So Much for Selling BET
Paramount has scrapped its plan to sell BET Media Group, a person with knowledge of the plans confirmed to IndieWire. The company informed bidders of its decision on Wednesday night.
Basically, Paramount Global concluded that BET Media Group, which includes BET, BET Studios, BET+, and VH1, has more strategic value as a piece of Paramount than actual monetary value it could have brought to Paramount via a sale. For starters, there are what our source described as “significant” synergies between BET Media Group and Paramount’s overall affiliate distribution, advertising, and streaming businesses.
More directly, a sale of the majority stake of BET Media Group would not have brought in enough cash to pay down enough company debt, known as deleveraging.
A Paramount Global spokesperson declined comment on this story. As far as we know, Paramount’s preschool brand Noggin is still up for sale; we didn’t immediately get an answer on that specific question.
The Wall Street Journal first reported the news of the canceled auction.
Bidders for BET included groups led by Tyler Perry, Sean “Diddy” Combs, 50 Cent, Kenya Barris, and Shaquille O’Neal. The company was seeking bids in the $3 billion range, a person with knowledge of the negotiations told IndieWire in June. They got a few of those, our source said at the time, though today it sounds like most of the incoming bids had a “2” in front.
One equity analyst we spoke with in June said $3 billion for the BET collective “sounds really high.” To us too.
The BET auction was previously described to IndieWire as an organized multi-round process. Participants signed NDAs to get access to each of the BET Media Group brands’ otherwise undisclosed revenue and earnings. They then could apply their own multipliers, arrive at an independent valuation, and submit a bid.
The inside thinking behind the pie-in-the-sky-sounding valuation was that BET could unlock hidden value under new ownership — especially ownership from the Black community. It makes sense for a media group targeting Black audiences to have a Black owner; cultural advantages aside, there could have been additional revenue opportunities with companies looking to advertise with Black-owned businesses.
We do not know how many streaming subscribers BET+ has; Paramount Global does not report those. Suffice it to say, it’s not a ton. At the end of June, Paramount+ had about 61 million subscribers. We also do not get numbers for Noggin or the disappearing Showtime OTT app; Paramount doesn’t even report FAST service Pluto TV‘s monthly active users anymore.
We do know that cord-cutting is crippling cable television, where BET Media Group mostly plays. In July, linear television (broadcast networks and cable channels) accounted for the minority of all TV viewing — the first time that’s ever been the case.
As least Paramount’s been able to sell something recently. Paramount Global recently announced a $1.62 billion sale of publishing arm Simon & Schuster to private-equity firm KKR. We’ll see if this one passes regulatory — a previous merger with Penguin Random House was stopped in its tracks due to antitrust concerns. That deal was valued at $2.2 billion.
