Sony and Apollo’s Plan for Paramount: Break It Up

Shari Redstone helped build Paramount Global into a sprawling media empire, but if Sony Pictures Entertainment and private-equity giant Apollo Global Management acquire it for $26 billion, they plan to break it all up, according to three people familiar with the deal discussions.

The plan would see the CBS broadcast network, cable channels like MTV and the Paramount Plus streaming service auctioned off, said the people, who asked not to be identified sharing private details. Paramount Pictures — home to blockbusters like “The Godfather,” “Top Gun” and the “Mission Impossible” franchise — would be combined with Sony’s existing business.

Sony and Apollo are also likely to keep Paramount’s library of films and TV shows and the rights to well-known characters, including the Teenage Mutant Ninja Turtles and SpongeBob SquarePants. They have not yet outlined this plan to Paramount or its advisers.

A breakup of Paramount would represent a major changing of the guard in the entertainment industry. CBS and Paramount have been controlled by the Redstone family for decades, since the media mogul Sumner Redstone assembled the sprawling conglomerate in a series of audacious deals. His daughter, Shari Redstone, championed a 2019 deal to reunite it through a merger with CBS, and remains Paramount’s controlling shareholder.

Sony and Apollo, which submitted a nonbinding expression of interest in acquiring Paramount last week, are now engaging with Paramount’s financial advisers on next steps, the people said. The two companies have not yet signed formal nondisclosure agreements or begun due diligence reviews, a process that could take weeks.

Though it’s still early, the two bidders have already begun to envision how a deal for Paramount could unfold. The two would likely operate the company as a joint venture controlled by Sony, with a minority stake owned by Apollo, the people said. Sony would look to combine the marketing and distribution functions of the Paramount movie studio with its own operations, and divest the rest of the properties.

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