Edgar Bronfman Jr. Makes $4.3 Billion Bid to Take Control of Paramount Global in Challenge to

Posted by Jenniffer Sheldon on Wednesday, September 4, 2024

The book isn’t closed yet on Paramount Global‘s months-long M&A epic.

On Monday (Aug. 19), billionaire media mogul Edgar Bronfman Jr. submitted an offer valued at $4.3 billion to acquire Shari Redstone’s National Amusements Inc., which is the controlling shareholder of Paramount Global, Variety has confirmed.

Bronfman’s bid is an attempt to rival the offer from David Ellison’s Skydance Media and its financial backers, which last month clinched a binding agreement worth more than $8 billion for NAI and Paramount Global, whose properties include CBS, Paramount Pictures, Showtime/MTV Entertainment Studios and Paramount Media Networks.

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Bronfman’s bid was submitted to the special committee established by Paramount Global’s board to evaluate M&A offers, which is expected to review it on Wednesday. Reps for NAI, Bronfman, Skydance and the Paramount board’s special committee declined to comment.

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Bronfman’s bid for NAI was first reported by the Wall Street Journal. Bronfman, formerly CEO of Warner Music Group and Seagram, claimed to have secured $5.5 billion in capital commitments from backers including Fortress Investment Group, BC Partners Credit, crypto investor and ex-child actor Brock Pierce, activist investor Jeff Ubben and his wife, Laura Ubben, and Duty Free Americas chairman Simon Falic, per the report. Others joining the Bronfman-led bid include film producer Steven Paul, ex-Turner CEO John Martin — and media veteran Jon Miller, a partner at Shari Redstone’s Advancit Capital investment firm, according to the Journal.

Bronfman’s offer comprises $2.4 billion for NAI (about $1.75 billion net of debt); an investment of $1.5 billion earmarked for Paramount’s balance sheet to pay down debt; and $400 million for the breakup fee Paramount would be forced to pay to the Skydance group if Paramount opts for Bronfman’s offer. Unlike Skydance’s offer, the Bronfman bid would not buy out any shares of Paramount’s shareholders (other than those held by the Redstone family).

Bronfman, in a letter to Charles Phillips — the Paramount board member who heads its special committee on M&A — said his proposal “eliminates the risks, uncertainties and costs of combining Paramount with Skydance,” and that Paramount’s business is “far more valuable” than the Skydance’s bid values it at, according to the Journal report. Skydance says its deal has an enterprise value of $28 billion, with Skydance itself valued at $4.75 billion.

On July 7, Paramount Global and Skydance Media announced a two-part transaction that would result in Skydance buying out Shari Redstone’s National Amusements Inc. and then merging with Paramount. Under a “go-shop” provision in that agreement, Paramount Global has the right to solicit a better offer in a 45-day window, which expires at 11:59 p.m. ET on Aug. 21. If Paramount Global is engaged in talks with a prospective bidder that the board’s special committee for M&A has determined “in good faith is or would reasonably be expected to lead to a Superior Proposal” to Skydance’s terms, the company may extend the go-shop period for another 15 days — until Sept. 5, 2024, per an SEC filing.

What Bronfman would do with Paramount Global if he wins control of NAI isn’t clear, but it’s possible he could seek to sell off its divisions (e.g. Paramount Pictures, CBS or the cable networks). In the second quarter, Paramount Global took a nearly $6 billion write-down on the value of its cable networks.

Currently, Bronfman serves as executive chairman of Fubo, the sports-focused streaming pay-TV provider that last week won a legal victory over Disney, Warner Bros. Discovery and Fox Corp.’s Venu sports streaming joint venture as a federal judge issued a preliminary injunction barring Venu’s launch and siding with Fubo’s antitrust arguments. Bronfman was chairman and CEO of Warner Music Group from 2004-12, stepping down after it was acquired by Len Blavatnik’s Access Industries. Before WMG, he was CEO of Seagram before he sold that business to Vivendi.

With the M&A drama still unresolved, Paramount is undergoing significant layoffs amid revenue declines in its TV and film businesses. The company said it is cutting 15% of its U.S. workforce — eliminating about 2,000 jobs — by the end of 2024 as part of efforts to slash $500 million in yearly costs. The job cuts will be primarily in marketing and communications departments with some “right-sizing” in other areas including legal, finance and other corporate functions, according to Chris McCarthy, head of Showtime/MTV Entertainment Studios and Paramount Media Networks and one of Paramount Global’s three co-CEOs.

Skydance’s cost-cutting targets are even more aggressive. Jeff Shell, the former NBCUniversal CEO who would become president of a combined Skydance-Paramount, has said Skydance is aiming to achieve at least $2 billion in annualized cost synergies at Paramount. 

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