Apollo Global Management Eyes Paramount Global

Paramount Global, the conglomerate that owns the storied 112-year-old film studio behind “The Godfather” and “Titanic,” is at the center of a bidding contest.

Private equity firm Apollo Global Management recently emerged with an $11 billion offer that tops Paramount’s market cap—$7.8 billion as of March 22—by 37.5%.

But Apollo only wants Paramount Pictures and is reportedly uninterested in other key holdings, which include cable networks BET, Comedy Central, Nickelodeon, and MTV. The New York-based financial giant, which manages more than $650 billion in assets, is also not looking to own either of Paramount Global’s streaming platforms, Paramount+ and Pluto TV.

Apollo’s bid underscores the latest trend in private equity: gobbling up entertainment assets. Over the past couple years, firms like KKR, RedBird Capital Partners, and BlackRock Alternatives have spent millions adding production companies to their respective portfolios. 

Whether Apollo can win the auction remains to be seen, as other interested parties are circling. On the sell side is Paramount chairperson Shari Redstone, whose family business, National Amusements Inc., owns a controlling 77% voting stake in Paramount Global. And Redstone is rumored to prefer doing a deal with KKR-backed Skydance Media, which wants to merge with Paramount Global in its entirety rather than break it up as Apollo proposes.

Byron Allen, CEO of Allen Media Group, is courting Redstone as well, with a $30 billion offer. And Paramount was also reportedly considering a merger with Warner Bros. Discovery.

M&A could “create shareholder value” and “it’s obviously something we are focused on,” Paramount CEO Bob Bakish noted on a February earnings call. A 3% workforce reduction, or what Bakish called “adjustments,” is also part of Paramount’s plan to boost shareholder value.

“These adjustments will help enable us to build on our momentum and execute our strategic vision for the year ahead—and I firmly believe we have much to be excited about,” he wrote in a February 13 memo to employees.

Paramount’s massive debt load, as of September, hovers at around $16.9 billion. The studio’s credit rating was lowered from BBB to BBB- in 2023. On the plus side, Paramount Pictures’ library includes a long list of money-making franchises including the “Transformers,” “Scream,” “Top Gun” and “Mission: Impossible” series.