Byron Allen, the renowned media mogul, has recently made headlines with his audacious bid of $14 billion to acquire Paramount Global. Despite facing skepticism surrounding his deal-making abilities, Allen is confident that he has the necessary capital to finance the transaction. In a statement to CNBC, he affirmed, “We have more than enough capital available to us. The real challenge is certainty of close.” Allen recognizes that the pivotal factor for the success of his bid lies with the Federal Communications Commission (FCC).
Undeniably, Allen is no stranger to making offers on major media assets. However, it is important to note that bidding is not synonymous with buying. Several of his previous media buyout attempts have failed to materialize into successful transactions. Last year, Allen offered a staggering $18.5 billion for Paramount, only to be rejected by the company. He revealed that he has yet to receive a response to his latest offer. Shari Redstone, who controls Paramount through her company National Amusements, has displayed openness to deal-making, aiming to either merge or sell the company.
Within the media industry, there is growing attention focused on Paramount. David Ellison’s Skydance Media and its backers have been exploring potential private acquisition deals for either Paramount Pictures or the entire media company. Furthermore, preliminary talks between Paramount and Warner Bros. Discovery regarding a potential merger were also reported. This proposed merger, however, could have faced significant regulatory hurdles.
Byron Allen’s offer to acquire Paramount stands out as his most ambitious deal-making endeavor. His bid of $30 billion encompasses all of Paramount’s outstanding shares, including both debt and equity. The Allen Media Group issued a statement emphasizing that their offer “is the best solution for all of the Paramount Global shareholders, and the bid should be taken seriously and pursued.”
Over the years, Byron Allen has made several notable attempts to acquire various media assets. In December, he made a renewed effort to purchase Black Entertainment Television and VH1 from Paramount for a combined $3.5 billion. November saw him considering a bid to acquire television stations owned by E.W. Scripps. In September, Allen submitted an offer to buy ABC and multiple other networks from Disney for $10 billion, following the company’s decision to divest its linear TV assets. Additionally, in 2022, he expressed interest in acquiring the Washington Commanders, a National Football League team. One of his previous notable endeavors includes offering $8.5 billion to acquire television station owner Tegna in March 2020.
Byron Allen often finds himself on the losing end of deals due to changes in ownership’s decision to sell. Nevertheless, he remains firm in his resolve and refers to his acquisition of The Weather Channel in 2018 for $300 million as a testament to his abilities. He defends his track record by comparing it to that of baseball legend Babe Ruth, stating, “Let’s talk about Babe Ruth. Does he go down as one of the greatest baseball players of all time? And he struck out half the time.” It is worth noting that Ruth had a 15% strikeout rate, having struck out 1,300 times in 8,399 at-bats.
Allen’s bids for linear TV assets come at a time when the media landscape is rapidly evolving towards streaming platforms. Almost all major media companies have launched their own streaming services in order to compete with industry giant Netflix. Paramount’s streaming platform, Paramount+, reported an increase in its subscriber count to 63 million in its third-quarter earnings report. However, the division responsible for the company’s direct-to-consumer products has failed to generate profits comparable to Netflix. Paramount’s streaming division reported adjusted losses of $238 million for the third quarter of the year.
Despite the challenges posed by the shifting media landscape, Allen’s interest in acquiring Paramount lies predominantly in its linear networks. He firmly believes that these networks are still valuable and can be successfully managed. To support his claim, he highlighted their potential for success if managed properly. Following news of Allen’s bid, Paramount experienced an almost 7% increase in its stock value. Over the past three months, the stock has risen by more than 35%. Nevertheless, it remains more than 40% below its 52-week high of $25.93 a share reached in February 2023.
Byron Allen’s bid to acquire Paramount Global represents yet another ambitious endeavor in his history of media deal-making. Despite skepticism and past failed attempts, Allen remains unshaken in his confidence, armed with the necessary capital to finance the deal. As the media landscape continues to evolve, the fate of Paramount will be determined by its ability to adapt and thrive in the highly competitive streaming industry.
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