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Paramount Global Shares Fall Under $10, A Record Low Since Viacom & CBS Merged
The stock touched an all time low today dipping below ten bucks with Skydance merger in rear view mirror.
After discussing a potential transaction for months, Paramount’s controlling shareholder Shari Redstone backed away at the 11th hour last week, leaving the company her father built in a complicated position with high debt, significant exposure to declining linear television, and ongoing streaming losses. An offer from Sony and Apollo was considered by many a non-starter due to foreign ownership rules for broadcasters, station caps, and concerns that it wouldn’t be easy to merger two more Hollywood studios. “Without a deal the public now owns a company with: 125% of its EBITDA coming from the shrinking linear TV business, and the majority of that from general entertainment cable networks; a new 3-person office of the CEO; another round of cost-cutting coming; a likely change to its streaming strategy; an employee base that has already endured 6 months of uncertainty; little appeal for most agents and producers to bring their best material to; a possible rift with the co-producer of its tent-pole films, leverage over 4x and likely to creep up.”
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