The refinancing included a $350 million Revolving Credit Facility that replaced the company’s existing revolving credit facility and matures on Dec. 1, 2029, as well as a $1.9 billion Term Loan B facility that matures on Dec. 1, 2031. Barclays, Deutsche Bank, JP Morgan, Wells Fargo, Goldman Sachs and Texas Capital served as arrangers and bookrunners for the loan.

The deal came after the most lucrative Thanksgiving box office weekend in industry history, with $426 million grossed between Wednesday and Sunday in North America. That is more than $100 million above the previous record of $315 million set on Thanksgiving weekend in 2018.

With a trio of films in Disney’s “Moana 2,” Universal’s “Wicked” and Paramount’s “Gladiator II” fueling the box office boom and films like Disney’s “Mufasa” and Paramount’s “Sonic the Hedgehog 3” set to keep the momentum going at Christmas, Regal and other theater chains are expecting box office grosses to keep improving in the months and years ahead.

“The overwhelmingly positive market reception for this transaction is a
signal of the momentum we are seeing in our business,” Regal Cineworld CEO Eduardo Acuna said in a statement. “In Q3, Regal Cineworld welcomed over
49 million guests to our theatres and generated total revenue of over $1
billion with record-high levels of spend per person on concessions.
With the refinancing transaction, we will save $60 million per year in
interest expense, which puts our successful restructuring squarely in the
past.”

The post Regal Cineworld Refinances Loan After Bankruptcy Restructuring Thanks to Thanksgiving Box Office appeared first on TheWrap.

David Ellison, who will run Paramount as chairman and CEO after the $8 billion transaction closes in the first half of 2025, is also looking to cut staff and trim the amount of original programming at the cable networks, the outlet reports.

As for leadership changes, Bloomberg reports that Paramount co-CEO George Cheeks is expected to stay following the merger, but co-CEO Brian Robbins is expected to depart the company, though a final decision hasn’t been made. The outlet added that the future of co-CEO Chris McCarthy, the third member of the “office of the CEO” remains “less certain.”

The Skydance chief may also explore strategic partnerships that could involve selling off the cable network, but Ellison is not open to selling off CBS, Bloomberg reports. He is also reportedly looking more closely at integrating free, ad-supported streamer Pluto TV into Paramount+.

An insider familiar with the matter emphasized to TheWrap that no decisions have been made.

Another insider familiar with the matter disputed the claim by Bloomberg about McCarthy, telling TheWrap he has been “instrumental” in making some of Paramount and Showtime’s biggest series, from “Yellowstone,” “Lioness,” “Tulsa King,” “Yellowjackets” and “Landman” to the currently running “The Agency” and the upcoming “Dexter: Original Sin.” The insider assured TheWrap that if McCarthy doesn’t end up staying, “he will for sure have options elsewhere.”

Ellison has reportedly discussed putting Skydance chief creative officer Dana Goldberg in charge of the film business. Skydance has hired former Sister global CEO Cindy Holland as an advisor to the company and she is seen as a likely candidate to take over the streaming business, Bloomberg reports.

Representatives for Skydance and Paramount declined to comment.

During a call with investors back in July, Ellison and Jeff Shell, who will serve as Paramount’s president, gave an initial outline for their plans to turn Paramount into a tech hybrid, leverage animation and sports content and rebuild the Paramount+ streaming service.

At the time, the leadership team also said they identified $2 billion in cost efficiencies and synergies as they look to manage Paramount’s declining linear business and would not rule out asset sales, though they did not cite specific assets that could be offloaded.

On that call, Shell referred to Pluto as a “very strong and powerful asset,” while RedBird Capital’s Andy Gordon said a merged Skydance and Paramount sees an opportunity in the tech platforms for Paramount+ and Pluto to drive “a lot more efficiency” and “further cash flow generation.” During a call with reporters in July, Shell referred to CBS as a “cornerstone” asset that would be part of its plans going forward.

The Paramount deal is currently being reviewed by the Federal Communications Commission. Petitions to deny the transaction are due by Dec. 16, while oppositions to petitions to deny must be filed no later than Jan. 2 and replies must be filed no later than Jan. 13.

Kayla Cobb contributed to this report

The post David Ellison May Fold Paramount TV Networks Into Single Unit, Co-CEO Brian Robbins Might Exit | Report appeared first on TheWrap.

Begleiter was let go from CAA after seven years in the agency’s recent round of executive-level layoffs. He was at UTA for 18 years before that.

“After serious consideration, it became clear to me that the opportunity to do something more entrepreneurial was ultimately undeniable. I’m excited to join the team at TFC,” Begleiter said in a Tuesday statement. “I am thrilled to work with exceptional friends and partners that I’ve spent my entire professional career getting to know and trust.”

TFC was launched in 2020 by Ben Jacobson and David Stone. Brittany Kahan Ward (who is taking part in TheWrap’s Power Women Summit) and Graciella Sanchez previously joined as partners in 2023.

“We’re so excited to welcome Joel to TFC. He’s an incredible advocate, a very well-liked and well-respected executive, and a longtime friend,” Jacobson and Stone added in a joint statement. “He brings with him not only a dynamic roster of clients, but a wealth of industry relationships and experience across a variety of mediums and genres.”

Deadline was first to report the news.

The post Former CAA Agent Joel Begleiter Boards TFC Management as Partner appeared first on TheWrap.

CEO Daniel Alegre said the move was “aimed at strengthening our position for 2025 and beyond” in a memo to staff, further noting that he wanted the Spanish-language media giant to transition to working more closely with clients. “Our partners’ needs are evolving, and we must serve them in ways no one else can in the market,” Alegre wrote.

The restructuring will impact a mid-high single digit percentage of the workforce, an insider familiar with the matter told TheWrap.

In the memo, the CEO announced Jesús Lara, the company’s Head of Local in the U.S., decided to leave the organization. That departure influenced the decision to reorganize the company’s U.S. local teams. Moving forward, U.S. advertising sales will fall under Donna Speciale, and Ignacio Meyer will oversee U.S. Audio and Local Programming. This is in addition to Meyer’s current role managing U.S. Linear Programming. Speciale and Meyer will communicate separately with the U.S. local teams.

“I want to express my deepest gratitude to Jesús Lara for his dedication, vision and contributions to TelevisaUnivision over the past eight years,” Alegre wrote. “He will work closely with Donna and Ignacio to ensure a smooth transition for the teams joining their organizations.”

On the content side, José Luis Fabila will lead strategy efforts and will create a newly formed Global Content Organization. Meyer will work closely with Fabila and will report to him. Additional team members who will report to Fabila include Rafael Urbina, who will oversee digital and streaming operations, performance marketing and CRM; and Olek Loewenstein, who will continue to lead the sports business unit.

“While these decisions are never easy, we are committed to supporting everyone through their transition,” Alegre concluded in his memo. “I understand that this will be a challenging week, but I ask for your focus and resilience as we take these important steps toward a stronger and more connected future.”

This restructuring isn’t unexpected. In October, Alegre stated that the “next phase” of TelevisaUnivision will focus on “further integration and operational optimization” during the company’s third quarter earning report. The CEO highlighted that he was prioritizing integrating these two legacy companies, evolving into a “platform-agnostic,” content-first company while capitalizing on the “unique access point” the corporation has to its Hispanic consumers.

At that time, Alegre revealed TelevisaUnivision was conducting a review of its investments and operations so it could “streamline and optimize resources.”

Variety was the first to report this story.

The post TelevisaUnivision Begins Layoffs as Part of Restructuring Plan appeared first on TheWrap.

A month into the season, the NBA’s ratings are down 28% on ESPN through Nov. 21. Meanwhile, the ratings for its games on TNT are flat at 1.8 million viewers per game, while ESPN is slightly behind at 1.77 million viewers per game. This comes after every major studio fell over itself vying for the rights to air NBA games this year, resulting in a $76 billion total deal.

What’s behind the league’s popularity decline? While it is tough blame any one factor, analysts say the NBA has too many regular-season games and lacks continuity, with players changing teams more frequently and teams changing uniform designs more often, which has confused and turned off some fans. The NBA’s social justice focus, starting with Black Lives Matter, made the league a target for conservative pundits and turned off right-leaning viewers. And the league and its players have shown a penchant for not valuing the regular season enough — coaches are still resting star players for long stretches to save them for the playoffs — which has further hurt fan engagement.

The ratings drop has been conspicuous — and potentially worrying — considering the NBA signed its 11-year, $76 billion TV deal this past summer. The new deal, which nearly triples the annual revenue the league brings in from its current contract, will see the league remain on Disney-owned ABC and ESPN, plus bring games to Amazon’s Prime Video and NBCUniversal, starting next year.

The NBA ratings decline comes amid a broader decline in cable TV viewership which is also affecting other sports, including college football and NHL. And Wall Street analysts said it’s too early to panic.

“All of these media partners have entered into long-term deals with the NBA, and I’d say they’re all very excited about the path ahead and the trajectory of the league,” MoffettNathanson senior analyst Robert Fishman told TheWrap. “And so any sort of short term ratings blip is really not what they’re focused on.”

Still, the networks bet big on basketball, and the ratings dip means the cost to acquire viewers is going up. The increasing premium placed on sports rights and live entertainment helped spur a bidding war for the NBA’s TV packages. At the same time, the rise of streaming added new deep-pocketed bidders to the market — ultimately leading to Amazon securing its NBA package for $1.8 billion per year.

The NBA’s acceptance of Amazon’s offer led the league to reject Turner’s bid, a move that severed a 38-year relationship with the network. That caused Turner parent company Warner Bros. Discovery to sue the NBA. The lawsuit was settled earlier this month, with WBD retaining rights to a few international markets and being able to license its popular “Inside the NBA” show to ABC starting next year. But WBD’s stock price took a hit when it lost the NBA and caused Wall Street analysts to speculate whether the company could prosper without it.

While it’s only been a month, the rating dip may well not be a blip. The NBA’s ratings have been heading in the wrong direction for several years now. ESPN’s first-month ratings are down 7% compared to the 1.9 million viewers the network averaged during the 2016-17 season. And the drop-off is even more severe than that, considering Nielsen started including out-of-home viewership from places like sports bars in its ratings in 2020. In other words, the ratings are beefed up compared to a decade ago — and the NBA still can’t match its past performance.

Why the new media partners should care

The ratings dip matters because it means the cost to acquire a viewer is rising for the league’s media partners.

Heading into this season, the NBA’s new deal averaged $12.12 per viewer. The networks are paying an average of $6.40 per viewer for Disney’s package to $25.45 per customer for Amazon’s package, according to Guggenheim research shared with TheWrap.

On average, that means the NBA’s new media partners are paying more than three times what the media partners for the National Football League pay per viewer.

The NFL’s most recent deal, signed in 2021, pays the league $110 billion over 11 years. It includes CBS, Fox, NBC, ESPN and Amazon as media partners. (Netflix also signed a deal with the NFL in May to broadcast two games on Christmas, starting this year. Each game cost the streamer $75 million.)

That “doesn’t necessarily mean [the NBA] is a bad deal,” Michael Morris, an analyst at Guggenheim Partners, told TheWrap. “Maybe the NFL is just a complete steal.”

It means, however, that if the NBA’s ratings continue to decline, its media partners will have to find ways to offset the increasing cost to acquire viewers.

“As ratings decline and the relative cost per viewer goes up, the pressure on generating additional revenue is greater in order to get the expected return on these rights investments,” Morris said.

Here, the media partners may have different strategies. ESPN and NBCU could look to double down on their sports betting operations in order to make more money from NBA viewers. Amazon, on the other hand, can leverage its expertise in online shopping to drive sales — a Lakers fan who is watching a game on Prime Video could easily be hit with an ad to buy an Anthony Davis jersey, for example.

But if the ratings continue to slide, networks will have to get more creative than that to make this new NBA deal look anywhere close to as good as the NFL’s.

The big issue

What is going on? Ethan Strauss, a sports and culture writer who covered the Golden State Warriors and now writes about the NBA on his House of Strauss Substack, believes the “core issue” behind the falloff is simple: How does the league make the players try harder? That “seems like a question you wouldn’t even be considering 15 years ago or even 10 years ago,” Strauss told TheWrap. “And it seems like it’s so mundane that you should be able to solve this problem.”

But it hasn’t been solved. Player effort and availability has been a thorn in the side of NBA Commissioner Adam Silver for years now. Spurs coach Gregg Popovich popularized a trend dubbed “load management” during the 2010s, where teams rest their star players during the regular season in order to keep them fresh for the playoffs. The NBA has tried to curb load management by adding games-played incentives to contracts and barring players who haven’t played enough games from being eligible for major awards. But the trend has held strong.

Before the start of the season, Philadelphia 76ers star Joel Embiid said he planned on never playing the second game of a back-to-back (where teams play games on consecutive nights) ever again. And Clippers star Kawhi Leonard has routinely sat out games, despite being healthy, during his career.

This, Strauss said, has delivered an unmistakable message to fans: The league and its players don’t value the regular season. And fans have responded by not tuning in as much.

“There’s just too much awareness that an individual game really doesn’t matter — that an individual game is one out of 82 and it’s important not to get injured, and it’s important to be there for the postseason,” Strauss said. “So you pick your spots.”

This should be a bigger concern for Wall Street analysts and league partners, he said, because it makes it less likely casual fans will tune in during the playoffs, when ratings are scrutinized more closely.

As Strauss put it: “It’s hard to get people to tune in for the season finale if they haven’t watched the show to that point.”

Other potential factors

There are other factors that are potentially pushing down ratings.

Social Justice: The NBA has been the most outwardly pro-social justice league among the three main sports in the U.S. The league allowed players to replace their last names on jerseys with phrases like “Black Lives Matter” and “I Can’t Breathe” after the death of George Floyd in 2020. The NBA also canceled games after players boycotted the death of Jacob Blake, a 29-year-old black man who was shot and paralyzed by police, after cops attempted to arrest him for breaking into the home of a woman he allegedly sexually assaulted. More recently, the league has tried to move away from social justice issues and be less political, although stars like LeBron James and Steph Curry publicly backed Kamala Harris for president. But the league’s pivot may have come too late. Strauss said the NBA’s social justice focus made it a “woke pinata” for conservative pundits to bash and simultaneously turned off some right-leaning viewers.

Too Much Inventory: There are too many games for fans to care about, many league observers have said. “There’s too much of it and it’s too available. [There’s] Nothing special about it,” Bill Simmons said on “The Town” podcast last month. The NBA’s 82-game season stands in stark contrast to the NFL’s 17-game season, which makes each regular season football game an event.

Style of Play: All NBA teams shoot way more three-pointers than they did a decade ago — something that’s been a byproduct of Curry’s revolutionary shooting range. Lakers legend Shaquille O’Neal said earlier this month that is bad for fans, though, because not //not? Or now?// every player can shoot like Curry. Now, “everybody’s looking at the same thing” when they watch an NBA game — a ton of long shots being jacked up.

Lack of Continuity: The NBA has made it hard for casual fans to follow the game in recent years because of added “noise,” as Strauss said. Teams now have several alternate jerseys and court layouts, and teams are not relegated to wearing lighter color jerseys at home anymore — making it hard for fans to tell which team is playing at home or on the road when watching on TV. Players also change teams more frequently than in decades past. And last season, the NBA added an “in-season tournament” that awards a trophy and cash to the winning team — a move that devalues its actual championship. The overall lack of continuity complicates matters for fans and makes it harder to follow the league.

Dearth of American Stars: Three of the top five players in the league, according to most experts, were born outside the States: Nikola Jokic (Serbia) of the Denver Nuggets, Luka Doncic (Slovenia) of the Dallas Mavericks, and Giannis Antetokounmpo (Greece) of the Milwaukee Bucks. The league, in this sense, has been a victim of its own success in its multi-decade push to make basketball a global game. Non-American stars, for one reason or another, haven’t connected with American viewers as much as homegrown talent.

“A lot of people are under this illusion that you could become more international while being just as resonant domestically,” Strauss said. “I don’t think that’s the case. It’s actually a trade off. And some of what we’re seeing [with ratings] is that trade off.”

The post Why the NBA’s Ratings Are Down Big — and Why Its New Media Partners Should Care appeared first on TheWrap.

According to production company Banijay UK, the BBC received complaints from individuals in relation to “historical allegations of misconduct while working with presenter Gregg Wallace on one of our shows.”

“Whilst these complainants have not raised the allegations directly with our show producers or parent company Banijay U.K., we feel that it is appropriate to conduct an immediate, external review to fully and impartially investigate,” the company said in a statement. “While this review is under way, Gregg Wallace will be stepping away from his role on MasterChef and is committed to fully co-operating throughout the process.”

The investigation comes after BBC News reported that the 60-year-old was accused by 13 different people of making inappropriate sexual comments to co-workers over a period of 17 years.

His accusers include Kirsty Wark, who was a Celebrity MasterChef contest in 2011 and said he told “sexualized” jokes while filming on two separate occasions. Other allegations against Wallace reported by the outlet include talking openly about his sex life, taking his top off in front of a female co-worker saying he wanted to “give her a fashion show” and telling a junior female colleague he wasn’t wearing any boxer shorts under his jeans.

Additionally, BBC News said a former MasterChef worker told them that Wallacce showed her topless pictures of himself and asked for messages, while a former employees on Big Weekends said Wallace was fascinated by the fact she dated women and asked for the logistics of how it worked.

According to BBC, Wallace’s lawyers have said the accusations of against him are entirely false. A spokesperson for Wallace did not immediately return TheWrap’s request for comment.

On Thursday afternoon, Wallace posted a short video to his Instagram account thanking people “getting in touch, reaching out and showing their support.” He did not address the matter directly, however.

In addition to “MasterChef,”” Celebrity MasterChef” and “Professional MasterChef,” Wallace’s TV credits include being the original presenter of “Saturday Kitchen” in 2002, “Eat Well for Less,” “Inside the Factory,” “Turn Back Time,” “Harvest Supermarket Secrets,” and “Who Do You Think You Are?”

The latest allegations against a host of a BBC show come after former BBC presenter Huw Edwards plead guilty to three counts of obtaining, keeping and sharing indecent images of children in July.  

“We take any issues that are raised with us seriously and we have robust processes in place to deal with them,” a BBC spokesperson said in a statement. “We are always clear that any behaviour which falls below the standards expected by the BBC will not be tolerated. Where an individual is contracted directly by an external production company we share any complaints or concerns with that company and we will always support them when addressing them.”

The post UK ‘MasterChef’ Host Gregg Wallace Steps Down Amid Misconduct Investigation appeared first on TheWrap.

The suit alleges that some former employees — including former co-presidents Lindsay Galin and Jeff Raymond and former CEO Marc Owens — “improperly downloaded thousands of R&CPMK files, including confidential, proprietary and other sensitive business information” as part of an overarching plan to “jumpstart 2 PM Sharp’s new business by theft.”

The ex-employees named co-defendants in the complaint include Robert Greenwald, Alexandra Klein, Margaret Bryant, Jaclyn Mallon, Montana Rispoli, Kaity McQuade, Jennifer Kelleher, Jessica Sciacchitano, Heather McDevitt, Michelle Schwartz and Jamie Arons.

Beginning in late 2023, the complaint claims that Owens began efforts to take R&CPMK business and recruit members of R&CPMK’s workforce for 2 PM Sharp while serving as R&CPMK’s CEO. He would later be terminated in March 2024.

A domain for 2 PM Sharp would be registered around May 28 and it was formally launched as a limited liability company around July 19.

Between Oct. 1 and 3, 13 employees abruptly resigned to join 2 PM Sharp. On Oct. 2, Sciacchitano sent an email to Owens, Galin and Raymond at their respective 2PM Sharp email addresses with a list of clients she would be taking to 2PM Sharp, which was later deleted, according to the lawsuit, which has been obtained by TheWrap.

“Due to Defendants’ conduct, individually and/or in concert with each other, R&CPMK stands to lose untold sums in revenues from the loss of client business, and significant additional amounts in out-of-pocket costs for, among other things, recruiting, hiring and onboarding replacement employees while also restoring morale and stability across existing employees,” the filing adds. “All told, Defendants are causing, threatening and/or will continue to cause or threaten significant harm to R&CPMK, as well as damage to R&CPMK’s reputation as an industry leader.”  

The lawsuit is seeking an injunction against the employees and all other parties involved to prevent them from accessing, using or disclosing the confidential and proprietary information or soliciting its clients for 12 months from the date of their violations.

It’s also asking for a court order for all original files and copies, devices, electronic media and/or documents with the information to be returned, as well as actual, incidental, compensatory, consequential and punitive damages following a trial.

Representatives for R&CPMK and 2 PM Sharp did not immediately return TheWrap’s request for comment.

Pamela Chelin contributed to this reporting.

The post R&CPMK Accuses Ex-Employees, Rival 2 PM Sharp of Stealing Clients, Breach of Contract appeared first on TheWrap.

The 469,515 Class A shares, which represent a small portion of Roberts’ Comcast ownership, were awards of restricted stock units and options that were acquired as part of his compensation in January and March of this year.

In addition to his Class A holdings, Roberts owns all outstanding Class B shares, giving him 33.3% of voting power. According to the filing, Comcast has approximately 3.82 billion shares outstanding total.

The transaction, which is for planning purposes, came after Comcast recently announced it would spin off its cable network portfolio into a separate, publicly traded company that will reach 70 million U.S. households.

That move, which is expected to take a year and will be tax-free to Comcast shareholders, will not include Peacock, Bravo, the NBC broadcast network, NBC Sports, Telemundo, NBCU’s local stations nor the company’s film and television studios. The cable network portfolio generated about $7 billion in revenue for the 12-month period ending Sept. 30.

SpinCo, as its currently being referred to in the interim, will have a dual class share structure that mirrors Comcast’s, giving Roberts a one-third voting stake. However, he will not be on the spun-off entity’s board, a knowledgeable insider previously told TheWrap.

Shares of Comcast are up 2% in the past year, but are down 1.6% year-to-date and 2.7% in the past five years.

The post Comcast CEO Brian Roberts Sells $20 Million in Stock appeared first on TheWrap.

But an SEC filing suggests that reality is more complicated, with the special committee carrying out a long and tiresome process to find a deal that would appease both Redstone and shareholders. The committee reached out to over 50 parties before landing on the $8 billion merger deal, which included a provision for a 45-day go-shop period to find a better offer.

“The 45 days was designed to stack the deck in favor of Skydance’s bid, but it looks like they did have a lot of interest,” Lloyd Greif, CEO of the Los Angeles-based investment banking firm Greif & Co., told TheWrap. “Most of the parties probably figured they didn’t have enough time to do adequate due diligence.”

Among the interested parties was Apollo Global Management, who submitted a $26 billion all-cash offer with Sony Pictures Entertainment, but whose seriousness about a deal was questioned along the way as its various proposals omitted “certain key details,” according to the SEC filing. 

The filing also revealed that Warner Brothers Discovery CEO David Zaslav, despite the poor financial condition of WBD, nevertheless pursued Paramount for longer than previously understood. Paramount also received inquiries from undisclosed private equity firms, including the mysterious “Party F,” whose proposal was ultimately spurned by Redstone.

While Paramount’s filing sheds new light on how the search for a buyer played out, eMarketer senior analyst Ross Benes urged caution in drawing conclusions from the timeline laid out in the 669-page SEC filing.

“Shari Redstone changed her mind numerous times over numerous years regarding whether to sell Paramount and who to sell it to,” Benes told TheWrap. “The claims [from the special committee] are just one side of the story.”

Representatives for National Amusements, Apollo, Warner Bros. Discovery, Paramount and the special committee declined to comment for this story. 

WBD-Paramount merger regulatory fears

On Dec. 19, 2023, then-Paramount Global CEO Bob Bakish met in person with Zaslav in New York City. The two executives discussed, among other things, a potential merger between the two Hollywood studios. Talks continued during a meeting on Jan. 11. 

Between January and April, Paramount’s management, along with its independent special committee and financial advisor, had various conversations about a possible WBD transaction. National Amusements expressed concerns that a deal with WBD would pose “heightened regulatory risk,” expose both the company and Paramount to “further deteriorating industry conditions” and would likely not provide any cash to purchase outstanding shares owned by Paramount’s shareholders. Nevertheless, the group determined a deal would have had “significant synergy potential” and opted to enter into an NDA with WBD to allow for mutual due diligence, the filing shows. 

Warner Bros. Discovery never actually submitted a transaction proposal, and in February, TheWrap reported that WBD and Paramount were halting merger talks. But the SEC filing shows that discussions continued behind the scenes until April 11, when Zaslav contacted the Paramount side and told them that while he believed there was strategic merit to a combination, a deal with Paramount wouldn’t include any cash to purchase outstanding shares owned by Paramount’s shareholders.

Paramount contacted WBD during the go-shop process in July, but Zaslav did not express interest in a potential transaction.

A joint streaming venture with Comcast

Bakish didn’t only talk to Zaslav on Jan. 11. That same day, he had a call with Comcast chairman and CEO Brian Roberts and discussed a range of possible transactions, including an acquisition by Comcast and a potential joint venture involving the companies’ streaming platforms. 

On Jan. 26, Comcast informed Paramount it wasn’t interested in a merger or streaming joint venture, but it was open to exploring a potential license for Paramount+ content. But during a Feb. 20 meeting, Comcast changed its tune about a streaming joint venture, provided it could have majority control of the partnership.

From there, a multi-step plan was created involving a streaming joint venture and sale of Paramount Studios, which management believed was the “optimal” path forward in the event of no transaction for all of Paramount. The economic terms also included a substantial cash contribution from Paramount to fund the JV. But the special committee determined it would need NAI’s blessing.

By the end of March, the situation had shifted. Paramount’s special committee drafted an exclusivity agreement for talks with Skydance and told Bakish to cancel any further meetings with Comcast. During a call on March 30, Redstone also supported pulling the plug on the Comcast discussions — she preferred to enter exclusive talks with Skydance.

Paramount contacted Comcast during the go-shop process in July, but it ultimately did not submit a proposal. However, Comcast president Mike Cavanagh recently said he’d generally be open to streaming partnerships to help grow Peacock. 

Private equity’s play for Paramount

Paramount’s special committee also received interest from some private equity firms.

“Party E” was a “leading private equity firm” that submitted a proposal in January for a transaction that would involve a third party acquisition of a stake in a new entity to which Paramount would contribute a portion of its content library. 

Another bidder was “Party F,” identified as a private equity firm focused on “middle market companies.” It sent a proposal to Bakish and Redstone in February offering an entertainment studio it owned on a debt-free basis and an unspecified amount of cash, in exchange for 19.9% of Paramount’s outstanding shares.

Party F’s proposal was contingent upon equal voting rights for shareholders with a Class A shareholder premium to be determined for relinquishing their voting rights. Party F later contacted Redstone directly about a new, similar proposal in April. She ultimately chose not to engage with it. 

“Paramount value had declined a lot, which made it attractive for a PE takeover,” Benes said. “PE is always looking for companies they can purchase cheaply, wrangle some profits out of after cutting costs, restructure and sell off as a desiccated husk vaguely resembling its former self.” 

Letters from Apollo

For nearly four months, New York investment firm Apollo Global Management made numerous plays for Paramount.

It started on March 6, when Apollo sent a proposal to Bakish expressing interest in buying Paramount Pictures and other film and TV studios in a deal that valued Paramount Studios at $11 billion. The investment firm wanted to exclude CBS Studios and Paramount’s other primary television studios. 

On March 23, the special committee decided to pursue talks with Apollo. But NAI said it would not support a sale of Paramount Studios for $11 billion because it didn’t believe the transaction would maximize value for Paramount shareholders. That same day, Apollo sent a second letter offering $2.5 billion to $3 billion to acquire Paramount’s Class A common stock owned by NAI and other shareholders interested in selling. It said it could bring in other partners but didn’t reveal details. 

Redstone’s firm said it wouldn’t support a sale of the asset at even twice the $11 billion Apollo was proposing.

The special committee, nevertheless, continued to discuss Apollo’s new proposal and determined it warranted further exploration. NAI, on the other hand, continued to believe that Paramount Studios was a “crown jewel asset” that was critical to Paramount’s long-term strategy, NAI’s legal counsel told the special committee. 

On March 26, Apollo sent a third letter of interest. It didn’t include financial, structural or other transaction terms, including sources of capital. That prompted the committee to question the seriousness of Apollo’s interest and they proceeded to ask the private equity firm for more specifics on financial terms. The special committee decided to hold back on a final decision on entering into an exclusivity agreement with Skydance until Apollo responded. 

Five days later, Apollo sent a fourth letter valuing Paramount between $26 billion and $27 billion. While there were still no details on financing or the allocation of the consideration between Class A and B shares, Apollo did note a transaction would not accelerate a mandatory repurchase offer for the vast majority of Paramount’s outstanding indebtedness in light of S&P’s credit downgrade. 

On April 1, the Paramount side reviewed the latest Apollo proposal and felt the private equity firm was showing a lack of urgency given the media attention swirling around the Skydance transaction. It also couldn’t determine how much cash Paramount’s public stockholders would get in the proposed transaction. Later that day, NAI weighed in, calling it a “preliminary” and “not an actionable offer” — Redstone’s firm didn’t warrant risking Skydance walking away if David Ellison’s company declined to enter an exclusivity agreement, which NAI believed was a “credible risk.” 

The next day, Apollo sent yet a fifth letter reiterating its interest. It clarified proposed terms, including that the purchase price would be in cash at closing and that it had sufficient capital to fund 100% of the equity. But it continued to omit details regarding the allocation of the consideration between Class A and B common stock, according to the SEC filing. 

The 45 days was designed to stack the deck in favor of Skydance’s bid, but it looks like they did have a lot of interest.

— Lloyd Greif, CEO of investment banking firm Greif & Co.

Paramount continued to believe that Apollo was not engaging meaningfully with NAI to understand Redstone’s priorities — and was a bigger risk than Skydance. After shortening the duration of the Skydance exclusivity period from 30 days to 20 days, the committee approved the exclusivity agreement. 

As talks were going on behind the scenes, Paramount shareholders were publicly expressing opposition to the Skydance deal, arguing the deal would enrich Redstone at the expense of Paramount’s minority investors, and that Apollo’s bid was being unfairly ignored. Ariel Investments’ John Rogers Jr., for example, told TheWrap at the time it was considering taking legal action over the Skydance deal if it didn’t appropriately benefit the firm’s clients.

Enter Sony

Meanwhile, on March 21, Sony Pictures Entertainment and representatives of Party G, a “strategic counterparty,” reached out to express interest in a potential acquisition of Paramount’s studios — but not for all of Paramount. 

On May 1, Apollo submitted a sixth letter, but this time along with Sony. The partners offered to acquire Paramount Class A and B common stock for $28 and $17 per share, respectively, representing premiums of 35% and 49% to the closing prices on April 30. They also offered to acquire all of NAI and Redstone’s shares for $1.8 billion in cash. Apollo added that they were prepared to reallocate how much cash would go to NAI and Redstone compared to Paramount’s public stockholders.

The Paramount group looked at the new proposal and determined that the structure and ownership split between Apollo and Sony had been omitted and that NAI and Redstone would likely find the acquisition of 100% of their shares “disadvantageous.” They also worried that such a transaction could receive enhanced scrutiny from regulators and might present more closing risk than a Skydance transaction. Still, the Paramount side decided to continue to engage with Sony-Apollo and discuss how to improve the terms.

Apollo-Sony and the Paramount parties finally signed NDAs on May 16.

Even as it engaged with Skydance and Apollo-Sony, Redstone’s NAI continued to explore NAI-only transactions with multiple unidentified parties, the filing showed.

On May 12, legal counsel for the special committee said that Sony and Apollo had still not entered into an NDA a week after it was shared with them. Two days later, news outlets reported that Sony and Apollo were “rethinking” their bid. By May 27, Sony and Apollo were conducting due diligence, but they hadn’t made much progress from the May 1 proposal. 

The special committee, seemingly frustrated with Apollo and Sony, determined that Skydance was the only potential counterparty that was actively engaged. 

On June 24, a special committee member called Apollo’s financial advisor, who continued to request information from Paramount for due diligence — including a meeting between Sony and Apollo and Paramount management that did not ultimately occur. 

Apollo sent a seventh, and final, letter on July 3 offering a $4 billion preferred equity investment to acquire Paramount’s issued and outstanding shares and deleverage its capital structure. 

Over the next two days, the special committee queried Apollo about why its latest proposal was still missing “certain key details,” according to the SEC filing. The committee opted to prioritize Skydance, figuring it could further engage with Apollo during a go-shop period. (A representative for Apollo declined to comment.) 

The long dance had ended. Though the special committee contacted Apollo and Sony during the go-shop period in July, the parties did not sign a new NDA nor engage further on a potential deal.

“Not every suitor will want to jump through continual hoops for an uncertain transaction of a deteriorating asset,” Benes said.

The post Inside Paramount’s Search for a Buyer: Apollo’s Letters, Redstone’s Rejections and ‘Party F’  appeared first on TheWrap.

The media giant lost the rights to NBA games in July: The new deal with ESPN, NBCUniversal and Prime Video will start with the 2025–2026 season. In June, the Wall Street Journal valued the multi-studio deal at $76 billion.

The suit filed Monday is on behalf of all shareholders who acquired WBD securities between Feb. 23 and Aug. 7. WBD chief financial officer Gunnar Wiedenfels was also named as a defendant.

Richard Collura is behind the class action suit, filing in the District Southern Court of New York “individually and on behalf of all others similarly situated.” Law firms including Rosen, Bernstein Liebhard LLP and Gainey McKenna & Egleston have all issued calls urging impacted parties to partake in the suit.

According to legal documents obtained by TheWrap, WBD’s “wrongful acts and omissions” and the “precipitous decline in the market value of the Company’s securities” caused the plaintiffs to suffer financial losses.

Zaslav and Wiedenfels, referred to as “Individual Defendants” in the lawsuit, are accused of presenting “misleading” SEC filings, press releases, and other market communications for the company.

The suit further states that they deliberately concealed “adverse facts” that had not yet been disclosed and the the picture they painted was “materially false.”

A comment by Wiedenfels from 4Q 2023 earnings call is cited in which he mentioned WBD’s “very, very strong partnership for 40 years” with the NBA. He also said, “It’s very easy to lose control over sports rights investments. That’s not what we do. We’re going — we know exactly what value we assign and
we stay disciplined during our discussions.”

Collura is seeking a jury trial.

Pamela Chelin contributed to this report.

The post Warner Bros. Discovery Investors Sue Over ‘Significant Losses and Damages’ Caused by NBA Rights Fallout appeared first on TheWrap.