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Paramount heiress prepares to bow out as Hollywood streaming wars turn ugly


James Warrington
22 December 2023·

Shari Redstone faced considerable opposition when she took control of Paramount Global - Tasos Katopodis/Getty Images North America

When Shari Redstone, the billionaire tycoon behind Paramount Global, seized control of her father’s media empire, she was forced to put up a fight.

The 69-year-old faced opposition from Les Moonves, the now-disgraced former boss of CBS. She was also sued by two former executives who accused her of manipulating Sumner, her philandering and increasingly infirm father.

Shari’s ultimate ascension was just one chapter in a remarkable family saga that proved a major source of inspiration for the hit TV show Succession. Yet after years spent battling to gain control, Shari may now be calling time on her stint at the helm.


Reports earlier this month suggest Shari is exploring selling her 77pc stake of controlling shares in Paramount.

Now, it has emerged that executives at the media giant have held initial discussions with Warner Bros Discovery over a merger that would combine two of Hollywood’s most prestigious media companies.

The moves mark the end of an era for the doyenne of one of America’s most well-known media dynasties.

More broadly, though, the machinations highlight how the rise of Netflix and the dawn of the streaming era have not only shaken up Hollywood but threaten to reshape it altogether.

Paramount, formerly known as ViacomCBS, is the cornerstone of the Redstone family’s National Amusements empire.

The late Sumner Redstone (C) pictured with his daughter Shari (R) and his grandaughter Kim (L) in 2003 - Kevin Winter/Getty Images North America

The media giant is best known for its film and TV studios, which have produced Hollywood blockbusters including Top Gun: Maverick, Titanic, Transformers and Forrest Gump.

It also holds a collection of traditional TV channels, including MTV, Nickelodeon, Comedy Central and Channel 5 in the UK.

For decades, Paramount was a classic tale of growth through acquisition. But now, under the stewardship of Shari, the family jewels are up for sale.

The group has begun selling off assets including the publisher Simon & Schuster, which was offloaded to private equity firm KKR for $1.6bn in October. It is also in talks to sell its Black Entertainment Television (BET) network to an investment group led by members of senior management.

Talks with Warner Bros Discovery, the US media conglomerate behind HBO TV hits and blockbusters including the Harry Potter franchise, are on a different scale altogether. A combination would create the biggest film distributor in the US and shrink Hollywood’s ruling studio elite from five to four.

Talks are also ongoing with Skydance, the production company behind Top Gun: Maverick. Sykdance is led by US billionaire Larry Ellison’s son David and backed by Redbird Capital Partners, the private equity fund involved in a UAE-backed takeover bid for the Telegraph.

Paramount is best known for its film and TV studios, which have produced Hollywood blockbusters including Top Gun: Maverick - Paramount Pictures

For Redstone, all the talks suggest a tycoon calling time on her empire. The billionaire reportedly wants to spend more time at the new mansion she has built in the Caribbean.

Redstone, whose family changed their name from Rothstein and who is herself a practising Jew, has also stepped up her campaign against anti-Semitism in the wake of Hamas’s attack on Israel.

More fundamentally, though, her potential exit reflects how the shifting sands of streaming have forced traditional Hollywood players to rethink their future.

Paramount is now valued at around $10bn, just a third of what it was worth following its re-merger with CBS in 2019.

The company’s Paramount+ streaming service lost $238m in the third quarter and the group is struggling under the weight of around $14bn in debt, giving it the worst debt-to-equity ratio of any player in the sector. Analysts have raised concerns over Paramount’s financial constraints as a result.

Meanwhile, the group’s traditional – or linear – TV channels are in decline as viewers increasingly shift to streaming. Channels are also heavily exposed to the downturn in the advertising market.

Warner Bros Discovery is grappling with similar difficulties.

It has a huge debt pile of almost $45bn. Its linear assets, which include CNN and Eurosport, are also in decline. The company, led by serial dealmaker David Zaslav, has put All3Media, the British production giant behind Gogglebox and The Traitors, up for sale in an effort to raise cash.

Sumner Redstone died in 2020, aged 97 - Hollywood To You/Star Max

A tie-up would enable the companies to bring together their Max and Paramount+ streaming platforms, providing scale to compete with larger rivals such as Netflix and Disney.

They would also be able to streamline their production and distribution businesses. More radical options could include merging centrist news channels CBS and CNN.

Alice Enders at Enders Analysis says a deal would make “perfect sense from every perspective”. She adds: “I think the real purpose is the case for efficiencies.”

Talks are at an early stage and the plans are not without their challenges. The hefty debt piles of both companies raise questions over whether a deal would come in the form of an amicable merger, or if one side would buy out the other.

Industry observers highlight the timing of these revelations just before Christmas, suggesting discussions are not yet at a serious stage and both Warner Bros and Paramount merely want to sound out shareholders.

But analysts have also questioned whether the pursuit of scale is in itself a sensible strategy amid shifting viewer habits.

“Layering on even more linear TV assets to any of these legacy media companies feels like a financial death sentence,” says Rich Greenfield, an analyst at LightShed Partners.

Any deal between Warner Bros Discovery and Paramount could fire the starting pistol on a long-awaited wave of consolidation in the streaming market.

Many analysts believe the streaming market will eventually ultimately contain just two or three competitors.

As competition heats up and rising interest rates drive up the cost of debt, the likes of Netflix and Disney have hiked prices, launched ad-funded tiers and pulled back content spend in an effort to rekindle growth.

But for smaller players, the options are more limited. “Small isn’t great in a scale business,” says Enders.

Warner Bros’s streaming platform Max is itself the outcome of a tie-up between HBO and Discovery+. Paramount has already merged with Showtime, while Disney recently bought out the remaining stake in Hulu.

Peacock, the US streaming service owned by NBCUniversal, has also been earmarked as a potential takeover target.

Speaking to investors last month, John Malone, the “cable cowboy” behind Liberty Global and an investor in Warner Bros, warned that the industry was headed for a “period of distress”.

“There will be opportunities presented by distress, and companies that have got dry powder or some kind of currency will find synergistic consolidation opportunities in that distress,” he added.

A merger between Warner Bros Discovery and Paramount would arguably mark the biggest shake-up of traditional Hollywood to date.

Regardless of how things play out, Redstone appears to be preparing to bow out.

Sumner, her father, was 92 when he finally relinquished control of his empire. He died in 2020 aged 97. It seems Shari, who battled so hard to gain control, has lost her appetite for the fight.

Enders says: “It’s a ruthless, brutal business.”