CBS and other well-known properties would be sold if Sony and Apollo were able to buy Paramount. But the new owners would keep the movie studio.
Shari Redstone helped build Paramount Global into a media empire, but if Sony Pictures Entertainment and the private-equity giant Apollo Global Management succeed in acquiring it, they plan to break it all up, according to three people familiar with the matter.
The plan would include auctioning off CBS, cable channels like MTV and the Paramount Plus streaming service, said the people, who asked not to be identified sharing private details. Paramount Pictures — home to blockbusters like “The Godfather,” “Top Gun” and the “Mission: Impossible” franchise — would be combined with Sony’s business.
Sony and Apollo, which made a nonbinding expression of interest in acquiring Paramount for $26 billion last week, are also likely to keep Paramount’s library of films and TV shows and the rights to well-known characters, including the Teenage Mutant Ninja Turtles and SpongeBob SquarePants. They have not yet outlined this plan to Paramount or its advisers.
A breakup of Paramount would represent a major changing of the guard in the entertainment industry. CBS and Paramount have been controlled by the Redstone family for decades, since the media mogul Sumner Redstone assembled the conglomerate in a series of audacious deals. His daughter, Ms. Redstone, championed a 2019 deal to reunite it, and she remains Paramount’s controlling shareholder.
Sony and Apollo are now engaging with Paramount’s financial advisers on next steps in their proposal, the people said. The two companies have not yet signed formal nondisclosure agreements or begun due diligence reviews, a process that could take weeks.
Though it’s still early, the two bidders have already begun to envision how a deal for Paramount could unfold. The two would likely operate the company as a joint venture controlled by Sony, with a minority stake owned by Apollo, the people said. Sony would look to combine the marketing and distribution functions of the Paramount movie studio with its own operations, and divest the rest of the properties.
