Paramount is considering selling a majority stake in BET Media

Shari Redstone, chairman of ViacomCBS and president of National Entertainment, and Bob Bakish, president and CEO of ViacomCBS celebrate the merger of their companies on Dec. 5, 2019 at the Nasdaq MarketSite in New York.

Brendan McDermid | Reuters

Paramount Global BET Media Group, owner of the BET cable network and studio, VH1 and streaming service BET+, is considering selling a majority stake, people familiar with the matter said.

Paramount executives believe BET could be valued by a consortium of ultra-wealthy black individuals and institutions, which could unlock the value of the media asset in ways more difficult than under its current corporate ownership, the people said, speaking on condition of anonymity. Discussions are private.

Talks are in their early stages and no deal is guaranteed, the people said. A Paramount spokesman declined to comment. The talks were first reported by the Wall Street Journal.

For BET Group, the sale talks do not represent a broader strategy to begin selling off parts of Paramount, the people said. Paramount Global recently rejected a $3 billion deal for premium cable network Showtime, according to a Wall Street Journal report.

While Paramount Global’s other assets are closely tied to its flagship streaming service Paramount+, BET has its own streaming service, its own ad sales team and an investment from actor and producer Tyler Perry. That would make the sale of most of the shares cleaner than a potential sale of other assets in Paramount, one of the people said.

The sale of a majority stake in BET Group will give Paramount Global additional capital to invest in programming for Paramount+ and Pluto TV, its ad-supported free streaming service. Paramount Global said its streaming business lost $575 million last quarter.

On Dec. 31, Paramount+, which has nearly 56 million subscribers, recently announced that it will merge with Showtime later this year. As the company soon integrates its streaming services, subscription prices for the various tiers of Paramount+ will increase.

Premium cable network Showtime will also begin airing Paramount+ content and will be rebranded as Showtime with Paramount+.

Paramount Global wants to retain a minority stake in BET Media Group so it can continue a commercial relationship with the company, including airing some of its programming on Paramount+, the people said. Paramount sold VH1 to BET Media Group in October. The cable network will be included in the sale, the people said.

BET Media Group is led by BET CEO Scott Mills.

Paramount+ added 9.9 million customers in the fourth quarter. The company said the quarterly increase in subscribers could be attributed to content on its CBS network, including NFL games, cable TV, movies like “Top Gun: Maverick” and original programming related to hit franchises like “Yellowstone.” ” and “Criminal Minds”.

— CNBC’s Lillian Rizzo contributed to this article.

SEE: Cramer Lightning Round: Buy, Buy, Buy If Paramount Global Falls!

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