When the media executive Edgar Bronfman Jr. submitted his last-ditch bid on Monday to take control of Paramount, his approach was greeted with surprise and skepticism. Who would take his unconventional coalition of investors seriously, especially when an $8 billion deal with Skydance was on the table?
Later in the week, the answer came emphatically: Paramount.
The bid has transformed Paramount’s sale into a battle of family dynasties. Skydance’s founder, David Ellison, who is the son of the Oracle founder Larry Ellison, has struck an agreement with Shari Redstone to take over Paramount, a media empire assembled by her father. But the deal is now threatened by the bid from Bronfman — a grandson of the Seagram mogul Samuel Bronfman — whose early foray steering the family business into media several decades ago has left a cloud over his career.
Bronfman, no stranger to doubters, somehow corralled billions in commitments for the bid, refined his list of investors and persuaded a special committee of Paramount’s board of directors to extend the “go shop” window in the company’s agreement with Skydance in order to consider it.
The son of one billionaire is now pitted against the son of another.
“He’s been craving a media empire since the 1980s, and Paramount is a great studio with a lot of upside potential,” Terry Kawaja, the founder of Luma Partners, a boutique bank, said of Bronfman.
“If you’re the billionaire son of a billionaire, it’s the ultimate asset.”
Across Wall Street and Hollywood, Bronfman is a polarizing figure. Depending on whom you ask, he’s either the hapless heir who steered Seagrams into a catastrophic merger with Vivendi in 2000 or the misunderstood mogul who fought his way back from a bad deal to prove his mettle with success at Warner Music Group.
Bronfman’s résumé is further complicated by a conviction for insider trading in 2011 under French law, which resulted in a $6.8 million fine and a 15-month suspended sentence. At the time of his conviction, he said his trades were aboveboard.
Bronfman has been working on a Paramount bid since March, according to four people familiar with the matter, who asked not to be named because the negotiations are confidential. After Paramount allowed its exclusive period for negotiations with Skydance to lapse this spring, Bronfman pitched Paramount’s board and lined up a potential financier, Bain Capital, which began to vet the investment.
But talks with Paramount were slow, and the company signed a deal with Skydance in July before Bain Capital could complete its due diligence, the people said. When Bain dropped out, Bronfman pursued other backers in a last-minute attempt to compete with Skydance. That coalition initially included some surprising media investors, like Brock Pierce, the crypto kingpin who appeared in two “Mighty Ducks” movies as a child. Bronfman has since honed his list of investors, one of the people said.
He has also brought on a number of experienced executives to bolster his bid, including the former Turner C.E.O. John Martin (who was introduced to Bronfman by the former Time Warner C.E.O. Jeff Bewkes) and the veteran media executive Jonathan Miller, three people familiar with his bid said.
In addition to courting the Redstone family, Bronfman has had dinner with George Cheeks, the top executive of CBS; Brian Robbins, the head of Paramount Pictures; and Chris McCarthy, the head of Paramount Media Networks and Showtime/MTV Entertainment Studios, three people familiar with the meetings said. Cheeks, Robbins and McCarthy serve as Paramount’s co-C.E.O.s.
Bronfman’s bid faces steep odds. Aside from Skydance’s deep pockets, skeptics of his bid point to Bronfman’s large consortium of investors, which may not be feasible for Paramount’s special committee to vet before the “go shop” period expires in early September. If Paramount goes with another suitor, the company is on the hook for a $400 million breakup fee with Skydance, raising the cost of exploring alternatives.
And if any of Bronfman’s crucial investors drop out — or come up short — they could imperil the bid.
One of Bronfman’s most reputable backers, Fortress Investment Group, is partly owned by Mubadala Investment Company, a sovereign wealth fund controlled by the United Arab Emirates. Critics of Bronfman’s deal say Fortress’s involvement could pose foreign ownership concerns, which are particularly heightened in this deal because Paramount owns CBS.
But a person familiar with Bronfman’s proposal pushed back on that criticism. Fortress and BC Partners Credit, the two biggest institutional investors in Bronfman’s group, are contributing roughly 20 percent of the capital, reducing foreign ownership risk. And Fortress, which is based in the United States, is controlled by a board of directors appointed by its partners, which could assure regulators scrutinizing the deal.
Skydance has been working behind the scenes to raise concerns about Bronfman’s bid. The studio submitted a letter to Paramount’s special committee this week accusing the company of violating provisions of its “go shop” window and requesting that it halt negotiations with Bronfman. The committee has proceeded with negotiations anyway, a person familiar with the matter said.
Bronfman’s pitch. He argues that his deal is better for Paramount’s nonvoting shareholders, many of whom felt jilted by Skydance’s deal, two people familiar with the matter said. But analysts say the question of which deal is better for nonvoting shareholders may not yet have a clear-cut answer.
Ellison is offering shareholders more cash but effectively no control. And he is asking them to dilute their shares by absorbing Skydance, a business whose value has not yet been tested by the public market.
While the details of Bronfman’s final offer are still being worked through, he is likely to offer shareholders less cash, a full vote and an executive (himself) who has run a large public company.
“I’m a firm supporter of Edgar Bronfman,” said Barry Diller, the founder of IAC. “Yes, he’s been a friend for decades, but he’s savvy and dedicated and decent as well as an accomplished manager — it will be in good hands if he gets it.”
Could he actually turn Paramount around? Bronfman sees similarities between the challenges facing Paramount and those facing Warner Music Group, which he led an investor group to acquire for roughly $2.6 billion in 2003, three people familiar with his thinking said.
Bronfman reshaped Warner Music Group for the digital age, and under his leadership, Atlantic Records, one of its units, became the first major record label to generate more than half its sales from digital products. Bronfman sold Warner Music Group for $3.3 billion eight years after he acquired it.
Since that deal, Bronfman has kept his profile relatively low, including as a co-founder of the venture firm Waverley Capital. He has served as executive chairman at Fubo since 2020.
Ultimately, though, Bronfman must not only lay out a vision for Paramount but earn the trust of Redstone, its controlling shareholder, as she grapples with the prospect of relinquishing her media empire. The question is whether she will give Bronfman another chance at running a family business. — Lauren Hirsch and Ben Mullin
IN CASE YOU MISSED IT
Jerome Powell said “the time has come” to lower interest rates. In his Jackson Hole speech, the Fed chair stopped short of saying how big a cut to expect, but it was his clearest statement yet that the central bank is likely to make a move at next month’s meeting. He added that he was “confident” that the inflation risk had receded enough, leaving the central bank room to lower its prime lending rate for the first time in four years.
Ford taps the brakes on its electric vehicle strategy. The carmaker said it would delay the introduction of a new battery-powered pickup truck, scrap a three-row electric S.U.V. and reduce overall spending on E.V.s in an effort to stem losses. Elsewhere, General Motors laid off 1,000 workers, including in a division that houses its OnStar connected-car business.
A British software tycoon died when his yacht sank. Mike Lynch, who was once known as Britain’s Bill Gates, and six others died on Monday when his luxury sailing vessel was caught in a violent storm off the coast of Sicily. Lynch was celebrating his acquittal of fraud charges in June, ending a nearly 13-year legal ordeal that played out on two continents. Other victims included Christopher Morvillo, one of his lead lawyers, and Lynch’s 18-year-old daughter, Hannah.
The N.F.L. may soon allow private equity
For more than a century, National Football League owners have been an exclusive club. With rules that place tough restrictions on who is allowed to buy teams — and how those purchases can be financed — only the extremely wealthy can afford to join. Now they’re on the cusp of admitting a new kind of member.
At a meeting next week in Eagan, Minn., N.F.L. owners are expected to approve rules that would allow certain private equity firms to buy as much as 10 percent of a team.
The move would help owners solve a liquidity problem. As team valuations have soared — the Washington Commanders sold for $6.05 billion last year — the number of potential buyers has fallen. Finding limited partners has also become more difficult because they have no voting rights yet must tie up tens and even hundreds of millions of dollars. Allowing investments from private equity could make it easier to put together a deal.
The N.F.L. would be the last major sports league to allow private equity firms to become minority owners, and its approach is more conservative than leagues like the National Basketball Association, which allows private equity firms to own up to 30 percent of a team. If the new rules pass, only a handful of anointed private equity firms will be able to invest in teams.
The Times’s Ken Belson and DealBook’s Lauren Hirsch dig into what’s at stake, and what happens next.
Who’s in? The N.F.L. has whittled the potential list of permitted private equity investors to just a handful of firms. They include firms that focus on sports, like Arctos Partners and Dynasty Equity, as well as larger firms like Blackstone, CVC Capital Partners and Carlyle Group, which expanded its sports with its recent purchase of the women’s soccer team Seattle Reign F.C. The firms were reported earlier by Sportico.
Who’s out? Almost as interesting to Wall Street insiders are which firms are not on the list, including RedBird Capital Partners, which has a licensing deal for the N.F.L.’s Sunday Ticket games. The firm was in talks to be among those investing in the league but became conflicted because of its involvement in the proposed acquisition of Paramount, which carries N.F.L. games on CBS and its streaming service, Paramount+, a person familiar with the negotiations said. The person requested anonymity because the negotiations are confidential.
What now? If owners approve the proposed changes on Tuesday, those who want to sell stakes could then apply to the league’s finance committee. After the committee vets the applications, approval of each application would be put to a vote by all owners, potentially as soon as the next meeting of owners in October.
Which team will make the first deal? Bankers say owners whose wealth is tied up in the league may be most eager. Other favorite guesses include the Buffalo Bills owner Terry Pegula, who reportedly wants to sell a stake in his club to help pay for the new stadium he is building in Orchard Park, and the Los Angeles Chargers owner Dean Spanos, who may sell part of the team to buy out his sister Dea Spanos Berberian.
The TikTok convention
When delays pushed President Biden’s speech this week at the Democratic National Convention outside prime time, some saw it as a slight. (Convention officials blamed too much “raucous applause.”)
The drama underscored the enduring value of the television audience, even as viewership shrinks and fragments.
But there were also plenty of signs that the Democrats remain focused on another type of viewer — those who scroll through videos in their social feeds.
Both parties have acknowledged the power of the viral video. As Kamala Harris memes ran wild across social media, and pro-Donald Trump posts flooded TikTok this summer, both candidates started their own accounts on the platform, where together they have more than 15 million followers. Harris’s running mate, Tim Walz, posted his first TikTok video, a dad joke, last Friday. Both party conventions credentialed social media content creators in addition to traditional journalists, and the Democratic convention for the first time streamed vertical video to YouTube, TikTok and Instagram.
Prime time is changing, too. About 20 million people watched the first night of the Democratic convention on television, according to Nielsen. That was on a par with the audience in 2020, when the convention was held virtually because of pandemic precautions, but down 22 percent from 2016. The Harris campaign has said it is vital to reach voters on their mobile phones, and it has earmarked $200 million out of a $370 million advertising budget for digital ads, which it believes to be the largest digital ad buy ever in American politics.
Democratic speechwriters seemed to keep the social phenomenon in mind. Former President Barack Obama made a joke with a collapsing hand gesture while describing Trump’s obsession with crowd size. Michelle Obama delivered a well-timed setup that ended in a punchline referring to Trump’s comment about “Black jobs.” Doug Emhoff shared in detail the story of meeting Harris and how his kids nicknamed her “Momala.”
The moments seemed ready-made for social media — and they probably were, said Eric Schnure, who was a speechwriter for former Vice President Al Gore. “I think it’s actually all very intentional,” he said.
“People consume content on their own time, not prime time,” he said. “So making sure things are snackable and shareable — I really think strategically people are thinking like that. It makes these speeches different, even if the devices aren’t necessarily new.”
The post Who Is Edgar Bronfman Jr., Paramount’s 11th-Hour Suitor? appeared first on New York Times.