Over 3 Decades Later, Barry Diller Takes Another Swing at Paramount | Analysis

Legendary media mogul Barry Diller is taking one more crack at Paramount, the studio that got away.

In the early 1990s, Diller lost a bid to buy the studio — to then-Viacom chief Sumner Redstone.

Now 82, Diller is back in the game, exploring a bid to take control of a far more-troubled Paramount Global, an individual with knowledge told TheWrap on Monday.

Diller’s company IAC has signed nondisclosure agreements with National Amusements, the holding company of Paramount’s controlling shareholder Shari Redstone, an individual confirmed to TheWrap. The New York Times first reported the story.

The potential bid comes after Redstone, who is Sumner Redstone’s daughter, scrapped a deal with David Ellison’s Skydance Media last month to acquire NAI and merge with the Hollywood studio. While both sides agreed to the economic terms of the deal, there were outstanding issues they did not agree on — most notably, giving all shareholders a consent vote on the sale.

Representatives for National Amusements, Paramount and IAC all declined to comment to TheWrap. Diller was said to be out of reach on a yacht in Europe – as media moguls are meant to be in July.

The emergence of Diller, a billionaire who led Paramount Pictures in the heyday of broadcast television in the 1970s and 1980s, could be the missing link for Shari Redstone. She initially favored a deal with Skydance because Ellison offered more promises of keeping the company together — even though the deal was far less-lucrative for Paramount shareholders than a $26 billion all-cash bid by an alliance of Sony Pictures Entertainment and Apollo Global Management.

Redstone’s desire to keep the company largely intact — rather than allowing it to be sold for parts as Wall Street analysts have speculated it should be — has featured prominently in negotiations among prospective buyers, National Amusements and Paramount’s special board committee evaluating deals.

But Diller has special history with this studio.

He was CEO of Paramount Pictures from 1974 to 1984. Under his tenure, the studio produced popular TV series such as “Laverne & Shirley” and “Cheers” and films including “Saturday Night Fever,” “Grease” and “Raiders of the Lost Ark.” 

In 1983, he was also named president of the company’s Entertainment and Communications Group, which included Simon & Schuster, Inc., Madison Square Garden Corporation and SEGA Enterprises, Inc. 

Then from 1984 to 1992, Diller left, serving as chairman and CEO of Fox Inc. and was responsible for creating Fox Broadcasting Company in addition to Fox’s motion picture operations. 

In the early ’90s, he made his unsuccessful bid for Paramount Communications. At the time, referring to Redstone’s winning offer to buy the legendary studio from Gulf+Western, Diller said in a statement: “They won. We lost. Next.”

Diller is also credited with mentoring a stellar group of Hollywood executives, dubbed “The Killer Dillers,” who later became power brokers themselves. They included Michael Eisner, who was president of Paramount Pictures and later chairman and CEO of Disney; Jeffrey Katzenberg, Paramount’s head of production under Diller and then a co-founder of DreamWorks SKG; and Dawn Steel, who went on to serve as president of Columbia Pictures.

In 1995, Diller founded IAC, an internet and media conglomerate that owns brands across 100 countries, including platforms like Tinder, print and digital publisher Dotdash Meredith and the website Care.com. The company acquired the assets of Silver King Broadcasting in 1996, which owned the Home Shopping Network, and USA Network in 1997. He is currently the chairman and senior executive of IAC and Expedia Group. 

Forbes has pegged Diller’s net worth at $4.1 billion. 

Paramount still in play

Paramount has been in play since last year. Skydance had an exclusive 30-day negotiating window with National Amusements, but last month Redstone decided she no longer wanted to proceed with a deal. NAI controls some 77% of Paramount’s voting stock.

In addition to Skydance and the Sony-Apollo bid, Allen Media Group founder Byron Allen also placed a $30 billion bid including debt, though it is unclear how that bid would be financed. Warner Bros. Discovery CEO David Zaslav also has met with former Paramount CEO Bob Bakish about a potential merger, but those talks were later halted. 

Separately, NAI has received two separate expressions of interest from “Baby Geniuses” producer Steven Paul and former Warner Music Group CEO and chairman Edgar Bronfman Jr.

According to an individual close to Redstone, all three bids are currently in play.

While Redstone weighs her options, Paramount is currently being run by three co-CEOs —Brian Robbins, Chris McCarthy and George Cheeks — who replaced Bakish after he stepped down in April. 

The trio has outlined a long-term strategic plan that includes $500 million in cost cuts, divesting assets and teaming up with other streamers or technology platforms on a streaming joint venture or long-term partnership. CNBC reported on Monday that Warner Bros. Discovery is among the companies considering a potential streamer merger with Paramount+ and Max.

During a town hall with employees last week, the Paramount executives revealed they have started cutting costs, including in legal and corporate marketing, though they did not reveal a timeline nor confirm how many employees could be impacted. 

They’ve also hired bankers to help with asset sales, which could potentially include Pluto TV, BET, VH1 and the Paramount studio lot, which would be leased back for the studio’s use, four individuals familiar with the matter previously confirmed to TheWrap. 

The company also said it was continuing talks with potential partners in international markets that will “significantly transform the scale and economics” of its streaming business, which is currently on track to reach domestic profitability in 2025. 

Paramount, which has a market capitalization of $6.97 billion, saw its shares climb over 3% in after-hours trading on Monday. The stock has fallen 29% in the past six months and 37% in the past year. The company also faces $14.6 billion in long-term debt and its credit rating has been downgraded to junk status.

Paramount’s co-CEOs will update Wall Street on its long-term strategic plan during its second quarter earnings call.

Additional reporting by Sharon Knolle, Lucas Manfredi and Sharon Waxman.

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