One of Hollywood’s oldest companies, the entertainment giant Paramount Global, has agreed to merge with independent film studio Skydance Media, creating a group worth $28 billion, says Peter Hoskins on the BBC.
As part of the “complex” deal, Skydance will pay $2.4 billion for National Amusements, owned by non-executive chair Shari Redstone. It holds just 10% of Paramount Group’s shares, but accounts for almost 80% of voting rights. It is the “end of an era” for the Redstone family, which “transformed a chain of drive-in cinemas into a vast media empire”.
No wonder Redstone is throwing in the towel, says AJ Bell’s Russ Mould. The stock has fallen by 78% in five years, while rival Netflix has gained 85%. The problem was Paramount’s “big gamble” on the streaming sector, with its Paramount+ platform “failing to gain the kind of traction enjoyed by Netflix, Amazon Prime Video and Disney+”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
With streaming platform owners now focusing on making a profit on their services, rather than just building up market share, Skydance “will have to think long and hard about Paramount Plus’s future” if it wants to bring a sense of “sparkle” to the company.
Given that Paramount+ is “haemorrhaging money while reaching approximately a quarter of Netflix’s 270 million subscribers”, says Jennifer Saba on Breakingviews, completely ditching the “subscale, expensive direct-to-consumer strategy should be on the table”.
The focus should be on partnerships, with Paramount and “much-better-equipped Goliath” Comcast already in talks about streaming jointly. Selling content to other streaming services should also be explored.
The deal highlights that the post-Netflix era has been a “costly bust for the stragglers of media, like fellow family-controlled pipsqueak AMC Networks or even Warner Bros. Discovery”.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
-
Shein shifts IPO focus to Hong KongThe development piles fresh pressure on London’s beleaguered stock market, which many had hoped would be boosted by Shein’s IPO
-
Scientists turn lead into gold – could it wreck the yellow metal's price?Medieval alchemists have been vindicated after scientists turned lead into gold, but the results aren’t going to crash the gold price any time soon
-
Investment opportunities in the world of Coca-ColaThere is far more to Coca-Cola than just one giant firm. The companies that bottle and distribute the ubiquitous soft drink are promising investments in their own right.
-
Streaming services are the new magic money tree for investors – but for how long?Opinion Streaming services are in full bloom and laden with profits, but beware – winter is coming, warns Matthew Lynn
-
'Pension funds shouldn't be pushed into private equity sector'Opinion The private-equity party is over, so don't push pension funds into the sector, says Merryn Somerset Webb.
-
Greg Abel: Warren Buffett’s heir takes the throneGreg Abel is considered a safe pair of hands as he takes centre stage at Berkshire Hathaway. But he arrives after one of the hardest acts to follow in investment history, Warren Buffett. Can he thrive?
-
Who will be the next Warren Buffett?Opinion There won’t be another Warren Buffett. Times have changed, and the opportunities are no longer there, says Matthew Lynn.
-
Will Comstock crash – or soar?Opinion The upside for Comstock, a solar panel-recycling and biomass-refining group, dwarfs the downside, says Dominic Frisby.
-
'As AGMs go digital, firms must offer a new form of scrutiny for shareholders'Opinion Technology has rendered big AGM meet-ups obsolete, but the board still needs to be held to account, says Matthew Lynn
-
Unilever braces for inflation amid tariff uncertainty – what does it mean for investors?Consumer-goods giant Unilever has made steady progress simplifying its operations. Will tariffs now cause turbulence?
