Did Paramount CEO Bob Bakish Just Hint That Paramount Might Be Up For Sale?

Another giant in the media industry may well be putting a for sale sign on the front lawn, if not now then perhaps in the very near future. It appears that Paramount, as has been speculated in the business for some time, could be the next major media merger target. CEO Bob Bakish all but confirmed that to be the case recently, or, at the very least, he strongly hinted that a lot of the company's current strategy — such as dropping the ViacomCBS name at the top level for branding's sake — is all about making itself attractive to potential suitors.

Bakish recently spoke at the Morgan Stanley Technology, Media & Telecom Conference and made some interesting, eyebrow-raising comments. As reported by IndieWire, Bakish said that the moves the company has been making are positioning Paramount as a company that he personally would view as an attractive acquisition target.

"When I look at a company to buy – we've done a bunch of smaller deals particularly in Latin America and you can rest assured we look at all the deals – the single most important thing is, 'If you buy the company, can you use the content?' The answer typically is no, not for a while. Our investment strategy is increasing optionality because we're gaining more and more control over high-quality content."

Some of these moves that Bakish is referring to include having every single one of Paramount's movies streaming on Paramount+ by 2024, as well as regaining the rights to "South Park" by 2025, as the show currently resides exclusively on HBO Max. Paramount also acquired a majority stake in Fox TeleColombia & Estudios TeleMexico from Disney, making for an attractive international play.

The endgame comes into focus

This is all beginning to make sense. The media game has become about getting bigger and better so to compete with the giants, such as Disney and Netflix. Paramount is a big company with a $22 billion market cap, but that is but a drop in the bucket compared to Apple, for example, which has a cap of $2.6 trillion. This is why it wasn't a gigantic deal for a $1.4 trillion company like Amazon to acquire MGM for $8.45 billion, which was shocking to the industry at large, but a relative drop in the bucket for a gigantic tech company looking to get into the streaming game in a meaningful way.

Comcast is another big telecom that could be in the mix to make a splashy acquisition, and it's all about long-term viability in the evolving media landscape. To that end, Paramount would bring with it a growing library of attractive content, as well as 56 million subscribers between Paramount+ and Showtime, a figure that is expected to grow to 100 million by the end of 2024. It's easier to understand why Paramount said it's scaling back on blockbusters to focus on streaming. What might all of that be worth for a huge company like Apple, that could grow Apple TV+ by leaps and bounds overnight simply by writing a giant ass check? What are the "Scream," "Transformers," "Jackass," "Mission: Impossible," "Shrek," and "Kung Fu Panda" franchises worth?

Again, for the time being, Paramount has not clarified these comments and Bakish didn't outright say the company is for sale. But can Paramount+ actually compete with the giants in the streaming world long term when it might require spending $5 billion or more per year on content, almost a quarter of the company's overall market cap? Can that be profitable? It seems increasingly clear that Paramount knows the biggest value it has to the industry is as a pool of content that, when combined with a bigger company, will help make them a media titan.