After an extensive deliberation period spanning over five months, Paramount Global has decided to refrain from selling a majority stake in its prized BET Media Group. This news comes directly from The Hollywood Reporter.
This strategic move involves retracting the “for sale” status of the unit, which encompasses the prominent BET channel, the streaming service BET+, as well as VH1 and BET Studios. Paramount's decision comes after witnessing expressed interest from influential figures like Tyler Perry, Byron Allen, Sean “Diddy” Combs, and other notable personalities who sought to acquire a substantial interest. The Wall Street Journal had earlier reported on Paramount's move to halt the bidding process for BET.
Tyler Perry already enjoys a business collaboration with Paramount, established through a multifaceted content partnership in 2019. On the other hand, Byron Allen has been actively pursuing the expansion of his TV station portfolio, which includes the renowned Weather Channel. Sean “Diddy” Combs boasts a television presence with his acclaimed Revolt network.
During the recent earnings call held on August 7th, Paramount's CEO Bob Bakish fielded a query about the potential sale's status. Although he did not explicitly mention BET, he responded, “We are consistently exploring avenues to enhance shareholder value. As previously indicated, this could encompass divestitures, acquisitions, or potential partnerships involving assets. We have effectively executed each of these strategies. However, beyond this, I won't delve into specifics.”
Paramount has maintained ownership of BET since 2000, when the company, then known as Viacom under the leadership of Sumner Redstone, acquired Black Entertainment Television for a notable $2.3 billion in stocks and an additional $570 million in debt. At that point, the BET channel boasted coverage in 62.4 million domestic households.
In recent years, Paramount has been diligently working to streamline its assortment of assets, aiming to bolster its presence in the streaming realm while enhancing its core entertainment portfolio. This portfolio comprises Paramount Pictures, CBS, Showtime, Nickelodeon, Comedy Central, MTV, BET, and the streaming platforms Paramount+ and Pluto TV. Paramount+ has successfully garnered around 61 million subscribers globally as a testament to this endeavor. However, despite these achievements, the streaming division has not achieved profitability, as evidenced by a recorded $424 million loss in the second quarter.
Earlier in the present month, Paramount entered into a substantial $1.62 billion agreement with the notable private equity entity KKR, sealing a deal to divest its significant book publishing subsidiary, Simon & Schuster. This sale results from persistent efforts spanning several years; antitrust concerns raised by a judge have thwarted the initial attempt. Preceding this sale was the successful divestiture of the tech platform CNET for an impressive $500 million in 2020. Furthermore, Paramount parted ways with CBS' New York BlackRock headquarters building for $760 million and CBS' Studio City lot for a notable $1.85 billion in 2021.
The diverse array of linear channels associated with Paramount has confronted challenges within the industry, most notably due to the growing trend of cord-cutting. As consumer preferences shift towards subscription-based streaming services, significant pay TV and cable providers, including Comcast, Charter, and DirecTV, have witnessed a collective loss of over 1.7 million subscribers in the last quarter alone, according to data compiled by Leichtman Research.
Paramount's TV Media unit has experienced a 2 percent dip in affiliate and subscription revenue in the most recent quarter, a trend highlighted in the company's disclosure on August 7th. This decline primarily reflects the repercussions of subscriber attrition, albeit partially offset by adjustments in pricing strategies.
