Paramount Global explored mergers and partnerships with several entertainment companies, including Warner Bros Discovery (WBD), Allen Media Group and Comcast, before ultimately making a deal with Skydance Media earlier this year, the entertainment conglomerate revealed in a regulatory filing this week.
In the document filed with the U.S. Securities and Exchange Commission on Monday, executives at a forthcoming Paramount subsidiary called “New Pluto TV” revealed the company, its board and financial advisors held high-level discussions with two industry peers on various financial and non-financial terms that could have opened the door to a merger or joint venture.
The companies were identified in the regulatory filing as “Party A” and “Party B.” The Desk has confirmed Party A to be WBD, and Party B to be Comcast. Bloomberg earlier reported on the filing and the identity of the companies.
The filing indicates WBD was in the best position to submit a competitive bid to merge some or all of its entertainment assets with Paramount, relative to the agreement that Paramount ultimately secured from Skydance Media.
WBD CEO David Zaslav first met with then-Paramount CEO Bob Bakish about a possible acquisition or merger as early as last December, the filing noted. When the first of those talks were held, Paramount’s largest shareholder, National Amusements, had been engaged with Skydance Media about a possible tie-up of those two businesses, though precise terms had not been settled upon.
The first of many talks between WBD and Paramount was held on December 19, when Zaslav and Bakish met in New York. One day later, news of the meeting leaked to financial news outlet Axios.
Despite the leak, the conversations continued. At the same time, Paramount continued exploring a plan that was in development between National Amusements and Skydance, and scrutinized offers from other parties, including Comcast.
The conversations with all parties resulted in a situation where Paramount was interested in having WBD acquire some or all of its entertainment business for cash, at a valuation that WBD felt was too high.
The talks with Comcast largely centered around a tie-up of streaming services Paramount Plus and Peacock. In one early conversation, Comcast CEO Brian Roberts offered to license Paramount’s TV shows and movies for Comcast’s streaming service Peacock. Those discussions evolved into one focused on a streaming joint venture that would see Paramount and Peacock’s content libraries merged into a single platform. As described, the plan sounded identical to Sky Showtime, Paramount and Comcast’s European joint venture.
The board closely considered those plans, as well as one from Apollo Global Management that valued Paramount’s entertainment properties at $11 billion. But Paramount’s board felt Skydance Media acted with more urgency, and ultimately went with them.
Other bidders were also considered between late 2023 and this past summer, including a January 30 offer from Allen Media Group, the entertainment company operated by comedian and businessman Byron Allen. The offer involved a commitment from Allen Media to acquire all outstanding share of Paramount’s Class A stock for $28.58 per share and Class B stock for $21.53 per share, representing a premium of 47 percent (Class A) and 53 percent (Class B), the regulatory filing said.
A special committee arranged by Paramount’s board to weigh potential bids considered Allen Media’s offer one day after it was submitted. While Allen Media committed to financing the offer through a combination of senior secured debt, senior unsecured notes and equity, the committee felt the offer lacked specific details.
Committee members also expressed concern over numerous past bids made by Allen Media and its CEO to acquire other companies, including broadcast assets owned by TEGNA and the Walt Disney Company, none of which materialized into serious discussions.
For Paramount, it was not the first time Allen Media had approached the company: He previously expressed interest in acquiring BET Media, which includes cable networks BET and VH1, though the offer came in lower than Paramount was prepared to accept. (Ultimately, Paramount scrutinized a number of bids from Allen Media and others, before deciding not to sell BET Media.)
Still, the committee was willing to hear Allen Media out, and sent the company a non-disclosure agreement to get the process started. Allen Media never executed the contract, and didn’t provide any additional feedback or engage further on its January 30 offer, Paramount said.
More than a half-dozen other companies were engaged at some point over the last year, including Apollo Global Management, Sony Pictures and former WarnerMusic chairman Edgar Bronfman, Jr., but none of the offers were more compelling than what was on the table with Skydance Media at any point in the process.
