The cover story for the latest issue of Variety paints Shari Redstone's handling of Paramount as something akin to the way the characters on HBO's Succession covet control of their family's media empire. According to Variety, Redstone pulled out of an imminent deal with Skydance Media on June 11 only 2 minutes before the start of a meeting meant to confirm the terms of what lawyers and executives had already hammered out through negotiations. Per the report, representatives from Skydance were sent a message that a deal was untenable and there would be no point in any further negotiations, leaving Skydance officials "floored" and angry.
According to sources within Paramount, Redstone's reasons for rejecting the deal basically amount to pride in her control of what she consider the "family business" and greed, since she didn't feel the Skydance offer of just a $2.1 billion personal profit for her shares was enough.
This entire episode has potential major implications for Paramount productions, such as Star Trek, since in absence of a deal with outside parties, Paramount seems on track to initiate a plan of massive layoffs, seeking buyers for some assets, and austerity measures to cut spending.
Among other tidbits in the story:
According to sources within Paramount, Redstone's reasons for rejecting the deal basically amount to pride in her control of what she consider the "family business" and greed, since she didn't feel the Skydance offer of just a $2.1 billion personal profit for her shares was enough.
This entire episode has potential major implications for Paramount productions, such as Star Trek, since in absence of a deal with outside parties, Paramount seems on track to initiate a plan of massive layoffs, seeking buyers for some assets, and austerity measures to cut spending.
Among other tidbits in the story:
- If Paramount is not sold or fails in finding a suitor for any sort of merger, the current planning foresees the company sustaining its future with massive cuts in corporate spending, staff layoffs, and "asset sales" that are hoped to save $500 million annually.
- Paramount+ has lost the company $3 billion in the last two years. Even so, Paramount executives are still outwardly claiming to investors a belief that Paramount+ can be profitable by 2025, pointing to an upward trend in the streaming service's subscriber growth. However, that subscriber growth was helped along by heavy spending on original content, which may not be possible if the company overall is in austerity mode.
- Given the austerity measures, if no merger or sale occurs, current plans hope that "an investor or joint-venture partner" can be found to take on some of the financial load for Paramount+.
- Paramount is $14.6 billion in debt. This is actually down from a $20 billion debt load in 2020. However, at the same time profits have slowed from four-years ago as well.
- Paramount currently has THREE CEOs who come from different aspects of the company's media holdings, with the unusual corporate setup giving a certain amount of consternation to investors and industry analysts. The concern being that, if the collaboration between the three should break down, the company may devolve into separate "fiefdoms" that maneuver to protect their own agendas.
