Paramount Gets Post-Super Bowl Bounce, But Future is Murky

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The Kansas City Chiefs may have won the Super Bowl on Sunday, but one of the big winners off the field was Paramount Global (NASDAQ:PARA).

The company owns CBS, the network that broadcast the Super Bowl, and it brought in more than $600 million in ad revenue from the big game, reportedly topping the Fox network’s haul last year. It also got a ton of exposure for its shows across its networks and on its Paramount+ streaming platform.

Paramount Global’s stock price jumped on the day after the Super Bowl, rising about 4% on Monday to trade at around $13.41 per share. However, it is still down roughly 10% year to date, and where it goes from here is uncertain, as lots of news and rumors around the company are circulating.

Talk of mergers and acquisitions are swirling

Paramount Global has struggled over the past few years, with its stock down 41% in 2022, 10% last year, and another 10% so far this year. In recent months, the company has been the subject of rumors and speculation about its future. In December, it was widely reported that Paramount Global was in talks with Warner Bros. Discovery (NASDAQ:WBD) about a potential merger.

In January, there were reports on CNBC and elsewhere that the film and television studio company Skydance Media was interested in buying National Amusements, the holding company that owns a majority stake in Paramount Global. According to those reports, the idea would be to merge Paramount with Skydance, taking it private in the process. Skydance has worked with Paramount in recent years to co-produce and distribute several films, including blockbusters like Top Gun: Maverick and Mission: Impossible — Dead Reckoning Part One.

More recently, media mogul Byron Allen made a bid to acquire Paramount Global in late January through his Allen Media Group, which owns The Weather Channel and more than two dozen TV stations.

“Mr. Byron Allen did submit a bid on behalf of Allen Media Group and its strategic partners to purchase all of Paramount Global’s outstanding shares,” Allen Media management said in a statement confirming their interest. “We believe this $30 billion offer, which includes debt and equity, is the best solution for all of the Paramount Global shareholders, and the bid should be taken seriously and pursued.”

On Feb. 1, Reuters reported that Allen was interested in Paramount’s TV stations and networks and would sell off the film division, although that has not been confirmed.

Thus, while there is a lot of smoke, that doesn’t necessarily mean that something is going to happen on the M&A front, although it is certainly worth watching.

What’s next?

Last week while at the Super Bowl in Las Vegas, Paramount Global CEO Bob Bakish told Yahoo Finance that the focus is on creating shareholder value.

“The most predictable route to doing that is through execution, and that’s why we are laser-focused on execution, including, by the way, maximizing the value of this weekend here in Las Vegas at the Super Bowl for Paramount Global,” he told Yahoo Finance.

However, the Paramount CEO did acknowledge that the company is also looking at other ways to create shareholder value, “including potentially through transactions. We will have to see if anything happens in that regard.”

Paramount isn’t due to report its fourth-quarter earnings until Feb. 28, so investors may learn more about its direction then. However, until there is more visibility around Paramount’s future, investors should be extremely cautious — even though it was a big winner on Monday.