Shari Redstone, who helped build Paramount Global into a media empire, may see her family’s company broken up if Sony Pictures Entertainment and Apollo Global Management acquire it. The plan would involve auctioning off assets such as CBS, MTV, Paramount Plus, and merging Paramount Pictures with Sony’s business. While Sony and Apollo intend to retain Paramount’s film library and rights to iconic characters, they have not yet shared this plan with Paramount or its advisers. This potential breakup would mark a significant shift in ownership for CBS and Paramount, which have been under Redstone family control for decades.
Sony and Apollo are discussing next steps with Paramount’s financial advisers following their $26 billion expression of interest in acquiring the company. The potential plan involves operating Paramount as a joint venture with Sony in control and Apollo holding a minority stake. Sony would likely combine Paramount’s movie studio marketing and distribution functions with its own operations, while selling off other properties. Apollo may eventually sell its stake in the joint venture back to Sony or another buyer, with the company expected to invest billions in the deal.
Redstone is reportedly not keen on a breakup of Paramount and would prefer the company to be acquired intact, although she may consider a compelling offer. Other potential suitors, such as Skydance, have expressed interest in Paramount, but exclusive negotiations between the two companies recently lapsed. A deal with Sony would likely result in a shift in strategy for Paramount, as Sony typically licenses its content to streaming services rather than operating its own platform. Sony has expressed interest in Paramount’s movie studio in the past, prompting the current joint bid with Apollo.
A deal between Sony and Paramount would face regulatory hurdles, particularly regarding foreign ownership restrictions related to U.S. broadcast licenses. Sony, being owned by a Japanese-based group, may need to divest CBS-affiliated TV stations or have Apollo apply for the license. The transaction would also require approval from the Committee on Foreign Investment in the United States, which reviews foreign acquisitions. Sony and Apollo believe there could be several potential buyers for Paramount assets once they decide to sell them, with Warner Bros. Discovery and TV station groups like Nexstar and Tegna among the logical candidates.
In conclusion, the potential acquisition of Paramount by Sony and Apollo could result in a major overhaul of the entertainment industry landscape. Redstone’s vision for the company may contrast with the proposed breakup plan, and other suitors are still in the mix. Sony’s licensing strategy differs from Paramount’s current approach, and regulatory challenges would need to be addressed for the deal to proceed. Despite these obstacles, Sony and Apollo are considering various strategies for the future of Paramount’s assets, with the goal of unlocking value and finding suitable buyers for different divisions of the company.
