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Thursday, July 25, 2024

National Amusements Contemplates Selling Controlling Stake: Paramount, CBS, MTV at Stake

Media mogul Shari Redstone is reportedly in talks to sell a controlling stake in National Amusements, the parent company of an extensive news and entertainment empire that includes the Paramount movie studio, CBS, and MTV. According to sources familiar with the discussions, National Amusements has engaged in talks with Skydance, a media and entertainment company founded by David Ellison, son of Oracle’s billionaire founder, Larry Ellison. While the outcome of the discussions remains uncertain, the potential deal could mark the beginning of a significant restructuring of the media industry in the coming year.

National Amusements, under the ownership of Shari Redstone, has been exploring strategic options as the traditional media industry faces challenges and broader headwinds. National Amusements has been a major player in the media landscape, and any deal involving Paramount, CBS, and MTV could have far-reaching implications for the industry. The talks with Skydance come at a time when Comcast, the TV and cable giant that owns NBCUniversal, is reportedly seeking deals, and Warner Bros. Discovery, the owner of HBO and CNN, is expected to come on the market next year.

Shari Redstone, who recently fought a battle to retain control of the company, is now reportedly considering relinquishing it. Economic pressures, including long-term debt obligations and an unpredictable advertising market for media companies like Paramount, have prompted Redstone to explore options. National Amusements filed for Chapter 11 bankruptcy in September with nearly $900 million in debt.

The potential deal involving Paramount could have broader implications for the media industry. Paramount, with its movie studio, CBS broadcast network, and cable channels, has long been considered an attractive acquisition target. The talks with technology firms earlier this year, including Amazon, Apple, and Netflix, indicated Redstone’s interest in exploring various possibilities for National Amusements.

The media industry is undergoing a transformative period with the slow decline of traditional television. Cable TV companies, once buoyed by rising payments from cable distributors, are grappling with a collapsing business model as consumers shift to streaming services like Netflix. Even streaming, initially seen as a savior for the media business, is facing challenges as traditional TV companies invest billions in building streaming services to compete with Netflix but struggle to replicate cable TV profits.

Shari Redstone is reportedly being advised by BDT & MSD Partners, a merchant bank founded by Byron Trott, a former Goldman Sachs partner known for advising wealthy family business owners. In February, BDT & MSD Partners announced a $125 million stake in National Amusements to help the parent company address its loan obligations.

National Amusements, under Shari Redstone’s control, holds a controlling stake in Paramount, with about 77.4 percent of Paramount’s voting class A common stock owned directly or indirectly by National Amusements. If a deal with Skydance materializes, it could signify a significant shift in ownership for Paramount, a company that has been part of the Redstone family for decades.

Skydance, founded in 2010 by David Ellison, has become a prominent independent studio in Hollywood, with a strong partnership with Paramount. The studio, backed by RedBird Capital Partners, has produced successful films like “Top Gun: Maverick” and “Mission: Impossible — Dead Reckoning.” RedBird Capital Partners is an active private equity firm in the media industry, also supporting ventures like RedBird IMI led by former CNN chief Jeff Zucker, pursuing a deal for British newspapers The Telegraph and The Spectator.

The potential sale of Paramount and the broader media industry’s deal-making activities underscore the dynamic landscape of media companies adapting to changing consumer behaviors and technological shifts. As traditional media players explore partnerships, acquisitions, and strategic shifts, the industry is witnessing a wave of transformation and repositioning to navigate the evolving media landscape.

David Faber
David Faber
I am a Business Journalist of The National Era
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