shareholders who believed it would benefit nonexecutive chairwoman Shari Redstone at their expense.
The investor uprising caused a significant drop in Paramount shares and led to several directors stepping down. Bob Bakish, the CEO of Paramount Global, was terminated due to his opposition to the Skydance deal. Instead, he preferred a partnership with Apollo Global Management and Sony Pictures Entertainment.
Apollo's $26 billion all-cash offer for Paramount Global includes the assumption of debt. However, since Sony Corp., which is behind Sony Pictures Entertainment, is based in Tokyo, Apollo would likely have to assume control of Paramount's CBS network to comply with FCC rules on foreign ownership.
If no deal is reached with Skydance or Sony-Apollo, Paramount will move forward with its leadership trifecta of Brian Robbins, George Cheeks, and Chris McCarthy in an 'Office of the CEO' capacity. The company may also revisit mergers and acquisitions discussions later this year or in 2025 after the regulatory landscape becomes clearer following the 2024 presidential election.