Well, this is often what happens when Chanukah finishes early. While the majority of the world is in holiday mode, those who don’t celebrate the holiday are looking for things besides the umpteenth rerun of ELF to keep themselves entertained.
If you happen to be among those non-Christmas celebrants looking for a connection of sorts, for decades there have typically been decadent parties thrown at large clubs and even on yachts on Christmas Ever called Matzoballs, where nice Jewish boys, either with advanced degrees and/or trust funds, and arguably nice Jewish girls decked out to the nines in their LBDs and LTLs gather over $20 cocktails and a $40 cover charge in the search for true love, or at least a holiday hookup.
Well, Shari Redstone and David Zaslav are, if nothing else, happily married, so they probably didn’t have the same end goals as those attendees, but the fact is they’ve apparently been spending part of what was ostensibly supposed to be a holiday week schmoozing about something between hookup and alliance, with Shari-leh then passing the torch to fellow lantzman and aide-de-camp Bob Bakish for the lunch heard ’round the world, at least the world of those who cover media. As AXIOS’ Sara Fischer eagerly reported roughly around the time the market was about to close yesterday:
Warner Bros. Discovery CEO David Zaslav met with Paramount Global CEO Bob Bakish on Tuesday in New York City to discuss a possible merger, Axios has learned from multiple sources. The meeting between Zaslav and Bakish, which sources say lasted several hours, took place at Paramount’s headquarters in Times Square. The duo discussed ways their companies could complement one another. For example, each company’s main streaming service — Paramount+ and Max — could merge to better rival Netflix and Disney+. WBD is said to have hired bankers to explore the deal.
It was mere days ago when we mused about Shari’s desire for tire-kicking the conglomerate her “leadership” has, per VARIETY’s Cynthia Littleton, produced the following results:
According to Wall Street, as of Wednesday, Paramount Global was worth $10.3 billion. That’s less than half of the $30 billion valuation put on the company after its last big corporate transaction, when it re-merged with CBS in 2019. (The two companies were brought together by Sumner Redstone in 2000 but separated up again in 2006). Paramount Global’s stock has been below $20 since May, closing Wednesday at $15.50).
Meanwhile, it’s equally well documented that Zaslav has been looking for ways to add additional synergies and value to his struggling empire which, while currently worth nearly triple the number assigned to Paramount Global, hasn’t been a darling of the investment community to whom he ultimately reveres far more than his own employees. As CNN’s Oliver Darcy, someone with arguably more skin in this game than most reported, the talks aren’t a complete surprise. Zaslav, who executed a number of acquisitions at Discovery, has talked in recent months about going shopping for additional assets to boost Warner Bros. Discovery’s content offerings.
And there are certainly potential efficiencies that combining two struggling legacy media companies could produce, and some of these speculations are old news. Apart from the burning issue of their respective +s coming together, Fischer points out other ways the Rock and the Hard Place could find mutual benefits from a relationship:
- WBD could use its international distribution footprint to boost Paramount’s franchises, while Paramount’s children’s programming assets could be essential to WBD’s long-term streaming ambitions.
- CBS News could be combined with CNN to create a global news powerhouse. CBS’ crime dramas, such as “NCIS” and “Criminal Minds,” could be combined with Investigation Discovery and TruTV.
- CBS Sports’ footprint could be combined with WBD’s. For example, CBS and WBD’s Turner Sports currently share TV rights for March Madness.
Naturally, this has all reignited the business and media trade reporting world. THE HOT BUTTON’s David Poland is relatively bullish:
(I)t makes more sense than any rumor that has been on the table. Real estate first… $300 million for the Paramount lot. SOLD! And then, assets…WBD doesn’t have a broadcast network. Paramount does.The Cable Networks at the 2 companies have surprisingly little crossover. MTV has become a very narrow brand, but WBD only really has Cartoon Network as a over-12 youth brand of any kind after selling off the CW. What could they add up to together? The Discovery/HGTV/TLC/Food Network group of networks has no reflection at Paramount…
While our friend Rick Ellis at TOO MUCH TV sounded a much more dour and potentially saber-rattling tone in what he hopes will be his final nightly newsletter of the year:
(T)his move isn’t a huge surprise to anyone following the industry, given that Zaslav and his team have been hinting for months that they are looking to acquire one or more rivals. In fact, Zaslav has bragged that the ongoing rounds of restructuring and cutbacks at WBD have freed up the money that would allow WBD to pursue a merger. If you hear that argument and think “Hmm, gutting your company so you can raise money to acquire someone else’s dumpster fire seems like a bad idea,” then you have hit on one of the reasons why this entire merger idea deserves to be stopped by federal regulators.
And as has been all the buzz earlier this month, Redstone has for her part definitely put out her hot-to-trot shingle. And even within her own camp, there are other potential deals dangling in front of her much like the “debutantes” that get dolled up at Matzoballs. This morning’s CYNOPSIS dropped this little nugget as we were composing this:
Paramount Global is in talks to sell BET to an investor group, reports Bloomberg. Paramount had explored the sale of a majority stake in BET Media Group earlier this year, but did not receive a satisfactory proposal. Possible buyers now include BET CEO Scott Mills and Chinh Chu, who runs CC Capital Partners, for a price “a little under $2 billion,” according to Bloomberg. Byron Allen, who expressed interest in the network last time around, sent a message to Paramount on Tuesday, repeating his offer of $3.5 billion for both BET and VH1. “You are pursuing an inside sale at a below-market price with management that will not yield the highest price for the stockholders,” Allen wrote in a message reviewed by Bloomberg. The last time BET was sold, to Viacom in 2001, it fetched $3 billion.
So Shari-leh’s definitely playing the field. And that has sparked longtime Zaslav confidente Alex Sherman of CNBC.com to weigh in with his own thoughts on this meet market-like mentality, and still other potential suitor waiting in the wings (one he indeed has a vested interest in seeing made happy)”
Let’s say you have a crush on two people and you find out one of them may like you back. Do you just start dating that person, or do you find out what the other person thinks, too?
“Crush” may actually be too strong here. This is not a case of both companies lusting for each other. It’s more of a partnership of necessity. Both companies don’t have a clear future competing for content in a streaming-dominated world where Apple, Amazon, Netflix and YouTube owner Google have far larger balance sheets. They just want to survive and boost their share price.
But maybe Warner Bros. Discovery would rather merge with Comcast’s NBCUniversal — if Comcast is open to it.
And indeed, Sherman’s picking up on old news. Zaslav has a long history with NBCU, and had reportedly been in strategic alliance talks with former Comcast head Jeff Shell mere months after the Disco Brothers (shout out to Evan Shapiro) alliance came together last spring. Poland, for his part, is dismissive:
I continue to ask, “Why?” What does Paramount Global bring to NBCUniversal, besides a library (with decent IP) and some scale, that would make NBCU a better company? What about bringing together Paramount+ and Peacock would make that a better Streaming play? Who would buy CBS, which certainly could not be merged within the same ownership as NBC?
The simple answer, I would offer, is that both Zaslav and Redstone seem motivated to make something happen, and perhaps the combined entity could be more attractive to Comcast. Particularly if they’re able to perhaps bring it a little extra gelt by taking advantage of someone like Byron Allen’s passion? Any nice Jewish girl looking for an LTR knows you take advantage of any and all offers for gift horses on your way to your primary goal.
So it sure looks like something’s gonna happen, and probably a lot sooner than even those of us who had been trying to wind down for the year might prefer. There might even be some tax savings and timing issues that could be in play as well. When bankers get involved, particularly over the holidays, those kind of issues come up. More than a few Matzoball marriages have come about in some part due to getting that “filing jointly” checkmark set by year’s end.
But here’s my two cents (sorry, I have scant little more to my name). Since the patterns of mismanagement of both Zaslav and Redstone have seen hundreds of talented people depart both companies this year, and part and parcel with these reports leads to renewed speculation and worry that still more executives well below these and Bakish’s levels are going to be spending their holidays worried about their livelihoods and long-term potential. Not exactly the ideal conditions to drive these companies to some sort of a renewed effort to band together to fight the Netflix, Apple and Amazon behemoths that are cleaning their collective clocks.
What, this couldn’t have all kept until January?
Now that this all out in the open, and since we’re actually heading into the actual Christmas weekend, perhaps it might. Not that it would calm the nerves of those most directly affected. But it sure would keep the pundits and the players calmer.
Perhaps since they’re not Matzoball candidates per se they can draw some inspiration in the way that the brilliant Robert Smigel offered up in 2005 on SATURDAY NIGHT LIVE:
Until next time…