🤑 Paramount finally found a buyer (maybe)

PLUS: Google's biggest acquisition ever, Formula 1 is now a cash cow.

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This week’s market performance 🏆️ 

S&P 500: -1.02% 📉 
Nasdaq: -1.31% 📉 
Dow 30: -2.94% 📉 
Russell 2000: -2.27% 📉  

TOP STORY
🤝 Paramount may have finally found its buyer… Skydance

📸 Getty Images

Over the past few years, the streaming industry has experienced a significant downsizing, for lack of a better word. 

Mergers, acquisitions, and the arrival of big-tech companies with their gigantic checkbooks have turned the media landscape into the survival of the fittest.

While many companies in the industry have opted for mergers, Paramount has chosen a different path, which includes potentially selling off non-core assets such as its $11B studio and laying off employees in order to stay afloat.

1️⃣ In February 2024, Paramount Global ($PARA) laid off ~800 employees (rougly 3% of its workforce) a day after announcing record Super Bowl ratings.

2️⃣ Paramount Global ($PARA) is down -46.32% in the past year.

But despite the moves, Paramount simply cannot survive on its own.

So, what’s stopped Paramount from sealing any deals thus far? Shari Redstone.

As president of National Amusements, Shari Redstone oversees Paramount Pictures within the ViacomCBS umbrella. She plays a pivotal role in guiding Paramount's strategic direction and major decisions, such as a potential acquisition.

Shari Redstone (📸 Bloomberg News)

Over the past year or so, very high-profile institutions and people, from Apollo Global Management to media mogul Byron Allen, have been courting Redstone in hopes of sealing a deal.

3️⃣ In April 2024, private-equity giant, Apollo Global Management, made a $27 billion offer to acquire Paramount Global. The offer was declined.

4️⃣ In January 2024, media mogul Byron Allen made a $14.3 billion offer to acquire Paramount Global. The offer was declined.

While it’s taken a while, it seems Redstone may have finally found a worthy suitor: Skydance.

Earlier this week, Paramount said it had paused talks with all suitors for 30 days to focus on negotiations with Skydance, including ignoring Apollo Global Management's $27 billion all-cash bid.

Why Skydance? There are a couple of reasons:

  • Skydance enhances Paramount's portfolio with valuable assets, including existing stakes in blockbuster franchises like "Mission: Impossible" and "Top Gun."

  • The structure and certainty of the Skydance deal may be more attractive than Apollo's bid, which was not fully financed and would have required more due diligence from Skydance.

Ultimately, Shari Redstone and National Amusements appear to trust Skydance CEO and media savant David Ellison.

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MARKETING
💰️ Google is interested in buying HubSpot, a $33B marketing software company

📸 Getty Images

This week, it was reported that Google’s ($GOOG) parent company, Alphabet, was considering the possibility of acquiring CRM giant Hubspot ($HUBS).

If the deal is completed, it would be Google’s largest acquisition ever, as Hubspot currently boasts a $33B market cap. The largest deal Alphabet has ever done was its $12.5B acquisition of Motorola Mobility in 2011.

The tech giant would finally find some use for its $110B cash reserves. 🤣

1️⃣ CRM = Customer Relationship Management

So, what’s HubSpot? HubSpot is a CRM company that helps businesses manage customer interactions, simplify operations, and ultimately increase profits.

CRMs are the middleman between companies and their thousands to millions of customers. They track customer behaviors and relay that information back to every department, from sales to marketing.

Despite increased regulatory scrutiny of big tech, Google still views this as an opportune time to make a major acquisition.

Google ain’t afraid of antitrust bullsh*t.

2️⃣ Hubspot ($HUBS) is up 303.61% in the past 5 years while Google ($GOOG) is up 152.82%.

This week’s sector performance 🏆️

Semiconductors ($SOXX): -1.96% 📉
Bonds ($TLT): -2.04% 📉
Technology ($QQQ): -1.00% 📉
Dividends ($SCHD): -2.13% 📉 
Emerging Markets ($EEM): -0.02% 📉 
Energy ($XLE): +3.61% 📈 
Financials ($XLF): -1.31% 📉
Gold ($GLD): +3.10% 📈 
Industrials ($VPU): -0.71% 📉
Cybersecurity ($CIBR): -1.33% 📉 

SPORTS
🏎️ Liberty Media has turned Formula 1 into a cash cow

📸 Getty Images

Today, the Formula 1 industry is valued at over $17 billion.

How’d they get here? Two words: Liberty Media.

In 2017, Liberty Media acquired Formula One Group, the parent company of Formula One (F1), for $4.6 billion. The acquisition made Liberty Media the new owner of Formula One, the premier international auto racing series.

1️⃣ Liberty Media Corp/Formula One Group ($FWONA) is up 6.42% this year.

Formula 1 Annual Revenue:

  • 2017: $1.8 billion

  • 2023: $3.2 billion (+78%)

Formula 1 Enterprise Value

  • 2017: $8 billion

  • 2023: $16 billion (+100%)

Average F1 U.S. Per-Race Viewership

  • 2017: 538 thousand

  • 2023: 1.11 million (+106%)

In Las Vegas last year…

  • The Formula 1 race brought $1.5B to Vegas, with visitors contributing $884M.

  • The event generated a record-breaking $77M tax revenue for Las Vegas.

  • F1 invested $88M in public infrastructure improvements, excluding land acquisition costs.

  • The race created 7,300 jobs, making local workers earn $52M in wages.

2️⃣ Last week, Liberty Media acquired the world's top motorcycling racing series, MotoGP, for $4.5 billion, looking to replicate this success.

Here’s what else you might’ve missed…

Mark Zuckerberg ($META) passed Elon Musk on Friday to become the 3rd richest person in the world.

Disney+ ($DIS) password-sharing crackdown starts in June.

Tesla ($TSLA) will unveil a “robotaxi” on August 8th.

McKinsey is offering employees 9 months' pay to leave and find new jobs.

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