To specifically add to this, when the stock price went to 200, it wasn't parks related. When it came crashing back down, it wasn't parks related. The parks are a consistent money maker and are sorely needed for the company but one just has to look at Netflix to see the stock price is more centered around streaming than Disney having a response for Epic Universe.
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wabbott
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Not a whole lot new here, but a good overview of the PARA saga from the Company Town's "newspaper of record."
https://www.latimes.com/entertainme...al-byron-allen-warner-bros-skydance-explained
Paramount Global is for sale. Who’s buying and how did we get here?
By Christi Carras, Meg James
Feb. 2, 2024 - 3:00 AM PST
A for-sale sign has appeared on the lawn of Paramount Global, home of one of the most storied movie studios in Hollywood, popular television network CBS, and several other legacy brands and franchises.
Since last summer, multiple entertainment companies — including Skydance Media’s David Ellison and Warner Bros. Discovery — have been eyeing the media empire long controlled by the Redstone family through its National Amusements Inc. holding company. Rumblings of their movements have sparked fervent speculation about who might seal the deal and what yet another corporate merger could mean for the future of Paramount and the consolidating entertainment industry.
“Given the disruption going on within the ... domestic box office and the industry overall, it’s almost too early to call what the true ramifications of one less studio would be,” said Robert Fishman, a research analyst at MoffettNathanson.
“But it would clearly not help in terms of getting back to the peak levels that we saw pre-COVID.”
The Paramount saga has also raised questions about how one of entertainment’s oldest institutions — owner of coveted properties including “Star Trek,” “60 Minutes,” “Top Gun” and “Yellowstone” — has ended up in this position.
The company — the fusion of legacy players Viacom and CBS — has fallen on hard times. As the Hollywood business model continues to evolve and become more focused on streaming, Paramount, a company still largely reliant on network TV, cable channels and theatrical releases, “is getting boxed in from all sides,” said Sanjay Sharma, an adjunct professor of finance and business economics at USC’s Marshall School of Business.
“They need a massive investment to become a contender, to be a player among these giants,” Sharma said. “They are running out of options.”
How did we get here?
For more than 30 years, Sumner M. Redstone ruled the company, then known as Viacom, with a tight grip.
The hard-charging lawyer, businessman and Massachusetts movie theater owner outmaneuvered rivals to build one of America’s premier entertainment companies. He bought Paramount Pictures in 1994, and CBS five years later. He split the company in 2006, in part so he could collect compensation and dividends from two firms instead of one.
As Redstone’s health began to diminish more than a decade ago, Viacom slogged through a period of questionable management and under-investment that left it on shaky legs to compete in such a fast-changing landscape. Shari Redstone, Sumner’s daughter, forced out Viacom leaders in 2016. Her next move was to merge Viacom with CBS, which she accomplished in December 2019. (Sumner Redstone died in 2020).
At the time, the recombined company was worth $30 billion. It was renamed Paramount Global and launched streaming service Paramount+, replacing CBS All Access. The Redstone family owns about 10% of the equity in Paramount Global. But thanks to a dual stock structure, the family holds 77% of the voting shares, which gives it control.
Wall Street has since soured on Paramount, due to Netflix’s rise, the COVID-19 pandemic and last year’s twin Hollywood strikes, which turned off the content spigots. The company is now valued at $10 billion — making the Redstone family’s stake worth about $1 billion.
Amid its troubles, Paramount cut its dividend last May — significantly reducing the Redstone family’s source of steady cash. Redstone brought in merchant bank BDT & MSD Partners and its capital arm, which paid $125 million to become a preferred investor in National Amusements. The firm then set out to help Redstone restructure NAI’s debt obligations and investments.
BDT‘s founder, Byron Trott, is now leading Redstone through what has snowballed into a full-blown auction.
Who’s buying?
So far, there are three prominent industry players confirmed to be circling Paramount: Ellison’s Skydance Media, possibly with help from private equity firm RedBird Capital; David Zaslav’s Warner Bros. Discovery and Byron Allen’s Allen Media Group.
The first to express interest was Skydance, which has been looking to potentially purchase a controlling stake in National Amusements from the Redstone family. The acquisition would be the first step in a larger plan by Ellison to then merge his nearly 14-year-old company with Paramount.
Those talks have been in early stages, according to people familiar with the situation who were not authorized to comment. Ellison’s interest in buying National Amusements intrigued Shari Redstone, in large part because of his success as a movie producer of Paramount blockbusters including Tom Cruise’s “Top Gun: Maverick,” his deep love of films and his relative youth, which is viewed as a plus amid the generational industry shifts, according to a person close to the process but not authorized to comment publicly.
It doesn’t hurt that his father is billionaire Oracle Corp. founder Larry Ellison.
The parties would have to iron out terms that are palatable to Redstone, who must weigh the tax fallout of the all-cash deal that Ellison is seeking. Absorbing Paramount’s studio operations is the main priority for Ellison, per one insider, and he would have to decide whether to keep or spin the company’s TV brands — such as CBS, Nickelodeon, Comedy Central, BET, MTV and VH1 — and Paramount+.
Ellison has been open to considering holding on to television assets, one of the knowledgeable people said, because CBS’ and the other channels’ programming feeds Paramount+ .
Next in line was Zaslav, who met with Paramount Chief Executive Bob Bakish in December to mull over the idea of merging their companies, according to people who were briefed on the matter. Zaslav was interested, knowledgeable people say, because his company needs a boost and its streaming service Max, despite having HBO content, is far from the front of the streaming pack.
But Warner Bros. Discovery investors balked at the prospect of a Paramount purchase. Warner Bros. Discovery already is struggling to pay down its $40 billion in debt, and most analysts see the company as a takeover target.
This week, another possible contender has entered the chat: Allen, who submitted a $14.3-billion bid to purchase all of Paramount Global’s outstanding shares . Allen’s offer of $28.58 for each voting share is a considerable premium to the current price. Allen reportedly offered $21.53 for each nonvoting share. His company would also absorb nearly $15 billion in Paramount debt.
Analysts have have cast doubt on Warner Bros. Discovery’s ability to pull off a deal because of its mountain of debt; and some also have questioned Allen’s financial muscle.
Allen, a comedian turned media mogul, owns a cadre of television assets including the Weather Channel and Cars.TV. He has made offers in the past for assets including Paramount’s BET and VH1, as well as local station owner Tegna, but those bids never came to fruition. (Paramount opted not to sell BET and VH1 after all.) However, some analysts see potential in Allen’s pitch for Paramount.
“Byron has built a very interesting business. And you have to ask: If the house is on fire and everyone is running out of the house, then why would Byron be trying to run inside?” asked Corey Martin, a managing partner of the Beverly Hills law firm Granderson Des Rochers. “He has accumulated a lot of local television station affiliates and he could derive synergies by having national scale. And CBS has NFL football.”
Mario Gabelli, whose Gabelli Funds holds voting-class shares in Paramount, said Thursday, “If the dust settles in the way that I think it will, then Byron Allen could be the right partner for the TV stations.”
In a statement provided Wednesday to The Times, Allen Media Group touted the offer as “the best solution for all of the Paramount Global shareholders,” adding that “the bid should be taken seriously and pursued.”
Unlike Ellison, Allen is angling to sell Paramount’s film arm and some of its intellectual property while keeping its streaming platform and TV channels, according to Bloomberg.
What happens next?
If debt-ridden Warner Bros. Discovery and Paramount were to merge, they would have the opportunity to expand their content libraries and consolidate costs.
Fusing Paramount+ and Warner Bros. Discovery’s Max (already a fusion of HBO Max and Discovery+) could potentially create a super-streamer capable of rivaling the likes of Netflix, Disney+ and Amazon Prime Video, Sharma said.
But it’s not guaranteed that consumers would be willing to pay extra for access to that augmented collection.
“If Warner Bros. is able to increase its subscription by $5 per month ... and add Paramount assets in it, economically, that would make sense,” Sharma said. “But ... if a library suddenly acquires science books, I may not want science books. So they say they will increase my subscription. I will say, ‘No, I will stop coming to this library.’”
A Warner Bros. Discovery-Paramount merger would also allow the companies to blend their sports and news operations.
On the other hand, a union between Paramount Global and Skydance could make sense, given the studios’ history of collaborating on various titles, including movies in the hit “Mission: Impossible” and “Top Gun” franchises.
Under the ownership of Skydance or Allen Media Group, the Paramount brand probably wouldn’t undergo much change because it’s stronger than either company, Sharma said. However, Ellison or Allen could opt to sell off certain Paramount assets to improve their bottom line.
As of Thursday morning, one analyst who was not authorized to comment did not see a clear path to a deal for Warner Bros. Discovery or Allen Media Group. An agreement between Skydance and Paramount seems most likely, the analyst continued, given that the process of ironing out terms is reportedly underway.
“It’s appropriate that everyone is talking,” said the investor Gabelli. “That’s what business is all about.”
J. Clara Chan and Stephen Battaglio contributed to this report.
https://www.latimes.com/entertainme...al-byron-allen-warner-bros-skydance-explained
Paramount Global is for sale. Who’s buying and how did we get here?
By Christi Carras, Meg James
Feb. 2, 2024 - 3:00 AM PST
A for-sale sign has appeared on the lawn of Paramount Global, home of one of the most storied movie studios in Hollywood, popular television network CBS, and several other legacy brands and franchises.
Since last summer, multiple entertainment companies — including Skydance Media’s David Ellison and Warner Bros. Discovery — have been eyeing the media empire long controlled by the Redstone family through its National Amusements Inc. holding company. Rumblings of their movements have sparked fervent speculation about who might seal the deal and what yet another corporate merger could mean for the future of Paramount and the consolidating entertainment industry.
“Given the disruption going on within the ... domestic box office and the industry overall, it’s almost too early to call what the true ramifications of one less studio would be,” said Robert Fishman, a research analyst at MoffettNathanson.
“But it would clearly not help in terms of getting back to the peak levels that we saw pre-COVID.”
The Paramount saga has also raised questions about how one of entertainment’s oldest institutions — owner of coveted properties including “Star Trek,” “60 Minutes,” “Top Gun” and “Yellowstone” — has ended up in this position.
The company — the fusion of legacy players Viacom and CBS — has fallen on hard times. As the Hollywood business model continues to evolve and become more focused on streaming, Paramount, a company still largely reliant on network TV, cable channels and theatrical releases, “is getting boxed in from all sides,” said Sanjay Sharma, an adjunct professor of finance and business economics at USC’s Marshall School of Business.
“They need a massive investment to become a contender, to be a player among these giants,” Sharma said. “They are running out of options.”
How did we get here?
For more than 30 years, Sumner M. Redstone ruled the company, then known as Viacom, with a tight grip.
The hard-charging lawyer, businessman and Massachusetts movie theater owner outmaneuvered rivals to build one of America’s premier entertainment companies. He bought Paramount Pictures in 1994, and CBS five years later. He split the company in 2006, in part so he could collect compensation and dividends from two firms instead of one.
As Redstone’s health began to diminish more than a decade ago, Viacom slogged through a period of questionable management and under-investment that left it on shaky legs to compete in such a fast-changing landscape. Shari Redstone, Sumner’s daughter, forced out Viacom leaders in 2016. Her next move was to merge Viacom with CBS, which she accomplished in December 2019. (Sumner Redstone died in 2020).
At the time, the recombined company was worth $30 billion. It was renamed Paramount Global and launched streaming service Paramount+, replacing CBS All Access. The Redstone family owns about 10% of the equity in Paramount Global. But thanks to a dual stock structure, the family holds 77% of the voting shares, which gives it control.
Wall Street has since soured on Paramount, due to Netflix’s rise, the COVID-19 pandemic and last year’s twin Hollywood strikes, which turned off the content spigots. The company is now valued at $10 billion — making the Redstone family’s stake worth about $1 billion.
Amid its troubles, Paramount cut its dividend last May — significantly reducing the Redstone family’s source of steady cash. Redstone brought in merchant bank BDT & MSD Partners and its capital arm, which paid $125 million to become a preferred investor in National Amusements. The firm then set out to help Redstone restructure NAI’s debt obligations and investments.
BDT‘s founder, Byron Trott, is now leading Redstone through what has snowballed into a full-blown auction.
Who’s buying?
So far, there are three prominent industry players confirmed to be circling Paramount: Ellison’s Skydance Media, possibly with help from private equity firm RedBird Capital; David Zaslav’s Warner Bros. Discovery and Byron Allen’s Allen Media Group.
The first to express interest was Skydance, which has been looking to potentially purchase a controlling stake in National Amusements from the Redstone family. The acquisition would be the first step in a larger plan by Ellison to then merge his nearly 14-year-old company with Paramount.
Those talks have been in early stages, according to people familiar with the situation who were not authorized to comment. Ellison’s interest in buying National Amusements intrigued Shari Redstone, in large part because of his success as a movie producer of Paramount blockbusters including Tom Cruise’s “Top Gun: Maverick,” his deep love of films and his relative youth, which is viewed as a plus amid the generational industry shifts, according to a person close to the process but not authorized to comment publicly.
It doesn’t hurt that his father is billionaire Oracle Corp. founder Larry Ellison.
The parties would have to iron out terms that are palatable to Redstone, who must weigh the tax fallout of the all-cash deal that Ellison is seeking. Absorbing Paramount’s studio operations is the main priority for Ellison, per one insider, and he would have to decide whether to keep or spin the company’s TV brands — such as CBS, Nickelodeon, Comedy Central, BET, MTV and VH1 — and Paramount+.
Ellison has been open to considering holding on to television assets, one of the knowledgeable people said, because CBS’ and the other channels’ programming feeds Paramount+ .
Next in line was Zaslav, who met with Paramount Chief Executive Bob Bakish in December to mull over the idea of merging their companies, according to people who were briefed on the matter. Zaslav was interested, knowledgeable people say, because his company needs a boost and its streaming service Max, despite having HBO content, is far from the front of the streaming pack.
But Warner Bros. Discovery investors balked at the prospect of a Paramount purchase. Warner Bros. Discovery already is struggling to pay down its $40 billion in debt, and most analysts see the company as a takeover target.
This week, another possible contender has entered the chat: Allen, who submitted a $14.3-billion bid to purchase all of Paramount Global’s outstanding shares . Allen’s offer of $28.58 for each voting share is a considerable premium to the current price. Allen reportedly offered $21.53 for each nonvoting share. His company would also absorb nearly $15 billion in Paramount debt.
Analysts have have cast doubt on Warner Bros. Discovery’s ability to pull off a deal because of its mountain of debt; and some also have questioned Allen’s financial muscle.
Allen, a comedian turned media mogul, owns a cadre of television assets including the Weather Channel and Cars.TV. He has made offers in the past for assets including Paramount’s BET and VH1, as well as local station owner Tegna, but those bids never came to fruition. (Paramount opted not to sell BET and VH1 after all.) However, some analysts see potential in Allen’s pitch for Paramount.
“Byron has built a very interesting business. And you have to ask: If the house is on fire and everyone is running out of the house, then why would Byron be trying to run inside?” asked Corey Martin, a managing partner of the Beverly Hills law firm Granderson Des Rochers. “He has accumulated a lot of local television station affiliates and he could derive synergies by having national scale. And CBS has NFL football.”
Mario Gabelli, whose Gabelli Funds holds voting-class shares in Paramount, said Thursday, “If the dust settles in the way that I think it will, then Byron Allen could be the right partner for the TV stations.”
In a statement provided Wednesday to The Times, Allen Media Group touted the offer as “the best solution for all of the Paramount Global shareholders,” adding that “the bid should be taken seriously and pursued.”
Unlike Ellison, Allen is angling to sell Paramount’s film arm and some of its intellectual property while keeping its streaming platform and TV channels, according to Bloomberg.
What happens next?
If debt-ridden Warner Bros. Discovery and Paramount were to merge, they would have the opportunity to expand their content libraries and consolidate costs.
Fusing Paramount+ and Warner Bros. Discovery’s Max (already a fusion of HBO Max and Discovery+) could potentially create a super-streamer capable of rivaling the likes of Netflix, Disney+ and Amazon Prime Video, Sharma said.
But it’s not guaranteed that consumers would be willing to pay extra for access to that augmented collection.
“If Warner Bros. is able to increase its subscription by $5 per month ... and add Paramount assets in it, economically, that would make sense,” Sharma said. “But ... if a library suddenly acquires science books, I may not want science books. So they say they will increase my subscription. I will say, ‘No, I will stop coming to this library.’”
A Warner Bros. Discovery-Paramount merger would also allow the companies to blend their sports and news operations.
On the other hand, a union between Paramount Global and Skydance could make sense, given the studios’ history of collaborating on various titles, including movies in the hit “Mission: Impossible” and “Top Gun” franchises.
Under the ownership of Skydance or Allen Media Group, the Paramount brand probably wouldn’t undergo much change because it’s stronger than either company, Sharma said. However, Ellison or Allen could opt to sell off certain Paramount assets to improve their bottom line.
As of Thursday morning, one analyst who was not authorized to comment did not see a clear path to a deal for Warner Bros. Discovery or Allen Media Group. An agreement between Skydance and Paramount seems most likely, the analyst continued, given that the process of ironing out terms is reportedly underway.
“It’s appropriate that everyone is talking,” said the investor Gabelli. “That’s what business is all about.”
J. Clara Chan and Stephen Battaglio contributed to this report.
Jrb1979
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FIFY. Wall St. and Burbank have never understood theme parks.
wabbott
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Used to, Burbank did. Walt and Roy knew, and so did Eisner.
Elijah Abrams
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Peltz is lying about getting Disney’s creative engines firing again.
Universal’s Epic move could prompt Disney to up its game, too, experts say
https://www.msn.com/en-us/travel/ne...d&ocid=winp2fptaskbarhover&ei=11&sc=shoreline
Story by Dewayne Bevil, Orlando Sentinel • 1d
Fresh details from Universal Orlando about its upcoming Epic Universe theme park are the latest flex in the long-running competition for tourism dollars by entertainment titans, including standing champion Walt Disney World, which industry analysts predict could soon strike back.
Universal’s Epic announcements confirm big news such as the park’s lands being themed to Nintendo, “How to Train Your Dragon,” Harry Potter and Universal’s classic monsters. And they unveil finer details such as restaurant names and the speed of the racing roller coaster.
The batch of facts intensified the buzz about the park, set to open next year. And it has some watchers wondering if a Disney countermove is coming soon.
At least one expert thinks Universal’s expansion will prompt the long-awaited “fifth gate” – another Disney World theme park. Industry observers also say the gap between Orlando’s biggest park operators appears to be thinning.
“There’s an 800-pound gorilla in the room, but there’s also a 600-pound gorilla in the room. We’ve watched that gorilla grow from little gorilla to big gorilla,” said Martin Lewison, associate professor of business management at Farmingdale State College in New York.
“But it’s not necessarily a bad thing because there is research that shows that the concentration of all these parks in one place helps all of them,” said Lewison, who teaches courses in tourism, hospitality and attractions management.
Dennis Speigel, owner of International Theme Park Services, said Epic Universe is going to tip the scales more toward Universal.
“This is going to tilt the axis of the theme-park world, I believe, in Orlando. This park is going to perform at enormous numbers,” he said. Epic Universe will attract between 5 million and 6 million people in its first year, he estimated.
In 2019, the last full year before the coronavirus pandemic, Universal Studios Florida reportedly had 10.92 million visitors and Universal’s Islands of Adventure welcomed 10.38 million people, according to the annual AECOM/TEA attendance report.
Magic Kingdom was the most popular theme park in the world with 20.96 million visitors in 2019, according to the report.
Checking out hotels
While the Epic’s flashy rides and eye-catching design draw attention, its three new hotels play key roles in Universal’s future as company officials think they will lead to more extended stays.
“The addition of Epic Universe will almost double the size of Universal Orlando,” Mark Woodbury, CEO of Universal Parks & Experiences said in a video released Tuesday. “This gives us the opportunity to bring people to Universal Orlando for an entire week of the most incredible experiences they can imagine.”
The 500-room Universal Helios Grand Hotel is “inside” the theme park, Universal said, with an exclusive entrance to the theme park for guests. Nearby will be Stella Nova and Terra Luna resorts, with 750 rooms apiece, which are scheduled to open Jan. 21 and Feb. 25, respectively.
Universal did not share a precise opening date for the theme park, but officials have publicly said “by summer” of 2025.
“Disney was the master and the owner of the on-site hotels for decades,” Speigel said. “It keeps your visitors on-site, which builds per-capitas both at the admissions gates and internally in the food and beverage and merch and all retail.”
The three hotels, now under construction, will bring Universal’s on-property count to 11. Its most recent additions are Surfside Inn and Dockside Inn, which opened in 2019 and 2020 as parts of the Endless Summer Resort on International Drive.
“It’s only been about 10 years since they [Universal] really started this effort, and how they’ve accelerated has been amazing,” Speigel said.
Universal will need to expand its workforce to staff the park and hotels. Those roles have been difficult to fill and traditionally low-paying in Orlando.
“Everybody’s suffering in the industry. So it is a factor that has to come into play,” Speigel said.
“I think you will see more lobbying in the future for the J-1 visas,” a government program for people living outside the U.S. allowing participation in study- and work-related exchange programs here, he said.
Having a hotel very close to the theme park is not a new concept but a growing one. When Magic Kingdom opened in 1971, Disney put the Contemporary Resort next door. A Legoland Florida hotel is adjacent to the theme park.
SeaWorld Orlando has filed permits to build two hotels, one with 250 rooms and one with more than 500 rooms. SeaWorld Parks & Entertainment CEO Marc Swanson told investors that he expects the company to open hotels in 2026.
There have been hotel projects adjacent to parks in the Six Flags and Cedar Fair chains, as well as at Hersheypark in Pennsylvania and Dollywood in Tennessee, Speigel said.
“If you’re an operator, you want to keep them as close to you as you can so they don’t get distracted,” he said.
Future stock
Speigel points to past milestones in Universal Orlando’s history that got it to this point. The launching pad was the introduction of Back to the Future: The Ride at Universal Studios theme park in 1991, followed by the debut of the Wizarding World of Harry Potter at Islands of Adventure in 2010, he said.
“We saw the largest jump in attendance and margins we’d seen in the industry [with Potter],” he said. “So there’s no question that this new park Epic Universe, in my mind, puts Universal on par, on level with Disney now.”
He expects Disney to speed up its development timetable now.
“You’re going to see a big announcement. … They’re going to add a fifth park,” Speigel predicted.
“I’ve heard rumors that it has been worked on for several years now. But I think the [Universal] announcement …. will be a catalyst for Disney to show their hand as well,” he said.
Walt Disney Co. officials have made no public mention of a so-called “fifth gate,” although the company has pledged to invest $60 billion over 10 years in its theme parks worldwide.
In April, Disney said it planned to invest $17 billion in Walt Disney World projects, and that figure included the Epcot transformation projects and Tiana’s Bayou Adventure, a Magic Kingdom water ride set to open in December.
Beyond Disney and Universal, there is room for more tourism players, including SeaWorld Orlando, Speigel said. The corporate name change, announced Tuesday, from SeaWorld Entertainment Inc. to United Parks & Resorts is a step in its evolution, he said. The theme park itself keeps the SeaWorld Orlando name.
“I think they have to find their common ground in a couple of areas, in the product area and in the pricing area,” Speigel said. “People are still price-conscious who come to our industry, and SeaWorld could build their volume by giving a strong price value relationship to the guest.”
Central Florida visitors don’t necessarily sequester themselves at one theme park company during their stay, Lewison said.
“I think there’s definitely a synergy there even though the parks may not mention it explicitly,” he said.
There are options because there’s money to be made in Orlando.
“Disney has been making unbelievable profits from their theme parks for 50 years, you know, with ups and downs. So it’s a huge market. … We know the demand is inelastic, because they keep raising prices, and they keep getting record attendance,” Lewison said.
“The law of business is if there are profits, then there are going to be competitors who try to compete those profits away,” he said. “It’s a growing market, which is unusual, because it’s a mature market. So, yes, there will be more and more competition for hotel rooms … but there already was.
“It’s amazing. Where else can you build a giant hotel and expect to be profitable than Orlando, Florida?”
Snuffleupagus alert: SeaWorld celebrating Sesame Street Land’s 5th birthday
The waiting game
When Epic debuts, it will be Orlando’s first new full-blown theme park in this millennium. Disney’s Animal Kingdom opened in 1998, followed by Universal’s Islands of Adventure in 1999.
“For theme park fans, this is the first new theme park, at least around here, in the internet age where we have instant connection with other fans like ourselves,” said Alicia Stella, who follows Epic for her website Orlando Park Stop.
“People can share in real time on social media about construction and their thoughts and rumors. And there’s no end to the discussion,” she said.
Tuesday’s newly released details could spread interest wider, Stella said.
“It’s also a day when the non-theme park fans, the regular general public, start to see what we’ve been experiencing and start to climb on board the journey here,” she said.
Email me at dbevil@orlandosentinel.com. Threads account: @dbevil. X account: @themeparks. Subscribe to the Theme Park Rangers newsletter at orlandosentinel.com/newsletters.
DeeBee3
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Does this exclude the Asian parks? I'm wondering how they work all that out since they have different agreements in China and Japan etc. There is the Shanghai Shendi group, the Oriental Land Co, and Hong Kong Intl theme parks.
I realize Paris went back to Disney, but that was relatively recently.
I have no idea how those sorts of financials work, but those partnerships definitely use their money so comparing Domestic to Intl is probably more complex.
HokieRaven5
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TWDC has capital expenditure at Shanghai and Hong Kong, but no capital expenditure at Tokyo.
Domestic Parks CapEx includes WDW, DLR, and DCL
Each Fiscal year:
2016: Domestic - $2.180B, International - $2.035B (Shanghai was still being built and opened June 2016)
2017: Domestic - $2.375B, International - $816M
2018: Domestic - $3.212B, International - $671M
2019: Domesitc - $3.294B, International - $852M
2020: Domestic - $2.145B, International - $759M
2021: Domestic - $1.597B, International - $675M
2022: Domestic - $2.680B, International - $767M
2023: Domestic - $2.203B, International - $822M
So with the exception of fiscal 2016 when Shanghai was still being constructed, TWDC has invested less than $1B in their international parks offerings annually.
wabbott
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https://www.cnbc.com/2024/02/03/paramount-sale-talks-why-shari-redstone-needs-the-right-deal.html
Why Shari Redstone is trying to sell Paramount — and why she needs the right deal
Published Sat, Feb 3 2024 - 8:00 AM EST
Alex Sherman@sherman4949
Key Points
There are sector-related reasons for why a deal seems increasingly urgent. The media world is changing rapidly. During the Covid-19 pandemic, legacy media companies seemingly had a path to growth by launching their own streaming services. But Wall Street turned its collective back on that narrative after Netflix growth stalled in 2022, leaving companies such as Paramount Global twisting in the wind.
Paramount Global’s flagship streaming service, Paramount+, has successfully accumulated 63 million subscribers, and it’s still growing. But it’s also still losing money, albeit not as much as it used to. Third-quarter streaming operating losses were $238 million. A year ago, they were $343 million.
Without a clear growth narrative, Paramount Global has struggled as a publicly traded company. Shares are down 56% in the past two years. This has piqued the interest of some private equity firms and other potential buyers, including David Ellison at Skydance Media and media mogul Byron Allen.
If Paramount Global — which owns Paramount Pictures, CBS, cable networks such as Nickelodeon and Comedy Central, and intellectual property such as “Star Trek” and “SpongeBob SquarePants” — is withering as a publicly traded company, perhaps taking it private or selling some of the assets for parts makes more sense.
Redstone has personal reasons for considering selling now, too. She has long had an active interest in Jewish causes, including having served on the board of Combined Jewish Philanthropies.
Redstone’s focus on fighting antisemitism has increased since the Oct. 7 Hamas terrorist attack on Israel, which killed about 1,200 people, according to people familiar with Redstone’s thinking.
“Look, I’m not doing well, to be honest,” Redstone told The Hollywood Reporter in October. “I think there are no words to describe what took place, and all I do every day is try to do something that’s going to make a difference and help people.”
Then there’s a significant financial consideration related to National Amusements Inc., or NAI, the holding company that owns the majority of Paramount Global’s voting shares.
When Redstone’s father, Sumner Redstone, the founder of National Amusements, died in 2020, Shari Redstone inherited his shares. National Amusements directly or indirectly through subsidiaries owns 77% of the Class A voting stock of Paramount Global and 5.2% of the Class B common stock, constituting about 10% of the overall equity of the
company.
According to tax law, Shari Redstone must pay taxes on the shares tied to their value at the time of her father’s death.
That amounts to more than $200 million, according to a person familiar with the matter.
Redstone has deferred the tax bill for 10 years, until 2034, and only owes about $7 million this year, said the person, who asked not to be named because the details are private. Still, the looming tax payment, along with an additional $37 million debt payment due to Wells Fargo in March, could be compelling motivation to sell off National Amusements for cash, rather than a trade of equity with a strategic partner.
National Amusements will make its March payment on time, according to a Redstone spokesperson.
“National Amusements has significant assets including our well-located movie theaters in the US, UK and Latin America, owned real estate properties and shareholding in Paramount Global. We continue to take steps to improve our financial position including through debt reduction with a meaningful paydown in March,” the spokesperson said.
The right kind of deal
Redstone’s varied motivations for selling mean she’s looking for the right kind of deal, at the right price — and so far, she has had options.
Warner Bros. Discovery has held preliminary talks to acquire Paramount Global. While Warner Bros. Discovery board member John Malone suggested in an interview with CNBC in November that Paramount Global could be a future distressed asset, that fate can be avoided if CEO Bob Bakish can make Paramount+ profitable.
There could be structural issues with a Warner Bros. Discovery deal, in terms of a cash-stock split, including how much debt a combined company would want to carry. It’s also possible Warner Bros. Discovery may choose to wait to see if Comcast is willing to part with NBCUniversal.
In early talks with buyers, Redstone has pushed for a high premium for both National Amusements and Paramount Global, according to people familiar with the matter. Paramount Global has a market capitalization of nearly $10 billion and about $13 billion of net debt.
Redstone also has fiduciary duties as Paramount Global’s nonexecutive chair. If she agrees to sell either National Amusements or all of Paramount Global, she’ll need buy in from other investors.
Banker Byron Trott, who is helping Redstone navigate sale talks, has long been an advisor for Warren Buffett, whose Berkshire Hathaway is Paramount Global’s largest Class B shareholder.
No deal is imminent, said people familiar with the process. As CNBC reported last month, Skydance is interested in acquiring NAI as part of a two-step transaction that would involve merging Skydance with Paramount Pictures.
Talks are further along with Redstone regarding NAI than they are with Paramount Global, two of the people said. Still, Skydance is only interested in acquiring NAI if it can get a deal done with Paramount Global, CNBC reported in January.
Spokespeople for Skydance, National Amusements and Paramount Global declined to comment.
While Comcast, the largest U.S. cable provider, and Paramount Global renewed their deal with little fanfare in December, Charter is a different animal. The second-largest U.S. cable operator struck a deal with Disney
last year that paved the way for Charter to begin lopping off little-watched cable networks while directly selling subscription streaming services to its millions of broadband customers.
Paramount Global charges $5.99 per month for Paramount+ with advertising. Most of what airs on CBS and Paramount Global’s cable networks is available on Paramount+. That gives Charter two advantages in a renewal deal.
First, Charter will likely argue Paramount Global has set a price of $5.99 for the value of all its cable networks and CBS. Charter can point to that as the ceiling price for what it’s willing to pay for Paramount Global’s linear channels.
Second, Charter now has some blackout leverage with consumers because they can point them toward Paramount+ as a relatively inexpensive way of accessing Paramount’s content. Charter will make the same argument it did with Disney: The existence of the same content on both the streaming service and the linear channels is effectively double charging the consumer.
Paramount Global probably can’t afford to lose carriage for the bulk of its networks with Charter, given Paramount+ continues to lose money. Paramount Global is still dependent on its linear business, which earned $15 billion of its $22 billion in revenue in the first nine months of 2023 from traditional TV. More than $6 billion of that was from cable affiliate fees.
Bakish has always successfully reached renewal deals with the major pay TV distributors since taking over as CEO in 2019 and even dating back to his time running Viacom, beginning in 2016. Still, given Bakish’s lack of leverage, he may have to settle for lower affiliate fees or an agreement that devalues Paramount+.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
Why Shari Redstone is trying to sell Paramount — and why she needs the right deal
Published Sat, Feb 3 2024 - 8:00 AM EST
Alex Sherman@sherman4949
Key Points
- Paramount Global controlling shareholder Shari Redstone has increased the seriousness of sale talks in recent months.
- Sector-related reasons, as well as personal and financial motivations, have added complexity to the deal-making process.
- Paramount Global’s carriage deal with Charter, set to expire in April, looms over potential sale discussions.
There are sector-related reasons for why a deal seems increasingly urgent. The media world is changing rapidly. During the Covid-19 pandemic, legacy media companies seemingly had a path to growth by launching their own streaming services. But Wall Street turned its collective back on that narrative after Netflix growth stalled in 2022, leaving companies such as Paramount Global twisting in the wind.
Paramount Global’s flagship streaming service, Paramount+, has successfully accumulated 63 million subscribers, and it’s still growing. But it’s also still losing money, albeit not as much as it used to. Third-quarter streaming operating losses were $238 million. A year ago, they were $343 million.
Without a clear growth narrative, Paramount Global has struggled as a publicly traded company. Shares are down 56% in the past two years. This has piqued the interest of some private equity firms and other potential buyers, including David Ellison at Skydance Media and media mogul Byron Allen.
If Paramount Global — which owns Paramount Pictures, CBS, cable networks such as Nickelodeon and Comedy Central, and intellectual property such as “Star Trek” and “SpongeBob SquarePants” — is withering as a publicly traded company, perhaps taking it private or selling some of the assets for parts makes more sense.
Redstone has personal reasons for considering selling now, too. She has long had an active interest in Jewish causes, including having served on the board of Combined Jewish Philanthropies.
Redstone’s focus on fighting antisemitism has increased since the Oct. 7 Hamas terrorist attack on Israel, which killed about 1,200 people, according to people familiar with Redstone’s thinking.
“Look, I’m not doing well, to be honest,” Redstone told The Hollywood Reporter in October. “I think there are no words to describe what took place, and all I do every day is try to do something that’s going to make a difference and help people.”
Then there’s a significant financial consideration related to National Amusements Inc., or NAI, the holding company that owns the majority of Paramount Global’s voting shares.
When Redstone’s father, Sumner Redstone, the founder of National Amusements, died in 2020, Shari Redstone inherited his shares. National Amusements directly or indirectly through subsidiaries owns 77% of the Class A voting stock of Paramount Global and 5.2% of the Class B common stock, constituting about 10% of the overall equity of the
company.
According to tax law, Shari Redstone must pay taxes on the shares tied to their value at the time of her father’s death.
That amounts to more than $200 million, according to a person familiar with the matter.
Redstone has deferred the tax bill for 10 years, until 2034, and only owes about $7 million this year, said the person, who asked not to be named because the details are private. Still, the looming tax payment, along with an additional $37 million debt payment due to Wells Fargo in March, could be compelling motivation to sell off National Amusements for cash, rather than a trade of equity with a strategic partner.
National Amusements will make its March payment on time, according to a Redstone spokesperson.
“National Amusements has significant assets including our well-located movie theaters in the US, UK and Latin America, owned real estate properties and shareholding in Paramount Global. We continue to take steps to improve our financial position including through debt reduction with a meaningful paydown in March,” the spokesperson said.
The right kind of deal
Redstone’s varied motivations for selling mean she’s looking for the right kind of deal, at the right price — and so far, she has had options.
Warner Bros. Discovery has held preliminary talks to acquire Paramount Global. While Warner Bros. Discovery board member John Malone suggested in an interview with CNBC in November that Paramount Global could be a future distressed asset, that fate can be avoided if CEO Bob Bakish can make Paramount+ profitable.
There could be structural issues with a Warner Bros. Discovery deal, in terms of a cash-stock split, including how much debt a combined company would want to carry. It’s also possible Warner Bros. Discovery may choose to wait to see if Comcast is willing to part with NBCUniversal.
In early talks with buyers, Redstone has pushed for a high premium for both National Amusements and Paramount Global, according to people familiar with the matter. Paramount Global has a market capitalization of nearly $10 billion and about $13 billion of net debt.
Redstone also has fiduciary duties as Paramount Global’s nonexecutive chair. If she agrees to sell either National Amusements or all of Paramount Global, she’ll need buy in from other investors.
Banker Byron Trott, who is helping Redstone navigate sale talks, has long been an advisor for Warren Buffett, whose Berkshire Hathaway is Paramount Global’s largest Class B shareholder.
No deal is imminent, said people familiar with the process. As CNBC reported last month, Skydance is interested in acquiring NAI as part of a two-step transaction that would involve merging Skydance with Paramount Pictures.
Talks are further along with Redstone regarding NAI than they are with Paramount Global, two of the people said. Still, Skydance is only interested in acquiring NAI if it can get a deal done with Paramount Global, CNBC reported in January.
Spokespeople for Skydance, National Amusements and Paramount Global declined to comment.
Charter renewal
There’s also the issue of Charter’s looming carriage deal with Paramount Global, which is set to expire in April, according to people familiar with the matter. This may not be guiding Redstone’s urgency for a sale, as a likely deal will be reached long before an acquisition closes, but it’s certainly looming over the company’s future prospects.While Comcast, the largest U.S. cable provider, and Paramount Global renewed their deal with little fanfare in December, Charter is a different animal. The second-largest U.S. cable operator struck a deal with Disney
last year that paved the way for Charter to begin lopping off little-watched cable networks while directly selling subscription streaming services to its millions of broadband customers.
Paramount Global charges $5.99 per month for Paramount+ with advertising. Most of what airs on CBS and Paramount Global’s cable networks is available on Paramount+. That gives Charter two advantages in a renewal deal.
First, Charter will likely argue Paramount Global has set a price of $5.99 for the value of all its cable networks and CBS. Charter can point to that as the ceiling price for what it’s willing to pay for Paramount Global’s linear channels.
Second, Charter now has some blackout leverage with consumers because they can point them toward Paramount+ as a relatively inexpensive way of accessing Paramount’s content. Charter will make the same argument it did with Disney: The existence of the same content on both the streaming service and the linear channels is effectively double charging the consumer.
Paramount Global probably can’t afford to lose carriage for the bulk of its networks with Charter, given Paramount+ continues to lose money. Paramount Global is still dependent on its linear business, which earned $15 billion of its $22 billion in revenue in the first nine months of 2023 from traditional TV. More than $6 billion of that was from cable affiliate fees.
Bakish has always successfully reached renewal deals with the major pay TV distributors since taking over as CEO in 2019 and even dating back to his time running Viacom, beginning in 2016. Still, given Bakish’s lack of leverage, he may have to settle for lower affiliate fees or an agreement that devalues Paramount+.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
Elijah Abrams
DIS Veteran
- Joined
- Feb 6, 2020
- Messages
- 610
Disney is not interested in building a "fifth gate" for Walt Disney World though, and the Imagineering division is trash now, since many Imagineers were laid off by Chapek.
jade1
I spend half my money on WDW, and waste the rest.
- Joined
- Dec 30, 2001
- Messages
- 11,639
Maybe their stalling until the Epic crew is finished and looking to build new attractions/lands/parks at WDW. It appears to be a very talented and efficient group over there currently.
Elijah Abrams
DIS Veteran
- Joined
- Feb 6, 2020
- Messages
- 610
It's just that I've heard that the "beyond Big Thunder" and Animal Kingdom plans are "blue sky", and that Disney is throwing them out there and in reality have no clue.
Heck, if Disney does indeed start greenlighting and constructing new park projects after Universal's Epic Universe opens, they'll turn out poor and fail to deliver the Disney promise in the end, because of Josh D'Amaro's leadership.
Last edited:
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
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https://www.ft.com/content/2f4c349b-058b-4c45-8d27-0a06845657f9
Shari Redstone and David Ellison plot complex finale to Paramount family drama
Interest from Skydance and other bidders could split shareholders in studio behind ‘The Godfather’
Anna Nicolaou and James Fontanella-Khan in New York and Christopher Grimes in Los Angeles
February 2 2024
The scions of two of America’s best-known billionaire families are scrambling to mastermind one of the most complex media mergers in recent memory, as the future of the storied Paramount studio hangs in the balance.
Skydance, a production company founded and run by David Ellison, is in negotiations with media mogul Shari Redstone to acquire National Amusements (NAI), a privately held cinema company that controls 77 per cent of Paramount’s voting stock.
After several weeks of talks, Skydance this week began preliminary due diligence on a potential deal, according to people familiar with the matter.
A combination would bring together Skydance’s growing independent studio with one of the most celebrated businesses in Hollywood. With its iconic lot on Melrose Place and 110-year old library of films from The Godfather and Chinatown to Titanic and The SpongeBob SquarePants Movie, Paramount is one of Tinseltown’s crown jewels. But it is also saddled with declining legacy television assets and a heavy debt load.
In some ways the two executives make for an odd pairing — Redstone, the 69-year-old Boston native and daughter of the late Sumner Redstone, is almost three decades older than the youthful, blonde-haired Ellison, son of Oracle co-founder Larry Ellison.
But in recent months they have bonded about what they have in common, according to people familiar with the talks, with both having spent the past decade trying to prove themselves under the shadow of their larger-than-life billionaire fathers.
Ellison entered Hollywood as an outsider and was initially viewed as an example of “dumb money” — wealthy individuals who naively invest in the glamour of entertainment. But he has proved himself by co-producing a number of hits, including Top Gun: Maverick and Mission Impossible, building Skydance into a $4bn company with investments from RedBird Capital, KKR, the Ellison family and Tencent.
A Paramount deal, if he is able to pull it off, would launch him into the upper echelon of power players in Hollywood.
Redstone, from the third generation of a family that helped inspire HBO’s Succession, has worked hard for years to confound sceptics who questioned her readiness to run the media group. Chief among them was her own father, who once told Forbes she had made “little or no contribution” to building the family empire.
Once she gained control of NAI in 2018, most in Hollywood believed Redstone was digging in to run it for years. Beginning last summer, however, she started talking to a few groups that had approached her about making a deal — including Skydance, according to people familiar with the situation.
Selling would mean relinquishing control of a company that has been in the family for nine decades.
It began as a handful of New England drive-in cinemas built by Redstone’s grandfather in the 1930s. Sumner Redstone, who would become one of Hollywood’s most eccentric characters and popularised the phrase “content is king”, transformed NAI into a global media empire, winning a battle with Barry Diller for control of the Paramount studio in 1994 and moving into television with acquisitions of Viacom and CBS.
Asked about Redstone’s willingness to entertain offers, people who have dealt with the mogul noted the tougher industry landscape as “cord-cutting” shrinks the traditional TV business. They also said she had been dedicating more of her time to fighting antisemitism following the October 7 Hamas attack on Israel. Redstone was given the Simon Wiesenthal Center’s humanitarian award last year.
Others, however, point to pressures on NAI as a factor behind her exploration of a sale.
The company is being looked at by other potential bidders. Private equity group Apollo recently expressed interest, while Paramount shares jumped as much as 13.5 per cent this week after media entrepreneur Byron Allen made a $14.3bn bid to buy all of the group’s outstanding shares, although there are questions about his ability to finance the deal.
But the talks with Skydance were the most advanced, according to one person familiar with the matter.
The deal being discussed is unusual, with Skydance planning to take control of Paramount by first acquiring NAI and then merging Paramount with Skydance. This is cheaper for Ellison than buying out the common stock of Paramount, which is worth more than $9bn, since it will not have to pay the same level of a premium to all shareholders. However, the process would be complicated.
“The structure that Skydance has proposed takes full advantage of Paramount’s dual-class structure, and unlike other reported potential match-ups, signals the Redstone family may be ready to cash out,” Bernstein analyst Laurent Yoon wrote in a recent report.
NAI, the investment group founded by Redstone’s grandfather, owns 73 cinemas, mostly in New England but with some in the UK, Brazil and Argentina. While it has long been modestly profitable, its main source of income is the generous dividend paid for its holdings of Paramount stock.
Like other cinema groups, NAI suffered through the Covid-19 pandemic, and its finances took a hit. As its cinemas business was losing money last year, Paramount slashed its dividend on the common shares from 24 cents to 5 cents — reducing a source of income for NAI and Redstone herself.
Share in Paramount jumped this week after Byron Allen made a bid to buy all of its outstanding shares © Patrick T Fallon/AFP/Getty Images
So Redstone turned to former Goldman Sachs banker Byron Trott, who helped raise $125mn in preferred stock for NAI. His firm, BDT, also arranged a $100mn shelf loan.
“They’ve been burning cash throughout the last year or so,” said Oliver Vande Stouwe, an analyst at S&P. “That’s why you saw them do this preferred equity raise in May — they needed some source of liquidity to continue operations.”
Rating agency Moody’s last week downgraded NAI’s debt by two notches to Caa1 citing “a heightened risk of default” on a $231mn term loan, in part because of a lighter slate of film releases after last year’s Hollywood strikes. Moody’s also warned that the Redstone vehicle had an “untenable debt capital structure”. Its next payment of $37mn is due in March.
Redstone’s father used his tax law training to concoct complex transactions including acquisitions of Viacom, Paramount Pictures and CBS. The deal under discussion with Ellison’s advisers would also be complex — and risk triggering lawsuits from Paramount shareholders, according to investors and analysts. If NAI were to be sold, the super voting class A shares would transfer to the new owner.
Mario Gabelli, a longtime media investor who is the second-largest holder of Paramount’s voting shares, told the Financial Times he was opposed to any deal that favoured one class of investor over another. “We’re going to speak loudly and carry a big stick” to protect common stockholders, he said.
The largest holder of Paramount’s B shares is Warren Buffett’s Berkshire Hathaway, which in 2022 disclosed a stake of
about 75mn shares at $28 per share — almost twice the share price today.
Trott, who has been advising Redstone, has previously also worked as an investment banker for Buffett.
Speculation about Paramount’s future heated up last autumn after its senior executives were granted golden parachute provisions that would kick in if the company were to be acquired. The shares rose by 39 per cent after the change of control provisions were disclosed but have since given up some of those gains.
Paramount has been viewed as a potential target for consolidation for several years. Investors and analysts believe the studio is too small to compete in a landscape dominated by much larger tech groups and media conglomerates. It has the highest debt-to earnings before interest, taxes, depreciation and amortisation ratio in the sector and, like other legacy media groups, is coping with declining TV assets while its streaming service, Paramount+, is still not profitable.
Skydance would be open to selling some assets, such as television network CBS, as part of an effort to restructure the company and monetise parts of the business that do not fit well together.
There is no guarantee that any of the potential bidders for Paramount will emerge with the Redstones’ crown jewel. But the primary question surrounding Paramount’s future appears to have been answered: Redstone is at least open to selling.
“Now that the market knows the Redstone family is open for business, the list of potential buyers could expand,” says Bernstein’s Yoon.
This story has been corrected to note Mario Gabelli is the second-largest holder of Paramount’s voting shares, rather than NAI’s.
Shari Redstone and David Ellison plot complex finale to Paramount family drama
Interest from Skydance and other bidders could split shareholders in studio behind ‘The Godfather’
Anna Nicolaou and James Fontanella-Khan in New York and Christopher Grimes in Los Angeles
February 2 2024
The scions of two of America’s best-known billionaire families are scrambling to mastermind one of the most complex media mergers in recent memory, as the future of the storied Paramount studio hangs in the balance.
Skydance, a production company founded and run by David Ellison, is in negotiations with media mogul Shari Redstone to acquire National Amusements (NAI), a privately held cinema company that controls 77 per cent of Paramount’s voting stock.
After several weeks of talks, Skydance this week began preliminary due diligence on a potential deal, according to people familiar with the matter.
A combination would bring together Skydance’s growing independent studio with one of the most celebrated businesses in Hollywood. With its iconic lot on Melrose Place and 110-year old library of films from The Godfather and Chinatown to Titanic and The SpongeBob SquarePants Movie, Paramount is one of Tinseltown’s crown jewels. But it is also saddled with declining legacy television assets and a heavy debt load.
In some ways the two executives make for an odd pairing — Redstone, the 69-year-old Boston native and daughter of the late Sumner Redstone, is almost three decades older than the youthful, blonde-haired Ellison, son of Oracle co-founder Larry Ellison.
But in recent months they have bonded about what they have in common, according to people familiar with the talks, with both having spent the past decade trying to prove themselves under the shadow of their larger-than-life billionaire fathers.
Ellison entered Hollywood as an outsider and was initially viewed as an example of “dumb money” — wealthy individuals who naively invest in the glamour of entertainment. But he has proved himself by co-producing a number of hits, including Top Gun: Maverick and Mission Impossible, building Skydance into a $4bn company with investments from RedBird Capital, KKR, the Ellison family and Tencent.
A Paramount deal, if he is able to pull it off, would launch him into the upper echelon of power players in Hollywood.
Redstone, from the third generation of a family that helped inspire HBO’s Succession, has worked hard for years to confound sceptics who questioned her readiness to run the media group. Chief among them was her own father, who once told Forbes she had made “little or no contribution” to building the family empire.
Once she gained control of NAI in 2018, most in Hollywood believed Redstone was digging in to run it for years. Beginning last summer, however, she started talking to a few groups that had approached her about making a deal — including Skydance, according to people familiar with the situation.
Selling would mean relinquishing control of a company that has been in the family for nine decades.
It began as a handful of New England drive-in cinemas built by Redstone’s grandfather in the 1930s. Sumner Redstone, who would become one of Hollywood’s most eccentric characters and popularised the phrase “content is king”, transformed NAI into a global media empire, winning a battle with Barry Diller for control of the Paramount studio in 1994 and moving into television with acquisitions of Viacom and CBS.
Asked about Redstone’s willingness to entertain offers, people who have dealt with the mogul noted the tougher industry landscape as “cord-cutting” shrinks the traditional TV business. They also said she had been dedicating more of her time to fighting antisemitism following the October 7 Hamas attack on Israel. Redstone was given the Simon Wiesenthal Center’s humanitarian award last year.
Others, however, point to pressures on NAI as a factor behind her exploration of a sale.
The company is being looked at by other potential bidders. Private equity group Apollo recently expressed interest, while Paramount shares jumped as much as 13.5 per cent this week after media entrepreneur Byron Allen made a $14.3bn bid to buy all of the group’s outstanding shares, although there are questions about his ability to finance the deal.
But the talks with Skydance were the most advanced, according to one person familiar with the matter.
The deal being discussed is unusual, with Skydance planning to take control of Paramount by first acquiring NAI and then merging Paramount with Skydance. This is cheaper for Ellison than buying out the common stock of Paramount, which is worth more than $9bn, since it will not have to pay the same level of a premium to all shareholders. However, the process would be complicated.
“The structure that Skydance has proposed takes full advantage of Paramount’s dual-class structure, and unlike other reported potential match-ups, signals the Redstone family may be ready to cash out,” Bernstein analyst Laurent Yoon wrote in a recent report.
NAI, the investment group founded by Redstone’s grandfather, owns 73 cinemas, mostly in New England but with some in the UK, Brazil and Argentina. While it has long been modestly profitable, its main source of income is the generous dividend paid for its holdings of Paramount stock.
Like other cinema groups, NAI suffered through the Covid-19 pandemic, and its finances took a hit. As its cinemas business was losing money last year, Paramount slashed its dividend on the common shares from 24 cents to 5 cents — reducing a source of income for NAI and Redstone herself.
Share in Paramount jumped this week after Byron Allen made a bid to buy all of its outstanding shares © Patrick T Fallon/AFP/Getty Images
So Redstone turned to former Goldman Sachs banker Byron Trott, who helped raise $125mn in preferred stock for NAI. His firm, BDT, also arranged a $100mn shelf loan.
“They’ve been burning cash throughout the last year or so,” said Oliver Vande Stouwe, an analyst at S&P. “That’s why you saw them do this preferred equity raise in May — they needed some source of liquidity to continue operations.”
Rating agency Moody’s last week downgraded NAI’s debt by two notches to Caa1 citing “a heightened risk of default” on a $231mn term loan, in part because of a lighter slate of film releases after last year’s Hollywood strikes. Moody’s also warned that the Redstone vehicle had an “untenable debt capital structure”. Its next payment of $37mn is due in March.
Redstone’s father used his tax law training to concoct complex transactions including acquisitions of Viacom, Paramount Pictures and CBS. The deal under discussion with Ellison’s advisers would also be complex — and risk triggering lawsuits from Paramount shareholders, according to investors and analysts. If NAI were to be sold, the super voting class A shares would transfer to the new owner.
Mario Gabelli, a longtime media investor who is the second-largest holder of Paramount’s voting shares, told the Financial Times he was opposed to any deal that favoured one class of investor over another. “We’re going to speak loudly and carry a big stick” to protect common stockholders, he said.
The largest holder of Paramount’s B shares is Warren Buffett’s Berkshire Hathaway, which in 2022 disclosed a stake of
about 75mn shares at $28 per share — almost twice the share price today.
Trott, who has been advising Redstone, has previously also worked as an investment banker for Buffett.
Speculation about Paramount’s future heated up last autumn after its senior executives were granted golden parachute provisions that would kick in if the company were to be acquired. The shares rose by 39 per cent after the change of control provisions were disclosed but have since given up some of those gains.
Paramount has been viewed as a potential target for consolidation for several years. Investors and analysts believe the studio is too small to compete in a landscape dominated by much larger tech groups and media conglomerates. It has the highest debt-to earnings before interest, taxes, depreciation and amortisation ratio in the sector and, like other legacy media groups, is coping with declining TV assets while its streaming service, Paramount+, is still not profitable.
Skydance would be open to selling some assets, such as television network CBS, as part of an effort to restructure the company and monetise parts of the business that do not fit well together.
There is no guarantee that any of the potential bidders for Paramount will emerge with the Redstones’ crown jewel. But the primary question surrounding Paramount’s future appears to have been answered: Redstone is at least open to selling.
“Now that the market knows the Redstone family is open for business, the list of potential buyers could expand,” says Bernstein’s Yoon.
This story has been corrected to note Mario Gabelli is the second-largest holder of Paramount’s voting shares, rather than NAI’s.
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
- Messages
- 6,467
This isn't DIS related, but then it sorta is. If individual conferences within college sports can kiss off the NCAA, one of these days, individual schools could also declare independence. IMO, this is a direct result of the proliferation of media availability. Streaming. Just like anyone with a cellphone camera could be the next Alfred Hitchcock and migh compete with billion-dollar studios' products.
https://www.cbssports.com/college-f...-ncaa-figure-it-out-or-well-go-off-ourselves/
SEC, Big Ten 'advisory group' stands as coded threat to NCAA: Figure it out, or we'll go off ourselves The power conference may well reshape college athletics in their image
By Dennis Dodd
Feb 2, 2024 - 5:04 pm EST
The SEC and Big Ten delivered a coded, read-between-the-lines message to college athletics in a 259-word release on Friday: We got this.
Essentially, the two most powerful conferences on the planet told everyone else to step aside. They're going to figure out the future of college athletics themselves. They're done waiting for Congressional intervention or NCAA action.
The future of college athletics will be at least influenced -- but probably dictated -- by the SEC and Big Ten. They have most of the money, talent, recruiting, facilities and brands at their disposal.
If the process hurts feelings or damages egos, so be it. If that means collectively bargaining with players and paying them for their athletic ability through revenue sharing ... well, that's on the table, too.
The SEC and Big Ten are among those who have waited too long. Now they have the ability to change the landscape themselves.
The joint announcement used careful wording like forming an "advisory group" to address "significant challenges in college athletics." This isn't the announcement of a scheduling agreement or another version of an ill-fated "alliance."
The duo is targeting some more significant matters; they made sure to reference "recent court decisions, pending litigation, a patchwork of state laws."
That's really what this is about -- eliminating the consternation about an endless conga line of litigation regarding name, image and likeness, antitrust, transfers, etc.
In essence, the two leagues are aiming to remodel what is left of the collegiate model. Don't like it? Well, you don't have to. If NCAA membership doesn't agree to their reforms, the SEC and Big Ten have the leverage to take their 34 teams and stage their own national championship. The networks and the market itself have told them that is possible, and it's a path which SEC commissioner Greg Sankey has already hinted at in the past.
If that means a velvet hammer -- Friday's release -- leading to a chaotic breakaway of the two leagues, that's an option, too. It's just unlikely to be one that is explored right away. Sankey and Big Ten commissioner Tony Petitti would certainly like to affect change within the system first.
The SEC commissioner has left breadcrumbs leading us to this day. In June 2023, he criticized the composition of the NCAA Board of Governors, calling them out for having too little Power Five representation.
The state of Tennessee this week filed a lawsuit against the NCAA that exposed a horizon where you can see an end to the NCAA if it doesn't change. And if there is no change, the "Power Two" will change it for them.
For his role, Petitti probably just needed time to get on board after taking over as conference commissioner in May. The irony is that, historically, the SEC and Big Ten have been rivals. Former respective commissioners Mike Slive and Jim Delany viewed each other respectfully from a distance, but their legislative and financial interests were strictly their own.
Now, there is too much money and power at stake for them not to join brands. The best rivalries worth watching mostly now reside in these two conferences. Those rivalries translate to television ratings, which translate to revenue.
Thank you, conference realignment.
The landscape has forced them together to flex at this moment, so let the mind wander as to the extent of their power grab.
The NCAA likes to say it is only enforcing rules as voted on by membership. As sports law attorney Mit Winter recently noted: That doesn't matter when the rules themselves break federal law.
Not a good thing when there are two not-so-new sheriffs in town.
https://www.cbssports.com/college-f...-ncaa-figure-it-out-or-well-go-off-ourselves/
SEC, Big Ten 'advisory group' stands as coded threat to NCAA: Figure it out, or we'll go off ourselves The power conference may well reshape college athletics in their image
By Dennis Dodd
Feb 2, 2024 - 5:04 pm EST
The SEC and Big Ten delivered a coded, read-between-the-lines message to college athletics in a 259-word release on Friday: We got this.
Essentially, the two most powerful conferences on the planet told everyone else to step aside. They're going to figure out the future of college athletics themselves. They're done waiting for Congressional intervention or NCAA action.
The future of college athletics will be at least influenced -- but probably dictated -- by the SEC and Big Ten. They have most of the money, talent, recruiting, facilities and brands at their disposal.
If the process hurts feelings or damages egos, so be it. If that means collectively bargaining with players and paying them for their athletic ability through revenue sharing ... well, that's on the table, too.
The SEC and Big Ten are among those who have waited too long. Now they have the ability to change the landscape themselves.
The joint announcement used careful wording like forming an "advisory group" to address "significant challenges in college athletics." This isn't the announcement of a scheduling agreement or another version of an ill-fated "alliance."
The duo is targeting some more significant matters; they made sure to reference "recent court decisions, pending litigation, a patchwork of state laws."
That's really what this is about -- eliminating the consternation about an endless conga line of litigation regarding name, image and likeness, antitrust, transfers, etc.
In essence, the two leagues are aiming to remodel what is left of the collegiate model. Don't like it? Well, you don't have to. If NCAA membership doesn't agree to their reforms, the SEC and Big Ten have the leverage to take their 34 teams and stage their own national championship. The networks and the market itself have told them that is possible, and it's a path which SEC commissioner Greg Sankey has already hinted at in the past.
If that means a velvet hammer -- Friday's release -- leading to a chaotic breakaway of the two leagues, that's an option, too. It's just unlikely to be one that is explored right away. Sankey and Big Ten commissioner Tony Petitti would certainly like to affect change within the system first.
The SEC commissioner has left breadcrumbs leading us to this day. In June 2023, he criticized the composition of the NCAA Board of Governors, calling them out for having too little Power Five representation.
The state of Tennessee this week filed a lawsuit against the NCAA that exposed a horizon where you can see an end to the NCAA if it doesn't change. And if there is no change, the "Power Two" will change it for them.
For his role, Petitti probably just needed time to get on board after taking over as conference commissioner in May. The irony is that, historically, the SEC and Big Ten have been rivals. Former respective commissioners Mike Slive and Jim Delany viewed each other respectfully from a distance, but their legislative and financial interests were strictly their own.
Now, there is too much money and power at stake for them not to join brands. The best rivalries worth watching mostly now reside in these two conferences. Those rivalries translate to television ratings, which translate to revenue.
Thank you, conference realignment.
The landscape has forced them together to flex at this moment, so let the mind wander as to the extent of their power grab.
- They could easily combine to carve out a piece of their media rights revenue to share with athletes.
- They could decide -- essentially on their own -- to offer 100 scholarships instead of 85.
- They almost certainly will demand an unequal share of revenue when the new College Football Playoff media rights contract is signed.
- They could sign up a title sponsor for their endeavors to draw in even more revenue. The CFP and Final Four don't even do that.
The NCAA likes to say it is only enforcing rules as voted on by membership. As sports law attorney Mit Winter recently noted: That doesn't matter when the rules themselves break federal law.
Not a good thing when there are two not-so-new sheriffs in town.
When Universal expanded and did Islands of Adventure (I think that was the park), Disney had a secret plan to green light certain expansions should it have been a major hit. It included the last serious attempt to build Beastly Kingdomme for example.
I wouldn’t be surprised if history is repeating itself. They might be saying let’s wait and see what happens.
I think a fifth gate is unlikely. I think more Epcot renovations and expansion are possible. Animal Kingdom getting significant work as well. Animal Kingdom could throw in Indiana Jones, add a Central America retheme of the Shanghai Pirates ride system, etc. Disney has plenty of successful rides they could rebuild in Orlando and call it a day. As the days of corporate sponsorship have been waning, finding global scale for building attractions has increased.
Maybe beyond big thunder being built out too but I’m skeptical.
I wouldn’t be surprised if history is repeating itself. They might be saying let’s wait and see what happens.
I think a fifth gate is unlikely. I think more Epcot renovations and expansion are possible. Animal Kingdom getting significant work as well. Animal Kingdom could throw in Indiana Jones, add a Central America retheme of the Shanghai Pirates ride system, etc. Disney has plenty of successful rides they could rebuild in Orlando and call it a day. As the days of corporate sponsorship have been waning, finding global scale for building attractions has increased.
Maybe beyond big thunder being built out too but I’m skeptical.
wabbott
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They need to announce a Disney Sea fifth gate tomorrow morning. They've already got a set of plans. Money? Easy-peasy. Announce the sale of ABC at the same time.
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Not sure why you think Josh would do a bad job with expansion plans. But hey, why not go ahead and pre-judge the result.
Agree that a 5th gate is unlikely. People like to tout the need for one but the fact is that there is lots of undeveloped land at the existing 4 parks that can be used without the need for added infrastructure and the related supporting organizations.
I have a hard time visualizing just what might go in that area, but then I'm not a creative type. It's certainly a large tract of land that could be used for something. Would it have to retain the Frontier Land theming? Or could it be something else entirely?
Not happening. While the sale of ABC TV stations might be happening sometime, the ABC network programming wouldn't be a part of the sale.
Disney Sea would immediately be trashed by some of the same critics as just being a rehash of something rather than a completely new concept.
wabbott
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It would be completely new to the many that visit WDW but have never been to Tokyo.
wabbott
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Probably accurate. Iger will hold on to the ABC "network" until it fades into obscurity along with all the other alphabet networks.
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