Paramount Global has hired a financial advisor to help it assess the sale of certain assets, the company’s three co-CEOs affirmed during a town hall meeting with employees on Tuesday.
The name of the investment firm was not revealed during the meeting, nor did the co-CEOs — Paramount Pictures CEO Brian Robbins, CBS CEO Chris McCarthy and Showtime and Paramount Media Networks CEO Brian Robbins — say which assets were potentially on the chopping block.
But the co-CEOs said the company needed to find around $500 million in annual cost savings in order to “help pay down debt and strengthen our balance sheet” and to make the company “move faster and be more nimble” amid a challenging environment and a renewed focus on generating more cash from direct-to-consumer streaming platforms.
Media reports over the past two years offer some insight into which assets Paramount might be willing to sell. The company has engaged in lengthy discussions with entertainment moguls and companies about a possible sale of some or all of BET Media, which includes the BET and VH1 cable channels as well as Paramount’s share in the streaming service BET Plus. Paramount reportedly abandoned its decision to sell BET Media last August after the company found it difficult to convince others to spend at least $3 billion for the venture.
Paramount’s portfolio of linear cable networks — which include Comedy Central, Nickelodeon, MTV, Paramount Network, Pop TV, TV Land and Logo — could also be up for grabs, as executives consider linear cable distribution to be less-lucrative compared to direct-to-consumer streaming over the long-term. Paramount’s intellectual property associated with the cable channels — including “The Daily Show” on Comedy Central and “SpongeBob SquarePants” on Nickelodeon — are favored more by executives who rely on that content to drive interest in Paramount Plus with Showtime and Pluto TV, but might need to be included in a sale of other Paramount-owned assets to sweeten the deal for a buyer.
International networks, including Network 10 in Australia and Channel 5 in the United Kingdom, are also likely up for sale, though it isn’t clear how much the company could earn from the divestiture of those assets. Channel 5 was acquired by Paramount’s predecessor, Viacom, in 2014. CBS acquired Network 10 in 2017, and the broadcaster was folded into Paramount Global two years later.
All options appear to be on the table, with McCarthy saying the company’s recent 61 percent decline in profit was “simply not acceptable.”
“We need to act now to reverse this trend,” McCarthy said at the town hall, which was attended by around 500 Paramount employees.
The other half of that strategy is leveraging international distribution of Paramount streaming services and intellectual property to generate additional revenue from territories where Paramount does not have a presence.
McCarthy said those talks will “significantly transform the scale and economics of the service making it profitable and driving long term value,” and could potentially “serve as a model for the U.S.,” which means it may also impact the long-term plans for Paramount Plus with Showtime and Pluto TV.
He offered few details on Paramount’s global tie-up with another company. Paramount already distributes its TV show and films through a joint venture with Comcast in Europe and North Africa called Sky Showtime. The streaming service is available in countries where Paramount and Comcast lack brand recognition or a business beyond a pay TV network.
