If Sony and Apollo take a stake in Paramount Global, their strategy would be to keep both studios’ theatrical production stable – not reduce it – while cutting the more elaborate parts of the conglome and auctioning off CBS and the linear channels like MTV and Paramount Plus Streaming service.
The news about the cinema production is available this evening by deadline, while the New York Times previously reported Sony and Apollo’s plans to cut Paramount’s TV assets as part of their $26 billion bid for the entertainment company. Per NOW, Sony has not disclosed its plan to Paramount and its advisers, who decided on May 4 to hold separate discussions with Sony/Apollo and continue negotiations with David Ellison’s Skydance/Red Bird.
Many have pointed out that a Sony merger with Paramount would bring the former under scrutiny from the FCC, as foreign-owned corporations are not allowed to own U.S. channels.
According to Deadline’s sources, many in Hollywood, including movie theater operators, fear a Sony-Paramount merger, many have post-traumatic stress disorder over the Disney-Fox merger in 2019 and the resulting reduced film production: at 20th Century Studios, Searchlight and Disney There are only 12 titles for 2024. With widespread releases (pictures running in more than 1,000 cinemas) of around 83 titles this year, the exhibition cannot cope with another loss of a major studio and around ten films disappearing from the market. They are already struggling through postal strikes and Covid.
The big Sony is releasing 15 films this year and Paramount is releasing another ten. Sources tell Deadline that the plan is not to downsize the Sony-Paramount merger, but rather to compete with streamers. They wouldn’t follow in the footsteps of Disney-Fox’s practices; At least that’s the plan at the moment. This is the main reason why Sony is aiming for Paramount to establish a 1+1 studio equation = 4.
Meanwhile, according to the NYT, neither Sony nor Paramount have signed formal nondisclosure agreements or begun disclosing the books, a formality that could take weeks. In a merger with Sony Paramount, the former Culver City property would operate the combined company as a joint venture, with Apollo taking a small stake that could later be sold to Sony or another buyer. Marketing and sales activities would be combined.
Some close to Paramount believe there is a third option, which is for Shari Redstone to go it alone and not make a deal with Sony/Apollo or Skydance. How long that can last remains the question.
Sony is known as a content arms dealer, licensing films and TV shows to Netflix and Disney. The studio has a whopping pay-one deal with Netflix. That strategy would remain unchanged with the addition of Paramount, the idea that the Melrose Ave property’s OTT service would shift to Comcast’s Peacock or Warner Bros’ Discovery’s Max.
The Sony-Apollo deal would require approval from the Justince Department’s Antitrust Division, the FTC and the FCC. The current administration of President Biden is known to be opposed to mergers, particularly horizontal mergers that would impact jobs.