Paramount Turned Down $3 Billion-Plus Offer for Showtime From Former Executive
David Nevins was latest Showtime suitor to be rebuffed by Paramount over past few years
Former Paramount Global PARA -3.03% executive David Nevins offered to buy Showtime for more than $3 billion in recent weeks but was turned down by Paramount executives, according to people familiar with the situation.
Mr. Nevins’s approach, which was backed by private-equity firm General Atlantic, was the latest in a number of offers Paramount has received over the past few years for Showtime, people familiar with the matter said. Other suitors included Mark Greenberg, another former Showtime executive who most recently ran the premium network Epix, and Lions Gate Entertainment Corp. , some of the people said.
Paramount has decided to hold on to the premium channel and streaming service while it seeks cost savings and revenue from folding the Showtime streaming service into Paramount+ this year, as The Wall Street Journal first reported. As part of that change, Paramount Global—home to the Paramount movie studio, the Paramount+ streaming service and cable channels including Nickelodeon and Comedy Central—will increase the price of the ad-free premium tier of Paramount+, which will include the Showtime programming, to $11.99 from $9.99.
Paramount’s decision not to sell Showtime indicates the tough calls entertainment companies are making as they decide what scale and portfolio they need to compete in the quickly changing media landscape. Paramount is betting the plan will result in cost savings and revenue generation that exceed what the company could get by selling Showtime, whose shows include hits like “Billions” and “Yellowjackets.”
Paramount, like many of its peers, is struggling with declines in pay-television subscribers and a volatile advertising market. The company has said it would have negative cash flow this year as it hits peak spending, but will hit positive cash flow and earnings growth in 2024.
Mr. Nevins, a seasoned entertainment executive, offered to buy Showtime shortly after leaving Paramount Global, where he was chairman and chief executive of the Paramount Premium Group and chief creative officer of scripted content for Paramount+. He also oversaw Showtime, Paramount Television Studios and Black Entertainment Television.
Mr. Greenberg expressed interest in buying Showtime recently, but discussions didn’t advance, according to some of the people. It wasn’t the first time Mr. Greenberg had made an approach, the people said: Around two years ago, Mr. Greenberg offered about $6 billion for Showtime, in an offer backed by Blackstone Inc. Lions Gate Entertainment in recent years also has approached Paramount about merging Showtime with Starz, according to other people familiar with the situation.
Earlier this month on Paramount’s earnings call, executives were asked by an analyst why the company chose to fold Showtime into Paramount+ instead of selling it for cash, in light of “credible multibillion-dollar offers for Showtime.”
“We think there’s enormous value to unlock with the integration of Showtime and Paramount+,” Paramount CEO Bob Bakish said in response. The company reviewed the offers and concluded that its operating plan would create more value for shareholders, Mr. Bakish said.