Paramount Global has decided to keep all of BET Media for itself after it determined that offloading a majority stake to a third party would not have a material impact on its balance sheet, according to a report.
On Wednesday, the Wall Street Journal cited several anonymous sources who claimed Paramount has fully abandoned its plan to sell a significant chunk of BET Media, which included the BET and VH1 cable channels and part of BET Plus, a streaming service it operates in partnership with actor and comedian Tyler Perry.
Paramount had sought at least $3 billion for the Black-centric media enterprise, which was acquired by its predecessor Viacom for more than $2 billion in 2000.
Despite affirming an interest to sell of some media assets, Paramount executives never actually confirmed they were soliciting interest in BET Media, though the process eventually played out in media reports based on leaked information.
According to those leaks, the company attracted a number of parties interested in BET Media, including retired basketball star Shaquille O’Neal, rap artists 50 Cent and Sean “Diddy” Combs, and media mogul Byron Allen.
Despite the interest, most bids for BET Media were priced under the $3 billion valuation that Paramount placed on the business. Eventually, executives determined any sale of BET Media would not result in a material deleveraging of the company’s balance sheet, the WSJ said on Wednesday.
Like other media companies, Paramount has experience turbulence across multiple fronts, including substantial losses in its premium, direct-to-consumer streaming business and a decline in ad revenue amid fears of a looming or ongoing recession.
Paramount has also struggled to cope with the loss of viewers to its cable channels (which, in addition to BET and VH1, include Comedy Central, Paramount Network, Nickelodeon, CMT, TV Land and others) as more American households ditch expensive cable and satellite services for cheaper streaming options.
With fewer people watching cable and satellite, the expectation that BET Media would fetch anything above $3 billion was tough for some to wrap their minds around. Allen, who owns the Weather Channel and several local TV stations, bid $2.7 billion for BET Media earlier this year, according to the New York Post. His was the highest, besting Perry’s bid by around $700 million, the Post reported. (The New York Post and the Wall Street Journal, which have broken the most stories on the BET Media saga, share common ownership but are operated as separate businesses.)
Paramount’s valuation of $3 billion was about 10 times what the company earned in revenue before interest, taxes, depreciation and amortization (EBTIDA), according to the Post, citing unnamed sources.