Shari Redstone plans to sell her stake in Paramount’s parent company

Shari Redstone plans to sell her stake in Paramount’s parent company

Media mogul Shari Redstone is in talks to sell a majority stake in National Amusements, the parent company of the sprawling news and entertainment empire that includes movie studio Paramount, CBS and MTV, according to three people familiar with the talks.

In recent weeks, National Amusements has held talks with Skydance, the media and entertainment company founded by David Ellison, son of billionaire Oracle founder Larry Ellison. It is unclear whether a deal will be reached, and how much value the negotiations place on Ms. Redstone’s participation could not be determined.

A deal for Paramount, if it comes to fruition, could be the starting point for a sweeping reorganization of the media industry over the next year. Comcast, the TV and cable giant that owns NBCUniversal, is looking for deals. Warner Bros. Discovery, owner of HBO and CNN, is entering the market next year for mysterious tax reasons.

Ms. Redstone, 69, who fought a bitter battle with her former allies to retain control of the company, now appears to be seriously considering giving it up. She has held out for years amid headwinds facing the traditional media industry, but she is exploring her options now that a serious suitor has expressed interest, two of the people said. Ms. Redstone’s holdings face some economic pressures, including long-term debt obligations and the unreliable advertising market for media companies like Paramount.

puck reported earlier that Ms. Redstone and Skydance were in talks. Spokespeople for National Amusements, Ms. Redstone and Skydance declined to comment.

A deal for Ms. Redstone’s stake in National Amusements would represent a major changing of the guard in the media industry. Paramount has been part of the Redstone family for decades, ever since Ms. Redstone’s father, the bellicose dealmaker Sumner Redstone, won the company in a hard-fought bidding war that attracted heavyweights including billionaire Barry Diller .

Paramount, with its cable channel package, movie studio and CBS broadcast network, has long been considered an acquisition target. Ms. Redstone began discussing a deal earlier this year with stakeholders including tech companies like Amazon, Apple and Netflix, according to two people familiar with the matter.

The negotiating fever that appears poised to sweep the industry was partly triggered by the slow decline of television. For years, television companies like Paramount have been propped up by ever-increasing payments from cable companies. But in recent years, the cable TV business model has begun to collapse as consumers have abandoned their cable subscriptions and turned to streaming services like Netflix, leaving traditional TV programmers searching for a way out.

Even streaming, once considered a savior of the media industry, is starting to show signs of strain. Old-fashioned television companies like Paramount, NBCUniversal and Warner Bros. Discovery is investing billions of dollars in creating streaming services to try to catch up with Netflix, but none have so far managed to replicate the benefits of cable TV.

Ms. Redstone is advised by BDT & MSD Partners, an investment bank founded by Byron Trott, a former Goldman Sachs partner who consults with some of America’s wealthiest and best-connected family business owners. Earlier this year, BDT & MSD Partners announced it was taking a $125 million stake in National Amusements, which would help the parent company repay its loan obligations.

Ms. Redstone owns a majority stake in National Amusements. In a February filing, Paramount said that National Amusements directly or indirectly owned approximately 77.4 percent of the voting Class A common stock of Paramount.

Founded in 2010 by David Ellison, Skydance has established itself as one of Hollywood’s leading independent studios. He has had a long-standing relationship with Paramount, producing hits like “Top Gun: Maverick” and “Mission: Impossible – Dead Reckoning.”

Skydance is backed by RedBird Capital Partners, one of the media industry’s most active private equity firms. RedBird also backs RedBird IMI, the company run by former CNN boss Jeff Zucker which is pursuing a deal for British newspapers The Telegraph and The Spectator.

Abandoning Paramount would be a momentous step for Ms. Redstone, who fought to maintain control of her family as her father’s mental abilities began to decline. In 2018, CBS – led at the time by Les Moonves – sued Ms. Redstone to take away control of her media holdings, but Ms. Redstone ultimately prevailed. Mr Moonves, who has faced a series of sexual harassment allegations, was interviewed by CBS in 2018. He denied the allegations of non-consensual sex.

Although Paramount’s value has declined steadily in recent years – matching the broader fortunes of traditional media – investor speculation about a National Amusements deal has sent the company’s shares soaring this month. Although its flagship streaming service, Paramount+, continues to lose money, Paramount said earlier this year that it had cut its losses for the service while continuing to add subscribers.

Rachel Abrams reports contributed.

Avatar photo

David B.Otero

Related Posts

Read also x