Paramount Global shares dipped 2% Thursday morning after word surfaced Wednesday night that the company had abandoned its effort to sell a stake in BET Media Group.
Shares fell at one point to $14.58, their lowest level since mid-May, though trading volume was lighter than normal.
A source familiar with the discussions told Deadline that Paramount informed bidders for a stake in BET that the process had been halted because the company concluded it wouldn’t create enough value or result in a meaningful reduction of debt. The company has been looking for opportunities to streamline, and just last week announced the sale of book publishing unit Simon & Schuster to KKR for $1.62 billion. Like its media industry peers, Paramount is contending with a secular decline in lucrative pay-TV subscribers at the same time it is looking to make inroads in the capital-intensive direct-to-consumer streaming business. As of the June 30 end of the second quarter, the company had $15.6 billion in total debt.
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The Wall Street Journal had the first report about the end of the BET process. A Paramount rep declined comment when contacted by Deadline.
Bidders for a piece of BET Media Group, which encompasses the BET and VH1 linear channels and studios as well as streaming service BET+, had included Byron Allen and investor groups affiliated with Shaquille O’Neal, Tyler Perry and Sean “Diddy” Combs. Bids had reportedly ranged between $2 billion and $3 billion.
BET was acquired by Paramount corporate ancestor Viacom in 2000 for $2.3 billion in stock. More than two decades later, despite significant challenges in the traditional TV business, the division is seen internally as having significant strategic value to the company. Suitors had to clear “a high bar,” the source affirmed to Deadline.
Disney has been making similar moves with its portfolio given the pressure on linear TV, signaling an interest in forming a strategic partnership at ESPN and declaring that ABC, FX and other networks may not be core to the company. Private equity is seen as a likely participant in the future configuration of TV assets, and it has already taken positions in the local TV sector. Multiple P.E. firms were in the mix in the BET talks.
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