2024-05-11 12:00:10
At 70, Shari Redstone is once again at a crossroads. For years, she had fought to reunite in 2019 the media empire created by her father, the emblematic but angry Sumner Redstone. Despite an immense catalog ranging from “Star Trek” to “Sponge Bob”, Paramount Global is suffering: in the United States, the cable crisis is impacting its channels (CBS, MTV, etc.) and its streaming service is struggling to break through against the leader Netflix.
Paramount Global’s difficulties are such that in recent months Shari Redstone has been converted to the idea of a sale. She was undoubtedly also pushed by the prospect of leaving the keys to her group to another heir whom she knows well, David Ellison, the son of the founder of Oracle. An aerobatic pilot, this forty-year-old has already made great progress in his other favorite field, cinema. His company, Skydance, co-produced several hit films with Paramount, including “Top Gun: Maverick.”
Brain teaser
But here it is: Paramount’s capital structure – designed to lock in family control – is a source of new headaches for Shari Redstone. At the beginning of May, Skydance’s takeover offer – which guaranteed a bonus to the Redstone family holding company and promised a revival of Paramount – did not overcome the revolt of shareholders without voting rights. At Paramount, a special committee is now studying another takeover proposal from Apollo and Sony.
It is therefore in spite of herself that this native of Boston finds herself in the fray. However, she knows how to be combative like her father. After Sumner Redstone’s decision to split his empire in two (Viacom and CBS) in 2006, they even found themselves only communicating by fax!
Succession battles
Excluded from family affairs for a time, disowned by her father, Shari Redstone had to wage multiple legal battles during the 2010s against Sumner’s two mistresses, against the Viacom staff… This is definitely not a coincidence if the “Succession” series would have been inspired as much by the Murdochs as by the Redstones.
Shari Redstone manages to become essential again for her father, who died in 2020 at age 97. To win, the heiress also had to thwart a “putsch” attempt in 2018 by Les Moonves, the former boss of CBS. The latter falls because of a sexual harassment case.
Assets coveted by Netflix
In 2019, CBS and Viacom merged under his influence. That same year, Rupert Murdoch sold Fox to Disney; launched in 2016, the AT&T-Time Warner merger was relatively fresh (AT&T will sell Warner Bros. to Discovery in 2022); Amazon will take over the MGM studios in 2021… The Redstone assets were also highly coveted: rumor has it that even Netflix would have tried an approach. Not a salesperson at the time, Shari Redstone left it to CEO Bob Bakish to orchestrate an offensive in streaming, both free (purchase of Pluto TV in 2019) and paid with Paramount + from 2021. But the streaming market was already quite crowded.
In this context, Bob Bakish’s decision a year ago to drastically reduce dividends also impacted the Redstone family holding company, National Amusements, which holds less than 10% of the media giant’s capital but 77% of the voting rights. . What undoubtedly cools the relations between Shari Redstone and the CEO of Paramount. And Bob Bakish’s reluctance to have his group absorbed by a smaller rival like Skydance probably sealed his fate. He was replaced at the end of April by a troika of executives.
Financial difficulties
Also the operator of a network of cinemas, National Amusements had also suffered in recent years due to cinema closures, then the drop in attendance after the pandemic. Its financial health therefore depends very largely on what Paramount pays it.
But, according to the American press, Shari Redstone’s desire to separate from a media empire that is increasingly complicated to manage increased after the attacks perpetrated by Hamas on October 7 in Israel. A descendant of Jewish immigrants from Eastern Europe, the non-executive president of Paramount said publicly in December that her life had been turned upside down by this shock.
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