Sony Apollo Paramount Merger Wouldn’t Reduce Theatrical Output, Though TV & Streaming Assets Would Be Shed

Should Sony and Apollo get their hooks into Paramount Global their strategy would be to keep theatrical release output steady between both studios –not reduced– while cutting the more burdensome parts of the conglom, read auctioning off CBS, the linear channels like MTV and Paramount Plus streaming service.

The news about theatrical output is per Deadline tonight, while the New York Times reported earlier that Sony and Apollo have plans to cut Paramount’s TV assets in their $26 billion bid for the entertainment company. Per the NYT, Sony hasn’t shared their plan with Paramount and its consiglieres who decided on May 4 to hold separate talks with Sony/Apollo and continued negotiations with David Ellison’s Skydance/Red Bird. Talks have eased between Paramount and Skydance, though the latter remains interested.

Many have pointed out that a Sony merger with Paramount would put the former under scrutiny with the FCC as foreign owned congloms aren’t allowed to own U.S. broadcast stations.

Per Deadline’s sources, those in Hollywood including exhibitors fear a Sony-Paramount merger, many having PTSD of the 2019 Disney-Fox merger and the reduced output of films which have resulted from that: Across 20th Century Studios, Searchlight and Disney, there’s only 12 titles for 2024. With wide releases (pics playing in north of 1,000 theaters) around 83 titles this year for the entire industry, exhibition can’t take another loss of a major studio. That would mean roughly another ten big titles gone from the marketplace. Circuits are already scrapping by post strikes and Covid.

Big Sony is putting out 15 movies this year and Paramount another ten. Sources tell Deadline that the plan wouldn’t be for a Sony-Paramount merger to scale back, rather up to compete with the streamers; that vision being around 20 wide releases a year. They wouldn’t follow in the footsteps of Disney-Fox’s practices; at least that’s the plan right now. It’s the main reason why Sony is going after Paramount to make a 1 + 1 studio equation = 4. Last year, Paramount and Sony respectively grossed $2 billion at the global box office. If combined, their output would equal $4 billion up there with Universal’s worldwide result ($4.9B) and Disney’s ($4.8B worldwide).

Meanwhile, per NYT, neither Sony or Paramount have inked formal nondisclosure agreements or begun any cracking of the books, a formality that could take weeks. A Sony Paramount combo would see the former Culver City lot operating the combined entity as a joint venture with Apollo taking a small stake which could be sold down the road to Sony or another buyer. Marketing and distribution ops would be merged.

Some close to the Paramount believe there’s a third option and that’s that Shari Redstone goes it alone, and doesn’t make a deal with Sony/Apollo or Skydance. How long that lasts remains the question.

Sony is known as an arms dealer of content, licensing movies and TV shows to Netflix and Disney. The studio has a rich pay one deal with Netflix. That strategy would remain unchanged with the addition of Paramount, the idea that the Melrose Ave lot’s OTT service would be unloaded to Comcast’s Peacock or Warner Bros Discovery’s Max.

The Sony Apollo deal would require the OK from the Justice Department’s Antitrust division, the FTC and FCC. The current President Biden administration is known to be anti-merger, particularly horizontal ones where jobs could be lost.

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