Will they or won’t they? And if they do, what route will they take? Those are the core questions we’ve seen on everyone’s lips this December as talks around a potential deal for some aspect of Paramount Global heat up. It’s hard to imagine that this return to enthusiastic deal chatter is how we’d finish out a year packed with labor disruptions, accelerated subscriber cord-cutting, and increasing Wall Street pressure for balance sheets solidly in the black. But if 2023 has taught the entertainment industry anything at all, it has to be to expect the unexpected. Our local insider, entertainment attorney Brandon Blake of Blake & Wang P.A., takes a closer look at what is firing Wall Street’s latest flurry of rumors and maybes.
Rumors Aplenty
Speculation that there will be a shrinkage in the number of streaming services- and the M&A action that inevitably comes with spinning off assets- has been rife for a while now. The news that David Ellison’s Skydance Media and private equity firm RedBird Capital could have their eyes on the Paramount Group (or rather its parent, National Amusements) has solidified attention onto the legacy entertainment company and its ailing Paramount+ streaming service.
Should we see these increasingly strong rumors become reality, an inevitable reshaping of the Hollywood landscape will follow- as will a flurry of new deals, too.
What We Know
Skydance Media is already an active player in the Paramount pool, responsible for not only their cornerstone Mission: Impossible franchise, but also some strong contenders like Reacher, World War Z, and the Star Trek into Darkness IP. Flush with a $400M cash injection through fundraising activities, it’s easy to see why Wall Street has latched onto this (potential) deal. In doing so, it catapults the wider M&A speculation in the industry back to prominence.
But is a spin-off of assets right for Paramount itself? It would leave its remaining DTC and linear assets looking even less attractive. Then again, a Skydance and Paramount combined film division could have considerably more scope to compete at scale with other streamers, something Paramount+ decidedly lacks.
There are several strong strategies we could see take center stage, with some going as far as to attach a $13B-$15B price tag to the anticipated deal. For now, however, we can only wait and see what comes- but if a Paramount deal hits Wall Street, there is one thing for certain- it will ignite the spark on other, similar M&A deals for the year.
