Los Angeles, California – Sony and Apollo are considering a strategic move to acquire Paramount Global, aiming to maintain a consistent flow of theatrical releases from both studios while divesting certain assets like CBS, linear channels such as MTV, and Paramount Plus streaming service. This potential deal, reported by Deadline, has raised concerns and speculation within the entertainment industry.

According to reports from The New York Times, Sony and Apollo are contemplating reducing Paramount’s TV assets as part of their $26 billion bid for the entertainment company. However, Sony has not disclosed their plans to Paramount’s executives, who have been engaged in separate discussions with other potential partners, including David Ellison’s Skydance/Red Bird. Negotiations with Skydance have progressed, although no final decision has been made.

Industry experts have highlighted the regulatory hurdles that a Sony-Paramount merger could face, particularly regarding foreign ownership restrictions on U.S. broadcast stations. Additionally, stakeholders in Hollywood, especially exhibitors, are wary of the potential impact of a merger on the film industry, citing the aftermath of the Disney-Fox merger in 2019 and the subsequent decrease in film output.

With Sony and Paramount collectively producing 25 films this year, there are concerns about a potential reduction in film releases post-merger. However, sources suggest that the goal is to increase competition with streaming services by increasing the number of wide releases to around 20 per year, as opposed to scaling back production.

Formal agreements and financial evaluations are still pending, with Sony and Paramount yet to finalize nondisclosure agreements or conduct detailed financial assessments. If a merger does occur, it is anticipated that marketing and distribution operations will be consolidated, with Apollo potentially holding a stake in the combined entity.

While some speculate on the possibility of Paramount’s owner, Shari Redstone, opting to retain control without a deal, the ultimate decision remains uncertain. Sony’s reputation as a content provider, known for licensing deals with platforms like Netflix and Disney, may remain intact following a potential acquisition of Paramount.

Ultimately, any deal between Sony and Apollo for Paramount would require regulatory approval from entities like the Justice Department’s Antitrust division and the FCC. The current political climate, with a focus on preventing job losses from mergers, may influence the outcome of this proposed acquisition.