If Sony and Apollo manage to acquire Paramount Global, their plan is to maintain the current level of theatrical releases from both studios rather than reducing them. However, they intend to streamline the conglomerate by selling off assets such as CBS, linear channels like MTV, and the Paramount Plus streaming service.
Recent reports suggest that Sony and Apollo are considering cutting Paramount’s TV assets as part of their $26 billion bid for the entertainment company. However, Sony has not yet shared its plans with Paramount, which has been in separate talks with both Sony/Apollo and David Ellison’s Skydance/Red Bird. Negotiations with Skydance have progressed, although Paramount remains engaged with both parties.
A potential merger between Sony and Paramount raises concerns in Hollywood, especially among exhibitors who fear a reduction in film output similar to what occurred after the Disney-Fox merger in 2019. However, sources indicate that the plan is not to scale back but rather to increase theatrical output to compete with streaming services. The combined studios aim to release around 20 wide-release films per year, doubling their current output.
Despite these discussions, neither Sony nor Paramount have formalized nondisclosure agreements or started financial evaluations, which could take weeks to complete. If a deal were to proceed, Sony would likely operate the combined entity as a joint venture with Apollo, merging marketing and distribution operations.
However, there’s speculation that Paramount’s owner, Shari Redstone, may choose to go it alone instead of striking a deal with Sony/Apollo or Skydance. The outcome of this decision remains uncertain.
Sony is recognized for its content licensing strategy, and the acquisition of Paramount would likely not change this approach. There are suggestions that Paramount’s OTT service could be sold to platforms like Comcast’s Peacock or Warner Bros Discovery’s Max.
Any deal between Sony and Apollo would require approval from regulatory bodies such as the Justice Department’s Antitrust division, the FTC, and the FCC. The Biden administration is known for its cautious approach to mergers, particularly those that could result in job losses.
