In a surprising turn of events, Paramount Global experienced a significant surge in its shares on Friday following reports from Deadline and Puck News indicating that Skydance and RedBird Capital are exploring the possibility of taking over the media giant. Paramount’s shares closed up more than 12%, closing the day with a market capitalization of approximately $10.4 billion.
The media conglomerate, home to iconic franchises and a diverse content portfolio, has faced challenges this year, with its year-to-date share price remaining virtually flat, lagging behind the S&P 500’s impressive 20% gain. Paramount’s controlling shareholder, Shari Redstone, has expressed openness to significant deals, especially as the company navigates through the challenges of declining revenue and losses in the streaming sector.
RedBird Capital, led by the experienced former Goldman Sachs partner Gerry Cardinale, boasts investments in various media and sports assets. Notably, RedBird has a stake in Skydance, the production company behind Paramount’s 2022 blockbuster “Top Gun: Maverick” and other successful titles. The potential collaboration between Skydance and RedBird Capital raises intriguing possibilities for the future of Paramount Global.
Paramount currently carries a substantial long-term debt load of $15.6 billion, prompting speculation among investors about the company’s strategic plans to navigate the year 2024. In its most recent quarterly report, Paramount faced challenges in TV ad revenue, further emphasizing the need for strategic decisions to bolster its financial standing.
Adding to the complexity of the situation, Paramount is reportedly exploring bundling its Paramount+ streaming service with Apple TV+, a move that could potentially reshape the competitive landscape in the streaming industry. This potential partnership opens avenues for increased market penetration and subscriber growth.
As Paramount Global stands at a crossroads, the prospect of a takeover by Skydance and RedBird Capital introduces an element of anticipation and speculation. Investors and industry insiders will be closely watching as the media giant weighs its options, potentially reshaping the future of one of the entertainment industry’s most prominent players.
(Source: Deadline | CNBC)
