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FutureStarrParamount Explores Selling a Majority Stake in BET Media Group
Paramount Pictures is considering selling a majority stake in its BET Media Group, which includes BET cable network and studio, VH1 streaming service and more. Executives believe that selling to an alliance of Black investors or institutions could unlock value, according to sources.
Many media moguls have expressed an interest in buying the stake, including Tyler Perry. His producing deal with BET is about to expire and he provides much of the scripted content seen on both network and streaming service.
Paramount Global, parent of networks such as MTV, CMT and Comedy Central, is considering selling a majority stake in its BET Media Group business unit. This includes cablers VH1 and BET plus streaming service BET+. With additional capital invested into Paramount+' free ad-supported streaming service which recently merged with Showtime, Paramount would gain greater control over its future initiatives.
People familiar with the discussions indicate that these moves are part of a broader effort by the studio to generate cash as it continues its shift toward streaming. They have rejected a $3 billion offer for premium cable network Showtime and plan to merge their Paramount+ streaming service into it later this year.
BET is not only an influential brand within the Black community, but it also boasts strong commercial connections with major advertisers. Companies such as Coca-Cola and General Motors have pledged to significantly increase their advertising spend on minority-owned media companies.
Paramount's ownership of BET does not fit its strategy, but the asset could potentially be particularly appealing to a group of Black investors or institutions, the people said. This could unlock value in ways more difficult under traditional corporate ownership structures.
Unfortunately, a Paramount-owned BET would be unable to sustain its position as an influential brand among Black consumers. Furthermore, it's unique within the studio portfolio in that it has minority investors such as Perry and production companies like BET Studios.
That is an important consideration for the studio, which is in a transition period and uncertain how it will assemble its assets. To avoid selling off those properties haphazardly like its $2.2 billion deal to sell book publisher Simon & Shuster, it wants to ensure those assets are properly safeguarded.
One possible strategy is for Paramount to sell more of its stake in BET, a company with an established relationship with them. Doing so would enable Paramount to invest more funds in streaming services such as Paramount+ and Pluto TV.
Paramount Global has begun exploring the possibility of selling a majority stake in BET Media Group, which includes cable network and studio BET, VH1 and their streaming service BET+. According to sources, they believe that selling to an alliance of Black investors or institutions may unlock value that would otherwise remain hidden under current corporate ownership.
The company is also looking to boost its bottom line and revitalize the streaming business, which suffered a loss of $575 million last quarter. One strategy being pursued is refocusing advertising dollars on the BET brand, according to people familiar with the matter who asked not to be identified due to the sensitivity of the matter.
Established in 1988, BET television network is renowned for its ad-supported streaming services and original programming. Michael Turner - who took over as Chief Content Officer from veteran producer Oprah Winfrey in 2014 - is currently leading the network as Executive Chairman.
Although BET may not be as well-known to its subscribers as rivals MTV or HBO, it remains one of the largest entertainment properties on any platform. It's arguably the most popular branded network in America with a large and engaged fan base that regularly attends events and awards shows. But its most renowned asset is its BET Originals program - a slate of high-end television productions that compete with NBC and HBO for viewers' attention. These shows have won more Emmys than any other series on the network and estimates estimate that more than half a billion people have seen them either on television or streaming services.
Paramount Pictures may be looking to sell its majority stake in BET, which includes the network, VH1 and the streaming service BET+. According to The Hollywood Reporter, talks are underway with actor-media mogul Tyler Perry about possibly purchasing a portion of the company.
Paramount Global has been considering selling its direct-to-consumer business after reporting significant losses this year. CEO Bob Bakish previously told investors the business would reach peak losses in this segment by 2023, an important milestone on its path towards profitability.
With the company's portfolio of cable networks and ad-supported streaming services rapidly shifting, executives are looking to offload some assets. Recently, they attempted to sell publisher Simon & Schuster for around US$2.2 billion but the deal fell through due to regulatory concerns.
If Paramount opts to sell, it likely retains a minority stake and commercial agreements for content across its platforms. Furthermore, the studio has been investigating the possibility of selling off some portion of its book publishing arm which it has attempted in recent years.
BET, as a leading Black entertainment brand, draws significant interest from high net-worth individuals and minority-owned institutions. If BET were acquired, Paramount would gain additional capital that could be invested into expanding its ad-supported streaming service, Paramount+.
Additionally, a major stake in BET could give the company the chance to collaborate more closely with advertisers on their brand strategy within the Black community. Consequently, this would boost ad sales and extend viewers' time on-air.
Perry owns a minority stake in BET Media Group and produces much of their scripted content for cable and streaming services alike. Furthermore, Perry has an overall producing deal with the company as well as his own production studio.
Perry is not the first time that Paramount has reached out to him about an acquisition. The filmmaker has an ongoing deal to provide content for both companies, which was first launched with BET+ streaming service in 2019.
Perry's new platform would not only extend his cable reach, but it would also enable him to create and air original programming. It is an ideal opportunity to tap into the growing Black entertainment industry. Furthermore, they would gain access to Perry's extensive library of films and TV shows.
Paramount Pictures is exploring the sale of its majority stake in BET, which encompasses cable channels BET and VH1, as well as the BET+ streaming service. According to The Hollywood Reporter, discussions are in early stages and no agreement has yet been made.
BET (Black Entertainment Television) was established by Robert Johnson in 1980 as a television channel aimed at African American audiences. It broadcast original programming as well as acquired series and theatrical films. In 2001, it was sold to Viacom for $3 billion and merged with sister networks VH1, Comedy Central, and Nickelodeon.
Today, BET still caters to African American audiences through a wide variety of daily programming including news and current affairs, public affairs and entertainment. Its morning program BET Rejoice (formerly BET Inspiration until 2017) airs programs dedicated to religious teachings. Furthermore, the network has stopped airing infomercials in late night and replaced them with series.
According to a source close to the studio, Paramount executives believe that selling BET to an alliance of Black investors or institutions may unlock value. They anticipate interest from high net worth individuals or minority-owned institutions due to its iconic status within Black culture and among creative Black professionals.
Another potential suitor is Byron Allen, the founder and CEO of Allen Media Group which owns The Weather Channel, Local Now, as well as digital channels like HBCU GO and TheGrio. A representative for Allen stated that they are "interested" in purchasing BET.
Over the last three years, The Allen Media Group has invested more than $1 billion to acquire 27 affiliates from ABC, NBC, CBS and Fox from ABC to NBC and Fox. It is currently in the process of rebranding both its linear and streaming platforms. In 2022 it paid $11 million for Black News Channel and is actively investing in other local television stations as well as digital platforms.
Perry has had a longstanding partnership with BET, having joined their streaming service in 2019. Acquiring this network would allow Perry to expand his streaming portfolio.