Basketball star Shaquille O'Neal, rap artist 50 Cent and others are teaming up to make a bid for Paramount Global's Black entertainment division BET Media, according to a report published last week.
On Friday, the Wall Street Journal cited unnamed sources familiar with various matters for its report, in which it revealed the celebrity group had teamed up with CVC Capital, Group Black and Authentic Brand Groups to explore a bid for BET Media.
Their interest sets up a potential bidding war for the Paramount asset, which includes the BET and VH1 cable channels, as well as a majority stake in the direct-to-consumer streaming service BET+. Other moguls who have expressed a similar interest in acquiring some or all of BET Media include comedian Tyler Perry, who already has a minority stake in BET+; rapper Sean "Diddy" Combs, the owner of the Revolt television network; and comedian and local television station owner Byron Allen.
The battle for BET Media comes at a time when Paramount is looking to cut expenses and sell off what it considers to be non-core assets, or sectors of its business that aren't part of its broader plans for its broadcast stations, cable networks and direct-to-consumer streaming services.
Paramount mentioned BET+ just once in its first quarter financial earnings report filed with the U.S. Securities and Exchange commission last week, and didn't break out subscriber figures for the streamer in the earnings document or an associated press release. Instead, executives focused on growth at its flagship streaming service, Paramount+, which added 4.1 million subscribers during Q1 2023 to bring the total number of global customers served to over 60 million.
On a conference call with investors last Thursday, Paramount CEO Bob Bakish affirmed the company was looking to sell certain assets. But he declined to provide specifics, except to mention that Paramount had put its publishing division, Simon & Schuster, back on the market.
"I'm not going to comment on any other speculation," Bakish said in response to an investor's question on the call. "There's a bunch of speculation out there — transactions, what we might or might not do — other than to reinforce that we are always looking to maximize shareholder value."
Earlier in the day, Paramount revealed it took a $1.1 billion loss during the quarter, with $511 million attributed to its various streaming properties. Like other media companies, Paramount for years has spent heavily on producing new content for and marketing Paramount+ as well as its other subscription streaming service, Showtime (the two are set to combine later this year, and Paramount intends to raise subscription prices accordingly).
But Bakish reassured investors that the worst of its financial loss was nearly over, affirming that Paramount would reach "peak streaming investment" this year and "return...to earnings growth and free cash flow in 2024."
"We continue to hone our cost structure, align resources with growth areas, and divest non-core assets," Bakish said. "Because at the fundamental level, our strategy is working, and our momentum is strong. We are producing popular content, adding subscribers, increasing engagement, growing streaming revenue, and progressing towards key business objectives."
It isn't clear why the company views BET Media as a non-core assets, if reports of its potential divestiture are true. But much of the division includes media properties whose growth has chugged along slowly or stalled altogether, thanks in part to a combination of cord-cutting and a lack of compelling content.
BET, which stands for "Black Entertainment Television," started in the early 1980s by entrepreneur Robert L. Johnson with financial backing by then-TCI President and CEO John Malone. It offered a historically-underrepresented demographic a voice on the national television landscape, with music videos, news and theatrical programming that drew Black households toward cable.
Viacom acquired BET for $2.3 billion in 2000, and helped put the cable channel in front of more than 90 million households at its peak. Over time, the BET's influence began to wane, and Viacom eventually reconfigured the channel's schedule with sitcom reruns, reality shows and the occasional Tyler Perry-produced original series.
With its cable audience dwindling, Viacom and Perry launched BET+ in 2017, one of the company's first attempts at offering a direct-to-consumer streaming service independent of its cable networks. (The launch pre-dated Viacom's merger with CBS, which operated the predecessor to Paramount+, CBS All Access; Viacom and CBS merged in 2019.)
BET+ costs $10 a month or $100 a year, the same price as the commercial-free tier of Paramount+. While BET+ advertises itself as having over 1,000 hours of content, the ad-free tier of Paramount+ includes 30,000 hours of TV shows and movies, as well as live sports and access to a streamer's local CBS feed.
The lack of content options at BET+might account for its slow growth: In 2000, Paramount revealed the streaming service had reached the 1 million subscriber milestone. One year later, an executive told audiences at an event for Paramount Plus that BET Plus reached over 1.5 million subscribers. After that, the company stopped providing subscriber data for the service.