Paramount in ‘Active Discussions’ About Merging With Another Streamer
By Movieguide® Contributor
Paramount Global is looking to merge its streaming platform, Paramount+ — whether it’s with another streamer or a tech platform.
“Paramount Global leadership is having active discussions with other media and tech company executives to determine if a structure makes sense for both parties where Paramount+ can be merged with another streaming entity and potentially co-owned,” CNBC reported, adding that their sources asked not to be named, as the discussions are private and still ongoing.
It’s rumored that Warner Bros. Discovery is the frontrunner in these talks, which would allow the platforms to compete with giants like Netflix and Disney+ (who have already merged with Hulu and ESPN).
Paramount isn’t just looking to pair up with another streaming platform, though. At a recent employee town hall event, Chris McCarthy, one of Paramount’s three CEOs, explained that the company is looking into partnering with “a leading technology platform, which already has the full scale that we are trying to obtain.”
“This would allow us to focus a greater percent of our budget on the things we do best — that’s making hit content,” he said.
McCarthy continued, “The great news is there is tremendous interest in partnering with us across both of these strategic options, given the strength of our content, the volume of our hits, and our industry-leading track record.”
IAC, helmed by Barry Diller, is reportedly looking into such a partnership. CNBC reported that Diller signed an NDA prior to any discussions and is looking into pursuing “a controlling stake in Paramount.”
Movieguide® previously reported on Paramount’s search for a partner:
Following the breakdown of Paramount’s merger with Skydance, the company’s stock fell below $10 for the first time since Viacom and CBS merged in December 2019.
After months of talks about a deal with Skydance, Shari Redstone, Paramount’s controlling shareholder, withdrew the company’s option to merge with Skydance despite few options elsewhere.
“Without a deal the public now owns a company with: 125% of its EBITDA (earnings before interest, taxes, depreciation, and amortization) coming from the shrinking linear TV business, and the majority of that form general entertainment cable networks; a new 3-person office of the CEO; another round of cost-cutting coming; a likely change to its streaming strategy; and employee base that has already endured 6 months of uncertainty; little appeal for most agents and producers to bring their best material to; a possible rift with the co-producer of its tent-pole films, leverage over 4x and likely to creep up,” said Alan Gould of Loop Capital in a report.
“We assume PARA intensifies its focus to generate cash. At the annual meeting the tri-CEOs announced a $500 million cost-cutting initiative,” he continued. “They will try to find a partner for the streaming business which lost $4.5 billion over the past three years and is projected to lose another $0.9 billion this year.”
The company is still courting deals from Sony, Peacock and Warner Bros. Discovery. However, none of these mergers are currently under serious consideration.
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