All Deals Are Off For Paramount: Now What?

 Can Paramount Global recover from the PR disaster which has been its M&A attempts this year to return as a thriving, competitive entity? On the bombshell news that Shari Redstone, CEO of Paramount’s controlling National Amusements, Inc. torpedoed the SkyDance Media offer that looked like a done deal, Paramount itself is left in a very unenviable position. Brandon Blake, an entertainment lawyer with Blake & Wang P.A., surveys where the group now stands.

 


Brandon Blake

A Cancellation Not Well Received

From Paramount’s tanking share price, which reached its lowest point in five years off the back of the news, to the frantic rounds of insult-trading and lawyering up we have seen, one thing is clear— the rest of Paramount’s stakeholders aren’t happy.

 

Not helping that overall atmosphere are the reports that Redstone jettisoned the deal from a combination of her personal offer waning as SkyDance sought to court non-voting shareholders and a general annoyance at the press (and everyone else) for thinking the deal was done. Not to mention rumors that part of the decision came from SkyDance not protecting her against potential lawsuits from those disgruntled shareholders.

 

In truth, the fact that a vote between minor and major shareholders didn’t come to fruition may well have a big hand in that, but let’s be honest—the optics of all of that are simply not good and should have been far more carefully considered.

Resurrecting a Legacy

So where to from here for Paramount? While the Sony/Apollo deal (and possibly Byron Allen’s often-forgotten offer) may still work out in some way, especially if the Paramount Group looks to jettison some of its assets, this perceived petulance is unlikely to make many other companies come out the woodwork with a deal for National Amusements itself.

 

Those actively working within Paramount seem to feel the company has what’s needed to recover from its unenviable position. Conversations around BET and Showtime, as well as Pluto TV, are likely to occupy the void the Paramount deal has left. Plus, reportedly, Redstone has given Paramount an 18-month deadline to “right the ship” and return it to a competitive entity.

For now, it seems the best path forward for Paramount is cost cuts and restructuring, finding a partner, and selling off some of its assets to serve its $12B in debt. It will be fascinating to see what comes of it all.

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