Could a Sony-Apollo Joint Bid Stop a Paramount Shareholder Revolt? | Analysis

Paramount Global majority shareholder Shari Redstone may by convinced that David Ellison’s Skydance Media is the company best suited to buy the venerable Hollywood company. But don’t count out Apollo Global Management just yet.

On Thursday, TheWrap learned that Sony Pictures has been in talks with Apollo about making a joint bid to acquire the Melrose studio, just weeks after the private equity firm made a solo offer to purchase Paramount for $26 billion, including the assumption of debt.

The Sony news quickly sent shares of Paramount up more than 11% in after-hours trading.

The potential bid comes as investors are staging a near-revolt against Paramount Global’s board — and a special committee of directors set up by majority shareholder Shari Redstone to consider bids — for its seeming insistence on only pursuing a deal for Skydance to buy the company. Some shareholders are threatening litigation if Redstone doesn’t also consider the Apollo bid, which they see as the superior financial deal. 

Sony and Apollo cannot submit a joint bid until after a 30-day exclusive negotiation window between Paramount and production partner Skydance ends on May 3. As TheWrap also reported on Thursday, Paramount and Skydance are not expected to close a deal before the exclusivity window ends, but negotiations are still moving forward. 

Representatives for Sony Pictures declined to comment. The New York Times first reported the potential joint bid.

If the bid is made and accepted, Sony is expected to add Paramount to its collection of labels that includes Columbia Pictures, TriStar and Stage6, among others. 

A Sony acquisition of Paramount would continue the recent trend of studio consolidation that began with Disney’s acquisition of 20th Century Fox in 2019 and continued with Amazon’s purchase of MGM in 2022. While Amazon has used the theatrical distribution structure of MGM to release films like Ben Affleck’s “Air” and Luca Guadagnino’s “Challengers” in theaters, the number of wide-release films in cinemas is likely to decrease with fewer studios in operation.

It is unclear how much of Paramount’s planned theatrical output would be reduced if it became a Sony-owned label. But some reduction likely would be baked in as Sony would be unable to provide full distribution and marketing support for 16 films — the number of movies Paramount released in 2023 — on top of the films it already releases through other labels. 

Sony Pictures is currently set to release 25 films in limited and wide release in 2024.

Sony’s entertainment division — which includes Columbia Pictures, Sony Pictures Television, Crunchyroll and Playstation — comprised more than 50% of the Japanese corporation’s annual revenue of $85.4 billion in 2023. In its fiscal third quarter, Sony Pictures earned a profit of $281 million, up 57% from the year-ago period, on revenue $2.43 billion, up 10%.

In February, Sony seemed to underscore the film division’s importance when it promoted Bob Lawson, the EVP and chief communications officer at Sony Pictures, to SVP in charge of corporate communications for the entire Japanese media and tech company. Lawson was expected to move to Tokyo to assume the role and report to CEO Kenichiro Yoshida.

A deal involving Sony would likely face more regulatory scrutiny from Washington, D.C., than a Skydance purchase because of the high concentration of film and TV production and distribution assets a combined Sony-Paramount would control. And it is unclear whether Redstone would see it as more palatable than a purchase by only Apollo of all of Paramount Global. The New York-based private equity giant is more likely, given its history and acquisition strategy, to break up Paramount and sell it off in parts, analysts have said.

Redstone, Paramount’s non-executive chairwoman, has been shopping the struggling company for months but is focused on finding a buyer that will buy and maintain the entire company and not just its coveted film and television studios. Paramount’s stock price has withered under a heavy debt load, money-losing linear TV assets and an unprofitable streamer.

The proposed bid from Skydance, which would be backed by fresh capital from a consortium of investors that includes Oracle cofounder Larry Ellison, RedBird Capital Partners and KKR, would involve Skydance acquiring control of Paramount through Redstone’s National Amusements, which holds a controlling share. 

News of the Apollo talks with Sony is likely to add tension to Paramount’s first quarter earnings call on April 29. With merger talks swirling around the company the past few months, CEO Bob Bakish has tried to focus Wall Street analysts on the company’s organic performance and efforts to turn streamer Paramount+ profitable. 

At CinemaCon in Las Vegas last week, Paramount executives made a flurry of film announcements for 2025 and 2026 projects, including a live-action comedy from “South Park” creators Matt Stone and Trey Parker as well as famed rapper Kendrick Lamar. The studio also said it would release Damien Chazelle’s next film next year, along with revivals of the “Scary Movie” and “Naked Gun” series. Paramount is also expanding the presence of “Teenage Mutant Ninja Turtles” in theaters with an R-rated adaptation of acclaimed comic miniseries “The Last Ronin.”

The studio also gave attendees a first look at “Gladiator II,” a sequel to one of Ridley Scott’s biggest critical and commercial hits. Paramount is setting up the film as its Thanksgiving offering. It will mark the blockbuster debut of Paul Mescal, the star of “Aftersun” and “All of Us Strangers.”

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