As 2023 unfolded and it was clear that the houses of cards that were being amassed by traditional media companies to leverage their assets into siloed behemoths were crumbling, one of the more telling signs of this not going as well as planned was the announcement that Paramount Global, nee Viacom, was looking for ways to focus on their core business assets, namely their struggling streaming platform Paramount+. In a series of moves that all but gutted their legacy pay TV brand, not to mention dozens of top-flight veteran executives who built it, they transformed SHOWTIME into an afterthought that now merely follows the + sign and has brought a passionate and loyal fan base and yes, one with a history of being willing to pay for meaningful content to them. And at the same time, they anounced they were open for business on a number of their other businesses. Including, surprisingly, the BET Media Group.
On any objective scale, the networks that comprise this subset, BET and VH-1, still would seem to have relevance and value–numerically, more than even Showtime. In 2022 BET alone delivered an average 359,000 total day viewers, ranking tied with Syfy for 37th place among 159 measured ad-supported networks. More importantly, in a year where top-tier networks (including Syfy) all suffered double-digit year/year percentage declines, BET held onto 98% of its 2021 audience level. And more viewers than MTV, Comedy Central, and any other Paramount Global-owned network save for CBS and the Yellowstone-infused Paramount Network. VH-1 wasn’t quite as hot on an overall basis, but still was the conglomerate’s third most-viewed cable network among adults 18-49, just a hair behind BET despite being saddled with a scheduled increasingly reliant on reruns and second runs of shows that had historically built its popularity that Paramount played in-house poker with, such as RUPAUL’S DRAG RACE, which was “upgraded” to MTV for its most recent original season earlier this year.
In-house self-dealing isn’t new. Companies that look to present better stories to potential investors, especially when stories need to be told that fit a narrative. For example, for many of its formative years Cartoon Network paid nary a license fee to its corporate cousin suppliers Hanna-Barbera and Warner Brothers as Turner looked to make that business seem more successful than it actually was. Moving a proven hit to MTV away from VH-1 wasn’t as much of an “upgrade” as it was a way to assure they’d more easily keep what was valuable to them as they tried to find a buyer for the whole of BET Media.
And, to be sure, the value of BET to the many suitors who were more than merely kicking tires was arguably higher to them than it is to Paramount. Since it was acquired in 2001, BET had lost the status of a black-owned business, which many advertisers realize both economic and brand advantages from supporting. Among BET’s more prominent suitors were companies that have directly benefitted from that status, as the WALL STREET JOURNAL’s Jessica Toonkel reminded in her story yesterday:
Initial bidders for the stake in BET included basketball legend Shaquille O’Neal, who had teamed up with TV producer Kenya Barris and rapper 50 Cent and Group Black, The Wall Street Journal previously reported.
Other bidders included actor-producer Tyler Perry, who was backed by private-equity firm Ariel Alternatives, a subsidiary of asset-management company Ariel Investments; Sean “Diddy” Combs, backed by investment firm HarbourView Equity Partners; and media entrepreneur Byron Allen, the Journal reported.
But that process and their pursuits came to an abrupt halt yesterday as Toonkel also reported, largely because in the high-stakes poker game that Paramount Global is playing, they decided to hold rather than fold:
Paramount Global has dropped its plans to sell a majority stake in its BET Media Group, which includes the VH1 and BET cable networks and BET+ streaming service, according to people familiar with the situation. The company notified bidders Wednesday evening that it decided to end the sale process because it concluded that a sale wouldn’t result in any meaningful deleveraging of its balance sheet, the people said.
The failed sales process is a sign of how challenging the traditional cable television business has become, as consumers cut the cord in favor of streaming services instead.
As of the end of the first quarter, only 45% of U.S. households had cable or satellite TV, the lowest level in 37 years, according to research firm MoffettNathanson. Paramount, which owns CBS, Nickelodeon and the Paramount movie studio, has been looking to sell noncore assets such as its majority stake in BET as it seeks to shore up resources to focus on its flagship streaming service, Paramount+. Earlier this month, the company agreed to sell its Simon & Schuster publishing business for $1.62 billion to the private-equity firm KKR.
A less jaded and impartial observer might think that if a business as ancient and Luddite as Simon and Schuster could grab a cool billion plus, the reported $3 billion that they were seeking would easily have been obtained. Indeed, a deep-pocketed, Black-owned business that already owns a mainstream cable network (The Weather Channel) such as Allen Media Group would have been an ideal landing spot for BET. The potential for the production-focused Perry, who has built a highly efficient and lucrative production facility in Atlanta, to be part of this was certainly a possibility as well.
But because Paramount’s sole focus in all of this has been simply to put lipstick on their primary pig, namely Paramount+ (insert vomit emoji here) SHOWTIME, at a time when it has, per the Nielsen GAUGE, even fallen below Peacock in average share of viewership (and barely ahead of corporate sibling and FAST channel aggregator Pluto TV), the gamblers that now run their internal poker game have, at least for the moment, decided that BET was actually worth holding on to after all.
So go ahead, genuises. Now’s your chance to actually do something proactive.
You have a stand-alone streaming service called BET+ which Perry supplies a number of exclusive series to, including THE OVAL and its successful spinoff RUTHLESS (boy, wait till you see what and who’s coming next season!). Step one is to follow your SHOWTIME lead and fold those subscribers and audience into the mothership streamer. It isn’t a huge leap of faith to assume that there’s not much overlap in viewership, and the $8 a month they’re forking over will look better in aggregate than on its own.
You also might want to consider throwing a few more steaks onto the VH-1 fire. There is clearly still an audience that knows where the channel is. There are internal IP assets that could be a fit for a brand that in the 90s was exceptionally relevant and indeed built its legacy on being “MTV for adults”. Series featuring crossover artists, both celebreality storytelling and personal brand extensions, are lower-cost risks worth exploring. BET is about to debut yet another reboot of HOLLYWOOD SQUARES featuring hip-hop artists. How’s about exploring ways for the MTV and Nickelodeon kids of yesterday to revisit some dormant but beloved formats they grew up with but now tailored for a nostaglia audience? You don’t think some iteration of REMOTE CONTROL or FIGURE IT OUT might find an audience?
And frankly, if I can spitball things like this so quickly, your vaunted staff of experts has, or at least should, have a lot more viable ideas under consideration. Drop a dime or two toward actually making something happen, rather than strictly rely upon a whole lot more utility of reruns of MARTIN or MOESHA. They belong on TV LAND, or, better still, should be exclusive to Paramount+SHOWTIME and, if you’re smart, +BET+, assuming the metadata can handle all those plus signs.
Fine and dandy, you’ve decided to play your cards right, or at least less wrong than you have of late. Try fattening a calf for slaughter rather than starving it. Who knows? After a few months of using your “successes” on Paramount+ to prop up CBS during the strike, you’ll probably be back seeking suitors. For all of the reasns cited above, I have a hunch they’ll still be interested.
And, in the meantime, you’d better count your money, while you’re sitting at the table. They’ll be time enough to count it when the dealin’s done.