Sony & Apollo join forces amid latest Paramount twist

Lawmen: Bass Reeves (Source: Paramount)

The ongoing saga around the future of Paramount Global has taken a new twist, with Sony Pictures Entertainment and private equity outfit Apollo Global Management reportedly eyeing a joint bid for the US studio.

According to the New York Times, which first reported the story, the pair are not in a position to submit a bid currently, given that Paramount is in exclusive talks with Skydance.

Bob Bakish (Source: MIPCOM)

Apollo had previously approached Paramount about a potential US$26bn acquisition of the company, including debt, but Paramount’s board preferred to initiate talks with Skydance amid uncertainty about how Apollo would finance the deal.

The investment firm had previously made a $11bn bid for Paramount’s studio arm.

Apollo’s hand will, however, potentially be strengthened by a tie-up with Sony, which brings financial muscle and a solid industry record to any combination.

According to the NYT, citing unnamed sources, Sony Pictures Entertainment CEO Tony Vinciquerra has held conversations with Apollo over the last week with a view to making an all-cash offer for Paramount itself, rather than the indirect route of acquiring National Amusements, Shari Redstone’s investment vehicle that controls 77% of Paramount’s voting stock. The latter approach is favoured by Skydance.

The Skydance talks have provoked pushback from some investors, who would be left with stock in a new company while Redstone secured cash for the acquisition of National Amusements.

The NYT reports that one possible option for Sony and Apollo would be for Sony to take a majority stake with Apollo as a minority partner.

Sony, unlike other Hollywood studios, has not invested in an expensive direct-to-consumer streaming play, and lacks the large portfolio of legacy cable channels that are delivering declining revenues for other media groups.

The news comes two weeks after Skydance entered exclusive talks with Paramount, following initial interest that emerged late last year.

Skydance was founded in 2010 by Ellison, son of Oracle co-founder Larry Ellison, and is backed by companies including All3Media’s prospective owner RedBird, KKR and China’s Tencent.

Paramount CEO Bob Bakish admitted in October that the Bass Reeves and Yellowstone firm is “playing through the trough” of a challenging market, putting partnerships and “new-age content licensing” at the heart of its strategy.

WBD’s chief David Zaslav and Paramount’s Bob Bakish also met up in New York City late last year to discuss a potential merger but reports in February claimed that those talks had come to an end.

US media mogul and The Weather Channel owner Byron Allen also made a $30bn offer to acquire the entirety of Paramount Global in January.