DIS Shareholders and Stock Info ONLY

https://finance.yahoo.com/news/redstone-deal-dilemma-paramount-investors-100000368.html

Redstone’s Dilemma: Give Paramount Investors a Vote or Not?

Christopher Palmeri, Jef Feeley and Michelle F. Davis
Fri, Apr 19, 2024, 8:52 AM CDT

(Bloomberg) -- Paramount Global’s controlling shareholder Shari Redstone has a tough decision looming: whether to let other stockholders have a say if she agrees to sell her family’s holdings to producer David Ellison and merge the film and TV giant with his Skydance Media.

The Redstones own less than 10% of Paramount but control 77% of the voting stock in the company, the parent of CBS, MTV and other media businesses. There’s no requirement that they get approval for a deal from all of Paramount’s investors, but securities law provides a way for a company to avoid costly shareholder litigation by giving everyone a chance to weigh in.

“We think it should,” said William Riley, an attorney for Paramount investor Russell Weiner, founder of energy-drink maker Rockstar. Riley sent Redstone a letter last week saying it appeared a transaction was being done for her “personal gains” and that other shareholders were being forced into a “speculative business arrangement that was never contemplated at the time of making their investment decisions.”

This month in Delaware, where Paramount is incorporated, the state high court ruled in a case involving Match Group Inc. that deals involving a controlling shareholder who reaps a disproportionate benefit should be conditioned on approval by a special committee of independent directors and a vote by noncontrolling shareholders. Absent both of those, company directors have to work harder to prove a transaction was fair to everyone if they get sued.

“A vote by minority stockholders may be offered in order to obtain a more deferential standard of judicial review,” said Lawrence Hamermesh, the former executive director of the Institute for Law & Economics at the University of Pennsylvania and an expert on Delaware law.

Although the Redstones and Paramount’s board haven’t committed to a deal yet, the terms being discussed include Ellison and his partners buying the family’s holdings for about $2 billion and then merging Skydance into Paramount at a valuation of some $5 billion, according to people familiar with the talks.

That proposal doesn’t sit well with some Paramount investors, including billionaire money manager Mario Gabelli and Barington Capital Group LP, which said the company should consider options that benefit all shareholders, not just the Redstones. Sony Group Corp and Apollo Global Management Inc. have had discussions about a joint bid for the company.

Paramount’s shares jumped 10% Friday to $12.06 on news of the potential bid by Sony and Apollo.

The Redstones and Paramount’s board haven’t decided whether nonvoting shareholders will get a say, according to people familiar with their thinking. A spokesperson for the family declined to comment. Most of Paramount’s stock is held by investors who have no say on matters like board membership, unlike most other publicly traded corporations.

There is precedent for media moguls giving investors with limited voting rights a say in deals.

The bylaws at News Corp. and Fox Corp. require that nonvoting shareholders be asked to approve big mergers. When controlling investor Rupert Murdoch proposed recombining the companies two years ago, he went a step further, saying he wouldn’t go forward with a deal unless a majority of non-Murdoch investors approved.

Ultimately, the companies dropped plans to recombine before getting that far.
In 2007, independent shareholders of Cablevision Systems rejected a takeover of the company by the controlling Dolan family. Only non-family members were allowed to vote.

The Redstones didn’t give nonvoting investors similar consideration when CBS Corp. and Viacom Inc. recombined in 2019. CBS board members unsuccessfully went to court to block that deal. Investors in both companies sued after the fact, and Paramount ended up settling for $290 million.

A Paramount deal, such as the one being considered with Skydance, will likely also end up in court, according to Charles Elson, a retired University of Delaware professor who founded the school’s Weinberg Center for Corporate Governance.

“That’s the problem with dual-class stock,” Elson said. “Dual class, it was argued, gave the genius power. But if the genius dies, and the child of the genius comes in, it really leaves the minority shareholders out in the cold.”
 
https://deadline.com/2024/04/kingdom-of-the-planet-of-the-apes-box-office-opening-1235874441/

Kingdom of the Planet of the Apes on track for a $54M domestic opening weekend, according to the story linked above. I could not find any production budget or marketing (P&A) budget information, FWIW.

Thus far, The First Omen (TWDC's first theatrical release this year) is underperforming and will not return a profit it appears. Maybe the Apes will turn it around? Making movies is hard.
 

Americans’ New TV Habit: Subscribe. Watch. Cancel. Repeat.​

Many more people are jumping from one streaming subscription to another, a behavior that could have big implications for the entertainment industry.
...
Americans are getting increasingly impulsive about hitting the cancellation button on their streaming services. More than 29 million — about a quarter of domestic paying streaming subscribers — have canceled three or more services over the last two years, according to Antenna, a subscription research firm. And the numbers are rising fast.
...
Traditional media companies like Paramount, Warner Bros. Discovery, NBCUniversal and Disney are trying to navigate the extremely bumpy road from the cable bundle (which was enormously profitable) to streaming (which is not). NBCUniversal’s Peacock, for one, lost $2.8 billion last year.
...
One option for slowing the churn, executives think, is to bring back some element of the cable bundle by selling streaming services together. Executives believe consumers would be less inclined to cancel a package that offered services from multiple companies.

Disney has found success by bundling Disney+, Hulu and ESPN+ into one package. It also joined several other companies, including Fox and Warner Bros. Discovery, in announcing a sports streaming service scheduled to start this fall.
...

Full article here:

https://www.nytimes.com/2024/04/20/...e_code=1.l00.1l7U.5BebkOe2-lyS&smid=url-share

[That's a gift link that will work for two weeks for non-subscribers.]
 
https://www.yahoo.com/entertainment/david-ellison-may-daredevil-ready-130000755.html

David Ellison May Be a Daredevil. But Is He Ready to Run Paramount?
by Emily Smith
Tue, April 23, 2024 at 8:00 AM CDT

Skydance Media CEO David Ellison may be able to withstand rolling a plane more than one time per second. But is the producer and part-time daredevil flier ready to take the reins of troubled Hollywood studio Paramount Global?

Wall Street is not so sure. As negotiations hurtle forward between Shari Redstone’s Paramount Global and Skydance, Paramount’s stock remains unsteady. And questions are swirling about what Ellison’s real plans are for the venerable entertainment company.

Ellison, the son of mega-billionaire Oracle CEO Larry Ellison, has a passion for aerobatic flying and started out as an actor. Following a number of movie missteps, in 2010 Ellison launched Skydance, a production company that has bankrolled a series of box office and television hits such as “Top Gun: Maverick,” “Mission Impossible,” the JJ Abrams “Star Trek” films, “Jack Reacher” and “Grace and Frankie.”

Now Ellison finds himself in the pole position to take over Paramount, as Skydance continues its exclusive talks to acquire the company with the backing of Redstone, Paramount’s biggest shareholder.

But the continued weakness in Paramount shares, which hit a 52-week low earlier this month, shows that Wall Street remains skeptical about Skydance’s all-cash bid to take control of Paramount through Redstone’s National Amusements’ majority stake. The proposed offer is controversial with shareholders because Redstone stands to gain the most from the sale, and a special committee of board members she set up has shied away from considering other bids, such as a $26 billion offer from private equity firm Apollo Global Management.

There are questions, too, about whether the 41-year-old Ellison is ready to oversee the Paramount assets, which include film and TV studios, CBS and the streamer Paramount+.

“I guess that’s the question,” one Wall Street insider told TheWrap. “Has he grown up enough?”

The insider added that thrill-seeker Ellison has been “willing to take some pretty big shots at things and big franchises…. that’s good because I think one of the issues with current management is that they’ve probably been felt to be too incremental.”

He pushed for 10 years to make the sequel “Top Gun: Maverick” with Tom Cruise, explaining, “Tom was very clear that he was not going to make a sequel until he thought the screenplay and the story was worthy of that.”

So far, Skydance — and Ellison — have kept their strategic plan for Paramount close to the vest. For his part, Ellison has been evasive about what he intends to do should he take ownership of the entertainment giant, and he likely won’t outline that until the deal is done because he is under an NDA.

That has made Wall Street nervous. The assumption has been that Redstone favors Skydance because it is a Hollywood player and would be more likely to keep Paramount’s sprawling assets together, rather than to sell the company off in pieces, as private equity buyers tend to do.

A representative for Ellison and Skydance declined to comment to TheWrap for this story.

Analysts see Paramount’s current management doubling down on trying to make Paramount+ profitable, possibly at the expense of the production side of the business.

“The single biggest question is how you can run this company more efficiently?” media analyst Rich Greenfield of LightShed Partners told TheWrap. “How do you get more people to use the streaming service at this point, given how far behind they are? It is not clear that anyone can achieve that.”

Greenfield added that “a lot of investors were hoping that whoever took over Paramount would shut that [streaming service] down and now it’s pretty clear that the focus is on building Paramount+ into a real player.”

From trust fund scion to Hollywood mogul

An avid aerobatic fan, Ellison learned to fly planes as a teenager and seems to be a born risk-taker. He first dreamed of being on screen, but founded Skydance at age 18 after accepting he was a “terrible actor.”

Ellison and his sister Megan Ellison, who is also a filmmaker, grew up with their mother Barbara Boothe on a horse farm in Woodside, Calif., in the Bay Area. He credits his mom, who divorced his tech mogul dad when he was three, for his and his sister’s love of film. She took them to the cinema every weekend.

When Ellison was 13, his father suggested he learn to fly, and he became a licensed pilot in aerobatics and commercial aviation, competing in air shows from age 17. He can apparently roll a plane 420 degrees a second — more than one roll per second. He and his father reportedly would stage dogfights over the Pacific in two-seat monoplanes. He has two planes in a hangar in Malibu, and a distinctive silver Ferrari.

His father once tried to import a decommissioned Russian MiG-29, but the U.S. government refused. “It’s considered a firearm,” the elder Ellison told The Guardian, “but theoretically you could rearm it and take out a couple of cities.”

The Oracle founder said he “must have passed on the risk-taking gene” to his son, who has said he wanted to be a pilot from age two.

Ellison, who is worth $141.7 billion and is the fifth-richest person in the world, according to Forbes, set up trusts for his children with stock in Oracle and then NetSuite, a cloud-based software company. This made both David and Megan billionaires and gave them creative freedom.

David Ellison studied film at the University of Southern California but dropped out to take an acting role in the $60 million film “Flyboys” starring alongside James Franco. The 2006 film bombed, making less than $18 million at the box office.

Once in Hollywood he also financed a series of projects that tanked, The Hollywood Reporter reported.

Hollywood high-flier Ellison benefited from the business and deal-making skills of his dad. He also sought guidance from powerful friends including entertainment mogul David Geffen and Apple co-founder Steve Jobs, and Hollywood super-lawyer Skip Brittenham, who helped him set up Skydance.

Ellison pitched Skydance to Jobs, who was initially not convinced. “I want you to come back up here and talk about how you guys are going to aspire to make movies and tell stories better than anybody else, because that’s what we did at Pixar,” Ellison said Jobs told him on Kara Swisher’s “Sway” podcast, noting, “It very much changed the trajectory of the company.”

The elder Ellison also heavily financed his son’s movie career. “He gave me an incredible opportunity by believing in me in the beginning,” Ellison told Swisher. “And we definitely talk about work constantly and work together constantly. But he’s been an incredible mentor and guide throughout all of this.”

Ellison tapped into his vast fortune to support his new Hollywood career, a move that Forbes described as “dumb money.”

Ellison decided to found Skydance Media in 2006. He also took on further small acting roles, including appearing in the golfing comedy “Hole In One”, where he met his wife Sandra Lynn Modic.

He said his “turning point” to quit acting and focus on producing came in 2011, when “Twilight” star Taylor Lautner dropped out of Ellison’s movie “Northern Lights,” a film that he co-wrote and planned to co-star in. Lautner felt it was a “conflict” for a film’s financier to also appear on screen, The LA Times reported.

“Everything I’ve done has helped me to realize producing is all that I want to do,” Ellison also said.

That same year, Megan Ellison founded Annapurna Pictures, the producer of critically acclaimed films like “Zero Dark Thirty” and “American Hustle.” More recently she has shrunk away from the limelight. A source with knowledge of the Ellison family said the siblings remain close but are busy with their separate projects.

And Ellison turned out to be not dumb. He struck a deal with Paramount and the funds got him behind big-budget titles including “Mission: Impossible,” “World War Z,” “Star Trek” and “G.I. Joe: Retaliation.” He worked with Cruise for 10 years to make “Top Gun: Maverick,” which grossed $1.5 billion worldwide.

Now he has his head down in the due diligence to potentially buy Paramount from National Amusements. As TheWrap reported last week, a deal to merge Paramount and Skydance Media is unlikely to conclude by May 3 — the end of a 30-day exclusivity window — but is moving forward despite pressure from shareholders eager to consider other bids.

“This is really whether the board believes that this is going to create long-term value,” Greenfield said. “Shareholders don’t get a say. I mean one shareholder gets a say, but others don’t.”

When asked if this move could trigger a wave of shareholder lawsuits, he added, “This is America. You can sue for anything.”

Another “silver-spooned movie enthusiast?”

The deal currently being discussed with Paramount’s board members would give Ellison control of the movie studio and a portfolio of assets including CBS, the BET, MTV and Nickelodeon cable channels and a national movie theater chain.

An individual familiar with the negotiations described the deal to TheWrap as a recapitalization of Paramount, in which it would continue as a public company with the goal of eventually trading between $30 to $40 per share.

It would be backed by fresh capital from a consortium of investors, including private equity firms RedBird Capital Partners and KKR, as well as Ellison’s father. CNBC reported that the group would hold an ownership stake of between 45% and just over 50%.

National Amusements could receive over $2 billion in cash from the Skydance deal, some of which would be rolled over, The Wall Street Journal reported. Skydance would then be acquired by Paramount in an all-stock deal valued at around $5 billion, the Journal said.

The Ellisons would bring in technological and creative expertise from Skydance’s own existing management team, as well as Jeff Shell, who joined RedBird following his ouster as NBCUniversal CEO, the individual said.

But some investors are angry, and they’ve made their opposition known to the company’s board.

Matrix Asset Advisors’ David Katz, whose firm owns over 350,000 Paramount shares, called the proposed deal “suboptimal” and “detrimental,” arguing in a letter that it prioritizes Redstone over all other shareholders. A Reddit investor community that collectively owns 1 million shares called the bid in their own letter a “slap in the face.” And in a separate letter, Blackwood Capital Management dismissed Ellison as “yet another silver-spooned movie enthusiast” who would “run our entertainment company into the ground.”

Earlier this month, Paramount stock sunk to $10.12 per share, down nearly 30% this year from $14.40, a drop Ariel Investments CEO John Rogers Jr., whose firm owns a 1% stake in the company, blamed on Ellison and Skydance.

But the share price rose to just above $12 after news broke on Thursday that Apollo is in talks with rival studio Sony about a joint bid, closing on Monday night at $12.38.

“The market is telling everyone that no one believes that David Ellison can do something that’s good for all shareholders in that the stock has traded so poorly, it’s gone down dramatically after all the rumors started. It’s highly, highly, highly unusual,” Rogers told TheWrap in an interview. “To have the stock continue to make new lows shows there’s no appetite for this transaction.”

Wall Street has urged Paramount’s independent special committee to consider Apollo’s offer to buy the entire company, arguing it would be a better deal for all shareholders.

But a source with knowledge of the discussions between Paramount and Skydance told TheWrap: “People are not yet aware of the full scale of the deal and the opportunities for shareholders.”

The post David Ellison May Be a Daredevil. But Is He Ready to Run Paramount? appeared first on TheWrap.
 


https://www.hollywoodreporter.com/b...-xfinity-cheap-streaming-tv-plans-1235876009/

Even Cable TV Giants Know That Consumers Prefer Streaming — But They’ve Got a Plan for That

Both Charter and Comcast have rolled out streaming TV packages for a fraction of the price of their cable TV counterparts ... but without live sports.

by Alex Weprin
April 23, 2024 - 12:07pm PDT

With cable TV service in a state of cord-cutting freefall, two of the biggest players in the space are leaning into a new strategy to try and stop the bleeding.

Comcast and Charter Communications are the two biggest pay-TV companies in the U.S., and the two largest broadband providers. But with TV subscribers falling quarter by quarter and year by year, in the last week both have launched products to try and placate consumers grappling with the sticker shock of total cable packages, replete with sports channels and niche offerings.

Charter on Tuesday launched what it is calling Spectrum TV Stream, which will provide 90 streaming channels for $40 per month. A&E, AMC, CNN, Discovery, Disney Channel, Fox News, FX, Hallmark, and HGTV are among the offerings. The streaming offering will be available to Spectrum internet customers.

The company also rolled out Spectrum Stream Latino, which will cost $25 per month and feature 45 Spanish-language channels.

“We are focused on creating more flexible, lower-cost video options for our customers that include a bundle of channels they want to watch,” said Sharon Peters, executive VP and CMO for Charter, in a statement. “With Spectrum TV Stream and Stream Latino, our customers now have the option to choose high-value, internet-delivered streaming TV packages that include the most popular news and entertainment networks and Spanish-language programming.”

And Comcast announced a new series of products under brand “NOW,” including prepaid internet and mobile plans, as well as NOW TV, a $20 per-month skinny streaming bundle with some 40 channels (including Food Network, A&E, AMC and Hallmark Channel), as well as Peacock Premium.

While Comcast initially launched its lite streaming vMVPD last year, it now lives within this larger ecosystem of low-cost NOW plans.

“Consumers have told us they want low-cost, easy-to-use connectivity and entertainment options that deliver the same reliability and consistency of our leading Xfinity services,” said Dave Watson, president and CEO of connectivity and platforms for Comcast. “With NOW, we’ve developed a new product construct from the ground up to be simple and easy for anybody who wants Internet, mobile or TV on their own terms without sacrificing quality. It rounds out our product offering to provide something for every consumer segment of the market and plays to our strengths in superior network capabilities, WiFi and streaming.”

Both services are only available to current internet customers of the two cable companies.

The new skinny streaming packages come as cable TV continues to dwindle. According to Leichtman Research, the top cable TV companies lost more than 3.8 million subscribers in 2023, with Comcast alone losing more than two million, and Charter over one million.

Virtual MVPDs like YouTube TV and Hulu with Live TV picked up some of that slack, adding nearly 1.9 million subscribers.

With consumers showing a preference for streaming as compared to linear, the cable companies — which are primarily in the broadband business anyway — are trying to give them what they want.

But there is still one piece missing from the puzzle: Live sports. To keep the prices low, the skinny bundles lack the sports channel that viewers know and love. And while Spectrum’s streaming bundle includes news channels, Comcast’s even lower-cost option does not.

While the Disney-Fox-Warner Bros. Discovery joint venture streaming service does not yet have a launch date or price, it is expected to cost more than $40 on its own, making it an unlikely complement to the offerings from Charter and Comcast.

With YouTube TV and Hulu with Live TV in the $75 per month range, the cable companies are betting that they can entice reluctant cord-cutters or cord-nevers to give their skinny bundles a try at a more accessible price point.

At the very least it suggests that Comcast — which owns NBCUniversal — and Charter, which has been seeking aggressive terms with streaming benefits in its carriage deals, are willing to do some experimentation to keep the pay-TV business going as long as possible.
 
https://www.bnnbloomberg.ca/nba-is-...disney-warner-bros-exclusivity-ends-1.2062783

NBA Is Free to Widen TV Talks as Disney, Warner Bros. Exclusivity Ends

by Randall Williams, Bloomberg News
April 23, 2024 at 11:37 AM CDT

(Bloomberg) -- The National Basketball Association’s exclusive period for discussing a new broadcast deal with Walt Disney Co. and Warner Bros. Discovery Inc. concluded Monday without an agreement, opening the way for talks with other potential bidders.

The league plans to continue negotiations with the parent companies of ESPN and the Turner networks over a renewal of their rights, an NBA spokesperson said in a statement.

The league’s current nine-year deal is worth about $24 billion. The league has been looking to double that fee, possibly by bringing in new partners, whether they be a traditional media company like Comcast Corp.’s NBC or streaming-focused ones such as Amazon.com Inc. or Apple Inc. NBA officials have been looking to add at least one more media outlet, but are open to a fourth if the right deal is found, according to a person familiar with their thinking.

Sports leagues from the National Football League to Major League Baseball have been divvying up their broadcast rights among partners as a way of boosting their fees and reaching broader audiences.

The NBA is negotiating the new rights agreements along with its female counterpart, the WNBA.

“I think it’s in the leagues’ interest to the extent we can do integrated deals,” NBA Commissioner Adam Silver said at a board of governor’s meeting this month. “The NBA promotes into the WNBA season and the WNBA promotes into the NBA.”

The WNBA media rights are held by Disney, E.W. Scripps Co., Paramount Global’s CBS and Amazon.
 
https://www.yahoo.com/entertainment/summer-box-office-graded-curve-130000583.html

The Summer Box Office Has to Be Graded on a Curve Yet Again
by Jeremy Fuster
Wed, April 24, 2024 at 8:00 AM CDT

Excluding the COVID impact on 2020 and 2021, this year marks the first time since 2006 that the summer moviegoing season won’t begin with a Marvel release during the first weekend of May.

The lack of a superheroic kickoff to blockbuster season is a glaring symptom of a larger reality: The disruption caused by the 2023 Hollywood strikes is going to limit how high the summer box office can climb.

Alongside Disney, which was forced to vacate its favorite MCU release slot, the strikes also pushed films like “Mission: Impossible 8” to 2025, with not much to take their place. It will take several major surprises — like 2023’s “Barbie” and “Oppenheimer” — to match last year’s $4 billion domestic total.

Insiders at analytics firm Gower Street, while leaving open the potential for upside, project a box office total of $3.3 billion in North America this summer, putting it in the neighborhood of the $3.39 billion total recorded in 2022.
From the get-go, because of the strikes any comparisons between this summer’s box office and those of past years will immediately be marked with a huge asterisk.

“This summer is a one-off, and I think everyone in the industry knows that,” Exhibitor Relations analyst Jeff Bock told TheWrap. “What I want to know is, how do these sequels play compared to last summer?”
Bock is holding out some optimism that despite a slow start, there may be some unexpected over-performance later in the summer.
summer box office totals

summer box office totals
Universal/87North’s original action romcom “The Fall Guy” may become a modest box office success if moviegoers have enough Kenergy in them to see Ryan Gosling in another comedic role. But it likely won’t bring theaters the $118 million opening or $358.9 million domestic run that “Guardians of the Galaxy Vol. 3” delivered in summer 2023.

“We’ve seen that Imax and other premium (large) formats help make these franchise films feel like big events, and the fact that more PLF-supported films are coming out across the summer may help some of those films do better than some of the sequels we saw last year,” he said.

Big guns arrive in July​


That premium support will come in July, when the season’s biggest titles arrive. Universal/Illumination’s “Despicable Me 4” could be the sole $1 billion-plus hit of the summer if it can top the $370 million domestic/$940 million global run of “Minions: The Rise of Gru” in 2022.

Marvel Studios’ “Deadpool & Wolverine,” due out on July 26, also has an outside chance of joining “Joker” as the second R-rated film to hit $1 billion. Though simply topping the $786 million global total of “Deadpool 2” would be a win for Disney, which inherited Ryan Reynolds and Hugh Jackman’s heroes in 2019 from the 20th Century Fox merger.

But the quantity of high-performing films is likely to be fewer. In 2023, 13 films grossed over $100 million at the domestic box office, including some surprises like Angel Studios’ cultural phenomenon “Sound of Freedom.” Among those movies, five grossed more than $250 million domestically: “Barbie,” “Oppenheimer,” “Guardians Vol. 3,” “Spider-Man: Across the Spider-Verse” and “The Little Mermaid.”

This year, a total of seven summer films are a lock to top $100 million domestically, based on the performance of their franchise predecessors:

  • “Deadpool 3” ($324.5 million for “Deadpool 2” in 2018)
  • “Despicable Me 4” ($370.2 million for “Minions: The Rise of Gru” in 2022)
  • “Kingdom of the Planet of the Apes” ($146.8 million for “War for the Planet of the Apes” in 2017)
  • “Furiosa” ($154.2 million for “Mad Max: Fury Road” in 2015)
  • “Bad Boys: Ride or Die” ($206.3 million for “Bad Boys for Life” in 2020)
  • “Inside Out 2” ($356.9 million for “Inside Out” in 2015)
  • “A Quiet Place: Day One” ($160 million for “A Quiet Place — Part II” in 2021)
Perhaps a handful of other films will reach the $100 million mark. In May, Paramount will try to draw in families without the help of a familiar IP with the original film “IF” from John Krasinski. And Sony’s “The Garfield Movie” will cater to parents and kids with lingering interest in the lasagna-loving tabby cat. The comic strip graced newspapers across the country but Garfield hasn’t demonstrated the same cultural staying power as Snoopy and the “Peanuts” gang.

In addition to “The Fall Guy,” Universal has “Twisters,” another film with a strong chance of becoming a $100 million-plus contributor. Starring Daisy Edgar-Jones and Glen Powell, the film faces the challenge of “Deadpool 3” hitting theaters one weekend after its release.

This summer is a one-off, and I think everyone in the industry knows that.
Exhibitor Relations analyst Jeff Bock
Click to expand...
Audience reception for the sequel to the 1996 Bill Paxton/Helen Hunt disaster film will have to be strong to keep it viable as a PG-13 alternative to violent late-summer titles such as “Deadpool 3,” “Borderlands” and “Alien: Romulus.” And the latter two of those will face an uphill battle to bring in audiences that aren’t just hardcore fans of their respective IP.

Beyond those franchise films, a handful of specialty titles will look to have breakout success, particularly in the middle of the summer. June 21 will be a big weekend for arthouses: Focus Features rolls out Tom Hardy and Austin Butler’s “The Bikeriders” nationwide while Searchlight begins a limited rollout of “Kinds of Kindness,” Yorgos Lanthimos and Emma Stone’s follow-up to their Oscar-winning “Poor Things,” which had a solid run as a prestige title last winter.

By this fall, the impact of the strikes should fully subside, giving way to a slate highlighted by sequels to “Venom” and “Joker” in October and “Wicked” and “Moana 2” at Thanksgiving. With those titles on the horizon, it wouldn’t be surprising to see the monthly totals for October or November exceed those of May or June. Such is the nature of this turbulent year for the film industry.

The post The Summer Box Office Has to Be Graded on a Curve Yet Again appeared first on TheWrap.
 


https://www.hollywoodreporter.com/b...it-report-nbcu-sony-disney-warner-1235880212/

Studio Profit Report: A Year of Major Transition​

Overall, only one studio unit among Hollywood conglomerates posted profit growth for the calendar year 2023 amid fast-paced change and disruption in the industry.

by Georg Szalai
April 24, 2024 9:42am PDT

It was another tumultuous year in Hollywood thanks to the dual labor strikes in 2023, the fallout on the film pipeline and the box office remaining below pre-COVID pandemic levels, among other factors.

The positive: The global box office jumped 31 percent to $33.9 billion, led by Barbenheimer. But TV studios’ financials were hit by pressure on these operations across the industry, including fallout from the dual labor disputes. What did all that mean for the studio divisions of Hollywood giants? Overall, only one studio unit among entertainment conglomerates posted profit growth for the calendar year 2023, per The Hollywood Reporter‘s calculations.

Keep in mind that financial disclosures for these units remain limited and are not easily comparable. The names alone vary: Paramount reports figures for its Filmed Entertainment unit, Warner Bros. Discovery and Comcast post results for their Studios divisions, and Sony has its Pictures unit. The businesses included in them differ as well. For instance, Sony’s Pictures segment includes TV networks. And Sony and others include their TV studios in the division.


And not all studios operations use the same accounting methodology, which makes direct comparisons difficult.

The annual Studio Profit Report also includes an educative look at Disney, even though it doesn’t disclose figures for its film or studios operations per se. THR is instead looking at Disney’s “content sales/licensing and other” financials, which observers say provide the closest comparable. Also, the figures below are for the calendar years 2023 and 2022, even though Disney and Sony have fiscal years that don’t align with the calendar year, and their executive teams manage their businesses with an eye on the fiscal year.

With all those caveats in mind as the backdrop, here’s a closer look at the bottom line of the film business in a time of fast-paced change. (See also: The Streaming Profit Report.)

NBCUniversal

Profit: $1.3B +35% year-over-year

Revenue: $11.6B -6% year-over-year

Super! X-large! The puns for Universal’s celebration of a year, in which it went nuclear (!) on the box office were
manifold.

The studio’s breakout year was led by the No. 2 film The Super Mario Bros. Movie with $1.36 billion in worldwide revenue in 2023, No. 3 Oppenheimer ($958 million) and No. 5 Fast X ($705 million). Those and the rest of its 24-movie slate drove the Donna Langley-led studio to $4.91 billion in global box office revenue in 2023, up 26 percent and allowing it to snatch the top spot from Disney, which had been the leader since 2016.

“Other revenue,” consisting of the sale of physical and digital home entertainment products, as well as the production and licensing of live stage plays and the distribution of content produced by third parties, climbed 1 percent to $1.3 billion. But one revenue category, content licensing, fell in 2023, to the tune of 12 percent, to $8.2 billion.

Universal cited “the timing of when content was made available by our television studios under licensing agreements, including the impact of the Writers Guild and SAG work stoppages in the current year, partially offset by the timing of when content was made available by our film studios.”

The studio unit’s bottom line was, however, helped by a more than 8 percent decline in expenses, led by a more than 9 percent drop in programming and production to just below $8 billion, helped by the strikes; a 7 percent decrease in marketing and promotion to below $1.6 billion; and a minimal decline in other costs to $818 million.

Comcast president Michael Cavanagh recently touted the studio’s strong talent relationships. “We are proud to work alongside our creative partners like Christopher Nolan, Chris Meledandri and Jason Blum, who are innovative industry leaders, to develop content that continues to delight audiences,” he said on the latest earnings conference call.

The unit could also celebrate that Oppenheimer’s best picture win at the Oscars and Universal’s topping the worldwide box office made the studio the first to achieve both those accolades in a single year.

Comcast management has also highlighted the studio segment as one of its six growth drivers, which also include Peacock, theme parks, as well as residential broadband, wireless and business services. Predicts Peter Supino, analyst at Wolfe Research: “The ‘Big 6’ growth businesses should exhibit solid revenue growth again in 2024 and beyond, more than offsetting legacy declines to produce 4 percent EBITDA growth in ’24.”

Warner Bros. Discovery

Profit: $2.2B -19% year-over-year

Revenue: $12.2B -12% year-over-year

It was think pink for Warner Bros. Discovery in 2023, even if its Studios unit saw its black ink shrink.

Warner’s Margot Robbie blockbuster Barbie led the box office in 2023 with $1.44 billion in worldwide revenue for the year, providing a big chunk of the studio’s $3.94 billion in total global theatrical revenue, up 61 percent from 2022.

The low-budget horror movie The Nun II was also a profitable success and Wonka found its audience, but DC blockbusters, such as Aquaman and the Lost Kingdom and The Flash, underperformed at the box office.

Hogwarts Legacy boosted the studio’s gaming revenue and profit for the year, while TV revenue was down, affecting the bottom line.

All in all, Studios unit revenue for the year dropped more than 10 percent, “primarily driven by lower TV revenues, which more than offset higher games revenue from the release of Hogwarts Legacy and higher theatrical revenue from the release of Barbie.” WBD explained that TV revenue was “adversely impacted by the WGA and SAG-AFTRA strikes and certain large licensing deals in the prior year,” as well as “fewer series sold to our owned platforms, and fewer CW series.”

Studios earnings took a nearly 20 percent hit, affected by the lower revenue and higher marketing expenses for a larger theatrical release slate, 13 movies compared to seven in 2022, and Hogwarts Legacy, “partially offset by lower TV content expense, commensurate with lower revenues.”

Still, WBD’s studios segment again brought in the biggest profit among Hollywood conglomerates, just like in 2022, 2021 and 2020.

A lack of 2024 guidance by WBD management spooked some on Wall Street, though. “Limited revenue disclosure across TV, film, and games products, theatrical, home entertainment, and licensing revenues, drives additional uncertainty in forecasting,” argued Morgan Stanley analyst Benjamin Swinburne in a recent report.

But Bank of America analyst Jessica Reif Ehrlich touted “several potential drivers that could improve the fundamentals of WBD’s business.” In terms on the studios segment, those include “a return of TV productions back toward pre-strike levels, increasing licensing of their deep valuable library, an improving film slate,” and “continued growth in the gaming business.”

The analyst team at MoffettNathanson forecasts studio unit revenue to edge up 1 percent in 2024 to nearly $12.3 billion, while operating expenses will only climb 0.3 percent. The experts therefore project 3.3 percent profit growth to nearly $2.3 billion in 2024, followed by further gains to $2.4 billion in 2025 and $2.5 billion in 2026.

Paramount Global

Profit: -$119M -144% year-over-year

Revenue: $3.0B -19% year-over-year

Blame Maverick! Paramount’s top theatrical performer of 2023 was Mission: Impossible — Dead Reckoning Part One, which brought in $567 million worldwide last year, about a quarter of the studio’s $2.09 billion worldwide box office haul in 2023. Management also touted five No. 1 debuts at the domestic box office. But added together, they couldn’t match the power of Top Gun: Maverick.

The studio released eight films in 2023, the lowest number of all Hollywood giants, but just as many as in 2022. Among them were also the likes of Transformers: Rise of the Beasts, PAW Patrol: The Mighty Movie, Scream VI, Dungeons & Dragons: Honor Among Thieves and Killers of the Flower Moon.

However, the company’s theatrical revenue of $813 million ended up 34 percent below 2022, while licensing and other revenue dropped 14 percent to $2.12 billion. Paramount’s overall filmed entertainment revenue fell 20 percent, which “primarily reflects lower theatrical and licensing revenues, driven by the success of Top Gun: Maverick in 2022,” the company said.

As a result of the revenue decline, as well as “incremental costs incurred during production shutdowns and lower revenues from studio rentals and production services,” the latter meaning the studio’s backlot business, Paramount’s filmed entertainment unit swung from a profit to a $119 million loss in 2023.

Management highlighted how much theatrical drives various other parts of Paramount’s business.

Turtles and PAW Patrol “had successful feature films,” Paramount CEO Bob Bakish said on the company’s third-quarter earnings conference call. “Films which also drove a broader ecosystem of consumption on linear, streaming and at retail. And we look forward to future extensions, including the release of a new Teenage Mutant Ninja Turtle series next year and a third PAW Patrol movie in 2026.”

Bakish noted on a recent earnings call, “As we move into 2024, we’re focused on producing content more efficiently and magnifying the impact of our slate. We’re improving return on investment (ROI) by lowering the average cost per title. This, by balancing high-budget tentpoles with more modest-cost titles, like Mean Girls and Bob Marley: One Love, improving the financial return on the overall slate.”

The analyst team at MoffettNathanson forecasts 5 percent revenue growth at Paramount’s Filmed Entertainment unit in 2024 to $3.1 billion, with its bottom line swinging back to a slight profit estimated at $20 million. For 2025 and 2026, the experts expect that to grow to $85 million and $100 million, respectively.

Sony Pictures

Profit: $719M -18% year-over-year

Revenue: $10.3B +2% year-over-year

Spider success wasn’t enough for Sony to catch a higher profit in the web of its Pictures unit, even though revenue recorded a slight upswing.

The studio’s biggest 2023 blockbuster was Spider-Man: Across the Spider-Verse, whose box office revenue reached $691 million to make it the studio’s highest-grossing animated film ever.

Other successes of the year included The Equalizer 3 and A Man Called Otto, while Gran Turismo and Napoleon underperformed expectations.

All in all, motion picture revenue fell 12 percent, including drops of 9 percent in theatrical, 31 percent in home entertainment, 6 percent in TV and more than 5 percent in streaming.

Sony’s TV Productions arm, though, managed to shine with a 15 percent revenue gain thanks to such hit shows as The Last of Us, Twisted Metal, the final season of The Crown and The Night Agent, and media networks revenue climbed 4 percent.

But despite the overall slight revenue gain, Sony’s Pictures unit posted a bottom line decline of 18 percent despite growth in three of the four quarters of calendar year 2023.

The culprit: a roughly 70 percent operating income drop in the second calendar year quarter due to such factors as “lower television and digital streaming service licensing revenues” after the year-ago period had “benefited from the contribution of several franchise films released theatrically in fiscal year 2021” and an “increase in marketing expenses in motion pictures in support of a greater number of theatrical releases.”

Management warned of the continuing impact of Hollywood strikes during its most recent earnings report and conference call. “Although the Hollywood strikes have finally ended, delays in script development have caused continued changes in movie release schedules and delays in the delivery of television shows,” Sony said, estimating the impact of the strikes on profits in the current fiscal year ending in March 2024 “to be a little less than 20 billion yen,” or $136 million. “Next fiscal year, in addition to continued delays in releases, it is expected that digital streaming licensing and other revenues will decline due to a decrease in the number of films released this fiscal year, so the negative impact on profits due to the strikes is expected to reach its peak and the amount of such impact on a U.S. dollar basis is expected to be slightly less than twice as much as in the current fiscal year.”

Disney

Profit: -$666M (the loss widened sharply from -$20M in 2022)

Revenue: $7.8B -8% year-over-year

The Mouse House is working on turning around its creative fortunes.

Disney had a slew of top 10 hits at the worldwide box office among its 17 releases of 2023, including Guardians of the Galaxy Vol. 3, the No. 4 with $846 million; No. 7, The Little Mermaid ($570 million); No. 9, Elemental ($496 million); and No. 10, Ant-Man and the Wasp: Quantumania ($476 million). It all added up to more than $4.8 billion, but that was down slightly from $4.9 billion in 2022 and meant the studio had to yield the worldwide box office crown to Universal.

Disney’s fiscal year ends in the fall, but THR crunched the numbers for calendar year 2023 to use figures for the same period as the company’s peers. That said, Disney’s financials aren’t directly comparable to other Hollywood giants. After all, since a reorganization for the streaming age a few years ago, it hasn’t reported results for a film or studios unit, instead posting financials for its “content sales/licensing and other” segment, which THR analyzed. Analysts see that as not comparable but as the closest equivalent to its former studio unit. The segment includes the sale of film and episodic television in TV/SVOD and home entertainment (some of which was previously reported as part of the giant’s media networks unit), distribution of films theatrically, licensing of music rights and its stage business.

Disney’s revenue for the 12 months of 2023 in this content segment dropped 8 percent, while its loss multiplied.

TV/SVOD distribution results were affected by lower sales volume of film and episodic TV content, which “included the impact of the shift from licensing our content to third parties to distributing it on our DTC streaming services,” the company said.

Plus, in its earnings reports last year, Disney repeatedly pointed to weaker theatrical performances than in 2022, including for The Haunted Mansion compared to Thor: Love and Thunder, or The Marvels and Wish compared to Black Panther: Wakanda Forever, Avatar: The Way of Water and Strange World in the prior-year period.

Disney CEO Bob Iger is focusing on “reinvigorating our creativity” and output. “Let’s not lose sight of the fact that in the last year, the studio had some real success, not to suggest that we didn’t have some films that were not successful, that we were really disappointed in,” Iger said on the latest earnings call. “Volume sometimes can be detrimental to quality. And in our zeal to greatly increase volume, partially tied to wanting to chase more global subs for our streaming platform, some of our studios lost a little focus. So the first step that we’ve taken is that we’ve reduced volume, we’ve reduced output, particularly at Marvel.”

Among the 2024 tentpole releases he touted were big brand names, such as Kingdom of the Planet of the Apes, Inside Out 2, Deadpool 3, Alien: Romulus and Mufasa: The Lion King.
 
https://www.cnbc.com/2024/04/25/comcast-cmcsa-earnings-1q24.html

Comcast beats earnings estimates even as it sheds more broadband subscribers

Published Thu, Apr 25 2024 - 6:30 AM EDT
by Lillian Rizzo@Lilliannnn

Key Points
  • Comcast posted quarterly earnings and revenue that beat expectations.
  • The company lost more broadband subscribers, but revenue increased due to rate increases.
Comcast beat first-quarter earnings expectations on Thursday, as broadband drove revenue even as the company and its peers have seen customer growth slow.

Here’s how Comcast performed, compared with estimates from analysts surveyed by LSEG:

  • Earnings per share: $1.04 adjusted vs. 99 cents expected
  • Revenue: $30.06 billion vs. $29.81 billion expected

For the quarter ended March 31, net income rose 0.6% to $3.86 billion, or 97 cents a share, compared with $3.83 billion, or 91 cents a share, a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) slid 0.6% to roughly $9.4 billion.

The company’s revenue grew 1.2% to $30.06 billion compared to the same period last year. Revenue from the domestic broadband customers segment boosted that growth as rates increased, even as Comcast lost 65,000 customers during the quarter.

Comcast’s wireless business saw a 21% increase in customers during the quarter to 6.9 million total lines. The company lost 487,000 cable TV customers during the quarter as consumers continued to cut the cord in favor of streaming.

The company’s theme parks adjusted EBITDA fell 3.9% to $632 million during the quarter, due to an increase in operating expenses like higher marketing and promotion costs, as well as the negative impact of foreign currency.

Similarly, earnings for its media business – which includes NBCUniversal – and studios also declined. The three businesses now report under the same segment, which collectively saw revenue rise 1.1% to $10.37 billion.

NBCUniversal got a boost from Peacock. The service added 3 million paid subscribers during the quarter, bringing its total number of customers to 34 million. Revenue for the streamer rose 54% to $1.1 billion compared to the same period last year. While domestic advertising was flat during the quarter, the company saw its domestic distribution revenue increase, driven by the growth at Peacock.

Losses stemming from Peacock weighed on the segment and offset higher revenue. The company saw an adjusted EBITDA loss of $639 million related to Peacock during the quarter. That improved, however, from an adjusted EBITDA loss of $704 million in the same period last year.

The streamer saw a boost after Universal Pictures’ Academy Award winner and blockbuster film “Oppenheimer” landed on the platform. Comcast said it was the most watched movie in Peacock history.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
 
Comcast ‘theme park’ profits (EBITDA) down vs last years quarter. 1st time post pandemic.

Comcast provides the most anaemic data about its theme parks so no idea why or where the profits are down.
 
clarker99 said:
Comcast ‘theme park’ profits (EBITDA) down vs last years quarter. 1st time post pandemic.

Comcast provides the most anaemic data about its theme parks so no idea why or where the profits are down.
Click to expand...
Found this:

https://www.msn.com/en-us/money/com...-bleeds-pay-tv-and-broadband-subs/ar-AA1nE8qB

The theme park division saw revenue rise 1.5% to $1.97 billion, led by higher revenue at its domestic theme parks, and adjusted EBITDA fall 3.9% to $632 million, reflecting higher operating expenses due to higher marketing and promotion costs and the negative impact of foreign currency, which more than offset higher revenue. Theme park operating expenses grew 4.3% to $1.34 billion.

"We started to feel some pressure on attendance levels late in the first quarter, which tends to occur in tandem with the ebbs and flows of new attractions in the market," Cavanagh said. "Right now, we happen to be lapping the multi-year surge in attendance from our opening of new attractions in prior periods."

Looking ahead, Comcast remains confident about the longer-term growth opportunities in its parks business as it prepares to open its Epic Universe theme park in 2025, which is intended to turn Universal Orlando into a weeklong destination and will feature three new hotels, five immersive worlds and more than 50 attractions, entertainment, dining and shopping experiences.
 
https://www.msn.com/en-us/sports/nb...amazon-youtube-vying-to-air-games/ar-AA1nF7xC

Amazon, YouTube Vie for NBA Streaming Rights as League’s Media Talks Heat Up
League is advancing toward lucrative deals with incumbent partners and is in talks with tech giants as well as NBCUniversal

By Joe Flint andIsabella Simonetti
April 25, 2024 - 1:40 pm EDT

The National Basketball Association is advancing toward a series of major media deals, with Amazon and Google’s YouTube vying for a new streaming package and NBCUniversal trying to grab one of the main TV deals held by Disney’s ESPN and Warner Bros. Discovery’s TNT.

Interest is high in the league’s next round of packages, which kick in after the 2024-2025 season. Disney, which pays around $1.6 billion a year for TV rights, and Warner, which pays about $1.2 billion a year, are in discussions to pay substantial increases under a new pact while airing fewer games than they do now, say people familiar with the conversations.

The robust pricing expected in the deals shows how valuable live sports are to traditional media companies at a time when cord-cutting is shrinking overall TV viewership. Many households maintain cable subscriptions because it is the only way to watch their favorite teams’ games.

Media-rights talks have been happening against the backdrop of the NBA playoffs. Warner Chief David Zaslav sat courtside Monday to watch the New York Knicks prevail in the final seconds against the Philadelphia 76ers, a game that aired on TNT. An exclusive negotiating window for Disney and Warner to renew their deals expired at midnight the same night, clearing the way for the league to have formal negotiations with other suitors as well.

Under their current deals, Disney and Warner carry roughly 165 games combined. Games taken from those incumbents would help the NBA create a new package for a streaming player with nationally televised regular-season games and some playoff contests. The league also could draw on a catalog of locally aired games.

Amazon’s Prime Video, which airs NFL games, has been aggressive in pursuing the streaming package and is viewed by league and media executives as the front-runner. YouTube is also in the mix, those executives say. The streaming package would give a tech giant the right to show games in markets around the world.

Among traditional media companies, NBCUniversal is jostling with Disney and Warner for a package. It is angling for regular-season and playoff games to show on NBC and its Peacock streaming service, as well as rights for NBC to share the NBA Finals with Disney’s ABC, according to some people familiar with the discussions.

Warner Discovery and Disney also have the right to match other offers, people with knowledge of the pacts said. The new deals could include language and terms that would potentially make enforcing a matching-right clause challenging.

The NBA discussions are fluid; negotiations with a streamer like Amazon could impact the way final deals are structured with TV partners, for example. Wrapping up and announcing all the deals could take several weeks.

In negotiating new long-term pacts, NBA Commissioner Adam Silver has said the league wants to significantly increase the scale of its rights deals and broaden the ways fans can watch games around the world. It is a strategy the NFL has also pursued, increasing rights fees from its incumbent media partners and crafting new agreements such as its deal with Amazon for “Thursday Night Football.”

Amazon, YouTube and NBCUniversal have invested in sports to boost their respective streaming services.

Retaining NBA rights is a high priority for both Disney and Warner. The league’s content helps them charge high fees to pay-TV distributors like Comcast and Spectrum to carry networks such as ESPN, ABC and TNT.

“What is the alternative programming you would replace those prime-time hours with,” said David Levy, a former Turner president who is now co-chief executive of the advisory firm Horizon Sports & Experiences.

Most scripted shows fail and the cost to market them isn’t cheap, he added. With sports, there is a “built-in fan base and you know pretty closely how the games are going to rate,” he said.

Securing the rights could help Disney and Warner with their respective streaming initiatives. ESPN is launching its own direct-to-consumer version of its popular cable channel and will want NBA games to help drive subscriptions.

Warner and Disney are joining with Fox Corp. on a new sports-centric streaming service set to launch in the late summer or early fall. Having a big chunk of NBA regular and postseason action is expected to be a major selling point for the as-yet unnamed platform.

Some on Wall Street have expressed concerns about media giants’ “sports at any cost” approach. Wolfe Research analyst Peter Supino downgraded Warner Discovery stock to underperform this week, citing the likely cost of a new NBA deal as a factor.

Amol Sharma and Sarah Krouse contributed to this article.

Write to Joe Flint at Joe.Flint@wsj.com and Isabella Simonetti at isabella.simonetti@wsj.com
 
Some more park details from the Comcast cc:

Starting with theme parks, revenue increased 2% while EBITDA decreased 4% for the quarter. These results reflect the negative impact of currency as the Japanese yen is at a 34-year low against the dollar. Adjusting the results to exclude the impact of foreign currency, parks revenue would have increased 5% and EBITDA would have been flat compared to last year’s first quarter. We had strong underlying growth at our park in Osaka, which continues to benefit from demand for Super Nintendo World. We’re also seeing growth in Hollywood despite lapping the opening of Super Nintendo World in that park during the quarter. Beijing results were relatively flat in what is typically a seasonally light quarter, and Orlando results were below last year but still roughly in line with pre-pandemic levels. We are seeing some pullback from the unprecedented attendance we realized immediately after the pandemic, which we believe is driven by the timing of new attraction openings and some increased competition from other entertainment venues, notably cruises.
--------
Hey Jessica, it’s Mike. On parks, as we’ve said, this is a year in 2024 where capex in parks and at NBC Universal overall will sustain at the level it was in ’23, so remain elevated. In ’25, when we open Epic, it will begin to step down, and then after that it will return to a more normal level, with adjustments for the Hollywood horror nights and the kids park in Frisco, Texas that we’ve talked about. But those, as we’ve said, are not of the same size and scale as a large park like Epic, so--but we do have a bigger footprint of parks than we did, say five years ago, so you’re right - part of the capital equation for parks is to continue to invest in new attractions within existing parks.

Again, once we get to ’26, you’ll see us easing into a new steady state that does include continued experimentation with some of our alternative concepts, and then certainly we hope over the longer term to come up with some ideas for bigger deployments of capital. That’s what we have in our plans as we sit here right now, but we love the business, and to the question of returns, we think the returns are very strong - we take a careful look at that every time we’re greenlighting a new park, and I think we like the stability of the long term nature of the returns. It’s us and one other great company that are world leaders in that level of park experience. The response to our parks has been phenomenal coming out of COVID, and so we see that being a place, live entertainment at the level we’re talking about being just a strong pillar of the media and entertainment side of the company for a long time ahead.

Then in terms of other areas, I think the success that we’ve had across parks and experiences are--you know, lead us to plenty of opportunities to think about gaming and other areas around live entertainment that go around and cross between our businesses. We experiment with things and we look, and it’s our job to see if there are great opportunities to do that, but nothing to report today.
 
https://www.cnbc.com/2024/04/25/paramount-skydance-inch-closer-to-a-merger-agreement.html

Paramount and Skydance inch closer to a merger as key hurdle looms

Published Thu, Apr 25 2024 - 3:36 PM EDT
by Alex Sherman@sherman4949

Key Points
  • Skydance Media and its private equity backers are targeting May to finalize terms on a deal with Paramount Global, sources told CNBC.
  • The biggest hurdle remaining to complete a deal is Paramount Global’s outstanding carriage renewal with Charter Communications.
  • Skydance’s plan would name David Ellison CEO of Paramount Global and former NBCUniversal CEO Jeff Shell as president, sources said.
Paramount Global and Skydance Media are making progress on a deal that would merge the media companies and buy out controlling shareholder Shari Redstone.

Paramount Global’s special committee and David Ellison’s Skydance Media, backed by private equity firms KKR and RedBird Capital Partners, are narrowing in on how to value Skydance’s assets as part of a merger as well as how much equity to add to the company as part of a recapitalization, according to people familiar with the matter.

The sides are close to agreeing on a value for Skydance, which will be valued around $5 billion and merged with Paramount Global, said the people, who asked not to be named because the discussions are private. Ellison and the private equity firms plan to raise roughly $4.5 billion to $5 billion in new equity. Some of that (about $2 billion) will be used to pay Redstone, and another substantial portion will be used to pay down debt.

The buyers would ideally like to get a deal done in May, said the people. Paramount Global was slow to open a data room to the Skydance consortium, said three of the people, which has slightly pushed back the timeline on a deal. The exclusivity window on merger talks ends May 3, but the Skydance consortium wants to extend it by two weeks, said the people.

Skydance’s plan is to name Ellison as CEO of Paramount Global and former NBCUniversal CEO Jeff Shell as the president, said two of the people. Current Paramount CEO Bob Bakish would depart the company, the people said.
Separately, Apollo and Sony have held preliminary discussions about teaming up for a deal that would buy out all Paramount Global shareholders at a premium, according to people familiar with the matter. The special committee hasn’t received concrete details on that offer and isn’t viewing it as a competitive bid to Skydance’s interest, two of the people said.

Still, the committee had more details on an initial offer made by Apollo, which it chose to ignore in favor of exclusive talks with Skydance. The special committee favored Skydance’s offer over Apollo’s in part because it offered shareholders future upside by keeping the company public with a cleaner balance sheet, one of the people said.

Spokespeople for Apollo, the Paramount Global special committee, Paramount Global, and Skydance’s consortium declined to comment.

Last big hurdle

One significant hurdle that remains is Paramount Global’s renewal agreement with Charter Communications for CBS and its cable networks. That deal is relevant to the value of Paramount Global, which could take a hit if Charter drops the networks or agrees to a lower carriage rate, the people said.

The deadline for that agreement is April 30. Paramount Global reports first-quarter earnings one day earlier, on April 29.

Paramount Global is still dependent on its traditional TV business, which accounts for about two-thirds of the company’s total revenue.

There are signs Charter could prove to be a tough negotiator with Paramount Global: Last year the cable provider, the second-largest in the U.S., briefly stopped carrying Disney’s networks when renewal negotiations between those two companies faltered. (The parties reached a deal 10 days later.)

Paramount’s cable networks are far less popular than Disney’s ESPN, which may put Bakish in a position of weakness.
The timing of the renewal and the deal talks set up an awkward dynamic, where Bakish, who would ultimately leave the company under a Skydance merger, will control Paramount Global’s fate with Charter.

Thus far, Bakish has always reached renewal deals with the major pay-TV distributors since taking over as CEO, dating back to his time running Viacom, beginning in 2016.

Bakish has privately argued against the Skydance deal because it dilutes common shareholders, according to people familiar with the matter. Several Paramount Global investors have also publicly written letters to the company’s board urging directors not to move forward with a Skydance deal, arguing it gives Redstone a massive premium for her controlling shares while leaving common shareholders out in the cold.

Under the terms of the deal, nearly 50% of the company will be owned by Skydance and its private equity partners, CNBC reported earlier this month. The rest of the company would be owned by common shareholders, and the company will continue to trade publicly.

“At Paramount, we’re always looking for ways to create shareholder value. And to be clear, that’s for all shareholders,” Bakish said during his company’s most recent earnings call in February.

Disclosure: NBCUniversal is the parent company of CNBC.
 
https://variety.com/vip/should-netflix-rivals-stop-disclosing-subscriber-numbers-1235982382/

April 26, 2024 6:00am PT
by Tyler Aquilina
Should Netflix Rivals Imitate Its Decision to Stop Disclosing Subscriber Numbers?

Is Netflix about to disrupt the entertainment industry yet again?

The news that the streaming giant will stop regularly reporting its subscriber numbers may seem, at first glance, likely to shake up the established standards for data transparency in the SVOD business. If the streaming wars’ champion no longer feels the need to tout its subscriber totals, why would anyone else want to disclose a comparatively paltry user base?

But as much as rival streamers love to imitate Netflix, this is one maneuver the legacy media players may be ill-advised to copy. Because while the strategy makes some measure of sense for Netflix, it would be unlikely to benefit its major competitors.

Netflix is unique among the major streamers in that its subscriber totals still largely (though not completely) dictate its stock price, with shares often rising and falling on the strength of the platform’s quarterly additions. Indeed, it’s profoundly ironic that the Great Netflix Correction prompted Wall Street to start scrutinizing SVOD financials more closely, when it was a reaction to subscriber totals, rather than financial metrics, that caused the correction in the first place.

But such is the nature of the pure-play streaming business model: The most obvious success metric for subscription streaming becomes investors’ default success metric for Netflix as a whole.
Ceasing to report those numbers will therefore likely benefit Netflix shareholders in the long run, as irritating as this may be to data-loving analysts (yours truly included).

The streamer’s leaders can obviously foresee a day when the service’s subscriber growth will start to slow or reverse again — perhaps soon, as the payout from its password-sharing crackdown dries up — and are seeking to avoid another investor panic when that inevitably happens.

And while the Street has reacted adversely to the news thus far, investors won’t have much to complain about if the company continues growing its revenues and profit at a healthy clip. Focusing attention on topline numbers could also help alleviate concerns that Netflix’s narrative may grow overly complicated as it diversifies its business, with advertising likely to begin contributing more significantly to revenues going forward and an aggressive push into video games coming down the pike.

In short, this is a strategic move Netflix’s leadership seems to have considered quite carefully — and the last thing any of its rivals should do is rush to copy it.

The traditional media companies are still under pressure to grow their streaming operations and, moreover, to prove these operations can become long-term growth engines as their legacy businesses decline. And none are particularly close to doing so, Warner Bros. Discovery’s slim 2023 profit aside.

Subscriber totals may not be the be-all, end-all of streaming success they once were, but they remain key growth metrics as media companies try to wrangle their losses lower each quarter. Where Netflix has by far the healthiest financial metrics of the major SVODs and can afford to focus investors’ attention on those metrics, its rivals need every bit of evidence they can muster to support their growth narratives.

Last year, for instance, Disney shares saw its largest single-day drop since Bob Iger returned as CEO after the Mouse House reported shedding 4 million Disney+ subscribers in the previous quarter. This despite the fact that Iger managed to shrink the company’s direct-to-consumer operating loss by 26% year-over-year that quarter.

Ultimately, Netflix’s new subscriber black box will simply be yet another marker of what the streamer has always been: a tech company with Hollywood-studio ambitions, much like its compatriots Amazon and Apple (which have never reported their streaming subscribers publicly). And in the long run, the black box’s greatest legacy could be helping to push Netflix shares further toward the rarefied heights of those two tech behemoths.
 
https://www.msn.com/en-us/money/com...s-turmoil-over-sale-talks-deepens/ar-AA1nJvdR

Paramount Considers Removing CEO Bob Bakish as Turmoil Over Sale Talks Deepens
Entertainment giant would install a committee of top executives to run an ‘Office of the CEO’ on an interim basis; no decision has been made on Bakish’s future

By Jessica Toonkel
Updated April 26, 2024 - 2:24 pm EDT

Paramount Global’s board is considering replacing Chief Executive Bob Bakish and installing a committee of top executives to run the entertainment giant on an interim basis, according to people familiar with the situation, a stunning move that would come as the company explores a sale.

Under the plan being discussed, the board of Paramount and controlling shareholder National Amusements—helmed by Shari Redstone—would put in place an “Office of the CEO,” made up of the company’s division heads, upon Bakish’s departure, some of the people said.

No decision has been made about Bakish’s future and it is possible the board could keep him in place.

Bakish was named CEO of Viacom in 2016 and continued in the top post after Redstone merged the company with CBS, the other wing of her family’s media empire, in 2019. He was chosen partly because of his shrewd management of Viacom’s international operations, which had been a growth engine.

Redstone and some board members have soured on Bakish’s leadership over time, questioning whether he pursued strategic opportunities for the company aggressively enough, including a potential sale of the Showtime channel. Some senior leaders at Paramount also have raised concerns internally about Bakish’s stewardship.

Over the past several years, Paramount, home to brands such as CBS, MTV, Nickelodeon and the Paramount film studio, has struggled as its legacy cable TV business has continued to erode, while its streaming service is growing quickly but not generating profits. Paramount’s market value has fallen from $25.3 billion in 2019 to $8.4 billion now.

Bakish’s backers say he has put the company on the map in streaming with the launch of Paramount+ and the acquisition of Pluto TV, an ad-supported service, maintained CBS in a strong industry position and managed to negotiate TV distribution deals even as consumer cord-cutting puts pressure on the entire cable business.

Removing Bakish would add more confusion to an already-thorny sale process the company has been pursuing, and would raise questions about whether Paramount is in line for major changes in operational strategy.

Paramount is currently in exclusive merger talks with Skydance Media, a production company backed by the family of Oracle co-founder Larry Ellison.

Under the proposed transaction, Skydance’s backers would pay roughly $2 billion in cash for control of National Amusements, which has a 77% voting stake in Paramount and owns a chain of movie theaters.

In the second step of the deal, Paramount would merge with Skydance in a $5 billion, all-stock transaction. Many shareholders have complained that the deal would favor Redstone’s National Amusements, giving it a cash premium while leaving other, nonvoting shareholders with diluted stock in Paramount.

The exclusivity window for the negotiations between Paramount and Skydance expires on May 3. It is unclear if exclusive negotiations will be extended. Paramount reports earnings on Monday.

Bakish has told investors that executing the Skydance deal would be challenging. An independent committee of the board has been tasked with weighing the best course for all shareholders, and has another potential option that some shareholders say they would prefer: a $26 billion, all-cash offer for Paramount from Apollo Global Management.

The board had concerns about Apollo’s bid, including whether it could arrange financing for a deal, people familiar with the situation said. Since then, Apollo has discussed teaming up with Sony Pictures on a potential bid.

Redstone succeeded her father, media mogul Sumner Redstone, after a yearslong battle with his top lieutenants and associates, taking pole position in the empire in 2016.

Tensions between Redstone and Bakish have been growing. She told associates that as Skydance talks were proceeding, Bakish was pursuing other deal conversations, including over a potential streaming partnership with Comcast, without keeping her or the board in the loop, say people familiar with the situation. Bakish and the cable giant had discussed a potential joint venture between Paramount+ and Comcast’s Peacock, The Wall Street Journal reported in February.

Redstone also has placed blame on Bakish for the company’s overall predicament and what she views as missed chances to strike sound deals. She was open to selling the Showtime premium channel, people close to her camp say. Bakish turned down Showtime bids in recent years, and ultimately integrated its programming into a souped-up version of the Paramount+ streaming service.

Bakish is credited in the industry for pushing Paramount into the ad-supported streaming world with the 2019 acquisition of Pluto TV, one of the leading players in the sector. While less glamorous than subscription services like Netflix or Disney+, services like Pluto cater to the tens of millions of consumers looking for free access to shows and movies, and have been popular with advertisers.

Paramount’s fundamental business challenge is that TV isn’t growing, but continues to be the biggest source of its profits. Last year, revenue in its TV and media segment fell 8% to about $20 billion, while profits in the segment fell 12% to about $4.8 billion.

Streaming posted healthy revenue growth of 37% last year, with a lot of customers joining Paramount+, but the streaming operations posted a $1.7 billion adjusted operating loss.

The company has said that Paramount+ will hit domestic profitability in 2025. Other big media companies like Disney and Comcast are also struggling to turn a profit on streaming. Overall, revenue at Paramount grew 2% in 2023 to about $30 billion.

As the drama over its leadership and potential deals plays out, Paramount is in high-stakes negotiations with cable provider Charter over carriage of its channels, including MTV, Comedy Central, Nickelodeon and others, with the current distribution agreement set to expire at the end of this month.

Write to Jessica Toonkel at jessica.toonkel@wsj.com
 
https://finance.yahoo.com/news/ariel-investments-demands-paramount-explain-021535820.html

Ariel Investments Demands Paramount Explain ‘Disturbing’ Board Departures Amid Skydance Exclusive Talks
by Lucas Manfredi
Fri, Apr 26, 2024, 9:15 PM CDT

Ariel Investments is calling on Paramount Global to provide more transparency into its recent board changes and ongoing merger talks with Skydance Media.

The firm, which owned a 1.8% stake in Paramount as of the end of 2023, recently expressed concerns about the exclusive discussions with David Ellison, arguing that sidestepping competitive bidding would be “averse to fair market value.” It also warned that any transaction that benefits controlling shareholder Shari Redstone at the expense of the rest of Paramount’s investors is “unacceptable.”

In a letter to clients on Friday, Ariel Investments co-CEOs John Rogers Jr. and Mellody Hobson said they were surprised by the announcement that four members of the Paramount board — including three who are on the independent special committee evaluating bids — are exiting following the upcoming annual meeting. In its proxy filing, the media conglomerate revealed that it would reduce the size of the board rather than replace them, but did not provide any additional context on the departures.

“This timing was particularly disturbing given the falling share price. The lack of explanation or context in the company’s proxy filing regarding these changes alarmed us, too,” the pair said. “In the absence of any company-issued information regarding the merger, the reasons for the upcoming director departures or the board downsizing, we believed it was our fiduciary duty to publicly share our concerns.”

Rogers Jr. and Hobson called on Paramount to provide an explanation on the recent governance changes and ensure that the remaining members are “substantively independent and can fulfill its requirements and fiduciary duties in accordance with Delaware law.”

“Not doing so would deeply harm Paramount as well as shareholders like us who firmly believe in the company’s underlying value,” they said.

They also urged the board to ensure any transaction is “focused on realizing the company’s existing and long-term value and does not merely grant a premium to a single controlling shareholder.”

“If rumors are true, the litigation that will ensue against Paramount and its leadership will be materially detrimental to the value of the company,” the pair continued. “To this last point, investors should not have to rely on rumors, speculation and the media to consider such serious corporate dealings. Transparent corporate filings and statements would end the obfuscation that is whipsawing the stock.”

Additionally, the firm requested that the board engage in a competitive bidding process to maximize the value of the company’s assets for the benefit of all shareholders.

“Given the diminished Class B share price, it is clear to us that the market does not believe an exclusive deal with the currently proposed party will be good for all shareholders,” they said. “Usually, when merger transactions are announced, the shares find some equilibrium between the beginning price and the speculated ending price. With the stock having touched new lows, Paramount’s investors are voting with their feet. The lack of disclosures, questions surrounding board governance and company leadership as well as anticipation related to dilution from the rumored transaction have caused a repricing of the stock.”

While acknowledging that they “remain troubled” by Paramount’s silence, Rogers Jr. and Hobson said that they “never sell into chaos” and are “comfortable holding Paramount because the underlying value of the company’s content and studio assets are worth far more than its recent share price.”

“At Ariel, our patient investment philosophy resists knee-jerk reactions. Still, we diligently and continually assess changing conditions. We are concerned about the changing conditions at Paramount and do not believe the company should rush any merger, particularly under an exclusivity deal and with a controlling premium,” the letter concluded. “Instead, the company and board have a fiduciary duty and obligation to take the time needed to seek the right deal with the right partners at a price that will drive long-term success for all. We will continue to closely monitor this unusual situation. While not activist investors, we will advocate for a good outcome at Paramount for our clients and mutual fund shareholders.”

In an interview with TheWrap, Rogers Jr. revealed that Ariel Investments would not rule out litigation and that it has already engaged in preliminary discussions with outside counsel.

The letter comes as Skydance and Paramount continue to make progress in hammering out the details of a potential deal ahead of the expiration of its exclusivity window on May 3. It’s unclear if talks will be extended beyond that date.
Apollo Global Management has also made a $26 billion all-cash offer for Paramount, though that bid was reportedly rebuffed due to concerns about financing. The private equity firm has since entered talks with Sony Pictures Entertainment about the possibility of making a joint bid for Paramount, though no formal offer has been made.

In addition to Ariel Investments, other investors who have expressed their opposition to Skydance’s bid include Matrix Asset Advisors, Aspen Sky Trust and Blackwood Capital Management. GAMCO Investors Inc. chairman and CEO Mario Gabelli also previously warned he could pursue litigation if the Skydance deal or any other bid does not appropriately benefit their clients.

Shares of Paramount are up 11% in the past six months, but have fallen 48% in the past year and 17% year to date. The company’s market capitalization sits at $8.3 billion as of Friday’s close.

The post Ariel Investments Demands Paramount Explain ‘Disturbing’ Board Departures Amid Skydance Exclusive Talks appeared first on TheWrap.
 
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