Roronoa Zoro
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Mean birthers
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Rumour: Sony in talks to acquire Paramount
- Thread starter Pelta88
- Start date
Unknown Soldier
Member
$300 million AAA budget games probably have something to do with that
The Pleasure
Member
yurinka
Member
No.
Paramount has been making $30B/yeaar in revenue during 7 years:
And a consistent $10B gross profit for like 25 years:
But since 2019 (when Viacom and CBS were merged into what was going to be Paramount Global) they had some operational cost that is eating that $10B/year of gross profit resulting in this operating profit/loss:
Which is pretty much their net profit/loss:
So if acquired, Sony should adress these operational costs. Pretty likely moving most of the Paramount Global stuff under Sony Pictures and Sony Music as restructured subsidiaries where Sony would cut all the things Sony already does for them so it would be redundant to also have it in Paramount redundantly.
Regarding the many services Paramount Global has, I'd address as explained below:
I posted their revenue and profit above for many years, which are more representative than a single quarter and include everything, not only a few things.
Regarding the many movies, tv series, animation/anime, tv channels paid/cable tv, music content and services that Paramount has, I'd merge them all, plus the ones that Sony has, into a single global and fully multiplatform service where you'd be able to buy, rent individually or get under a subscription (which would have different tiers, like one to get all movies, oher to get all music, other for the tv series, other for the tv, etc). Keeping some small part open for free -like free tv channels, the first few chapters of tv series, some old movies or music albums. And a bigger selection that would be included in PS Plus.
I'd migrate all the users they have in all their current Sony and Paramount services there, exchanging their remaining months/years of subscription or bought movies/etc. for the equivalent there in terms of catalog and money in terms of monhs/years of subscription.
Regarding to the licensing Paramount stuff to 3rd party streaming platforms, cinemas, tvs, radios, etc. I'd keep the existing ones deals, and would expand them to the extra channels and contacts Sony has.
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ResilientBanana
Member
I would be pleased if they not only did this, but erased the series from history. Its fucking awful.
Fabieter
Member
That's the bungie payment. It's gonna be back to normal next FY.
AngelMuffin
Member
Hardly. Hasbro owns the Transformers IP and last licensed it to Activision.
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StreetsofBeige
Gold Member
Probably some part, but for margins to be cut in half from 13% to 6% at division sales of about $30 billion. A 7% gap is about $2B of mystery costs they did.
I think the divisions profits are still around $2B. If they maintained 13%, it should be about $4B.
James Sawyer Ford
Member
It’s Bungie costs
schaft0620
Member
If Sony bought them tomorrow, it would take 10 years for this to have any impact on games. To me, I read this and go, "oh boy CBS is going to lose the NFL with the next TV deal." If that IS the case, Paramount will never have more value than it has today and its value will only go down.
Oddvintagechap
Member
Apollo would probably get CBS. Or Sony would sell it to a different streamer. Like Amazon. Since foreign companies can’t own a broadcaster.
yurinka
Member
We saw in the Sony leaks that Sony AAA games now will have $300-$400M budgets. We know they are working in around 30 first party titles. If all would be of these size, let's say $350, having 30 titles would be $10.5B. Considering nowadays AAA take 5-9 years to be made, let's assume an average of 7 years. That would be an average of around $1.5B/year. Add there mobile games + PC ports + 3rd party deals + PS Plus deals. They may be spending up to $2-3B in getting games, maybe around a 10% of their yearly revenue, not much.
In any case, SIE's profit has been increasing over years during the Jimbo era, until the post covid days. According to Totoki the main reasons of the profitability decrease was that they were still paying cost related to the (many) acquisitions they did in recent years, something that will ease out in the fiscal year that just started, and that unlike in previous generations the costs related to produce PS5 hardware increased over time instead of decreasing (due to big inflation+covid+rise of the AI and electric car markets).
He mentioned they'll aggresively tackle the profitability (as we saw firing around 1K people, shutting down Pixel Opus, London Studios and some games under development) also with doubling down on PC because it has a great ROI for them (we knew they'll continue porting old games and that had several GaaS titles announced to be released day one on PC).
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schaft0620
Member
I work in broadcasting and I have never heard of that, if its true they would just do it out of Sony pictures which is an American company.
You may be right I have no idea (I just never heard of that). I don't understand what would stop them from doing the same thing they do with SIE, which is an American company.
Rupert Murdoch has to give up his Australian citizenship in order to own TV stations.
FOX is both national and local broadcasting and a lot of those stations are owned by Fox Television Stations under FOX Corp, which is international but based in the US. I think that FCC relaxed the rules but this could be an issue with the current US administration. Sony TV is very much a US run operation and I don't see how this merger wouldn't change that.
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Neff
Member
The only one of those owned by Paramount is Star Trek.
Game and ET&S are Sony Group's smallest segments by assets, and yet, G&NS accounts for 70% of Sony Group's free cash flow (FY22 reflects a temporary increase in working capital to ramp up PS5 production + acquisition of Bungie)
Yoshida and Totoki have created an internal capital market that punishes success (G&NS), rewards failure (weaker segments get subsidized by stronger ones), financial engineering, and diverts ever-increasing amounts of cash from productive investments which ultimately impairs Sony Group's ability to generate free cash flow.
FY20 ¥608.1 bn
FY21 ¥102.1 bn
FY22 -¥616.6 bn
Yoshida and Totoki are taking on debt (¥375 bn) to finance buybacks (¥199 bn) and dividends (¥98 bn).
Sony's stock lost ¥2 trillion in value after Totoki tried to avoid accountability by throwing SIE under the bus.
Totoki needs G&NS's free cash flows to save his own ass. Fortunately for him, Jim Ryan knew how to run G&NS.
Better find a new narrative.
Q4 Operating Income Forecast (before Helldivers II success)
G&NS ¥86 bn
Nintendo ¥46 bn
G&NS has low profit margins and high capital turnover because that is the fundamental essence of its long-term competitive advantage.
There is no mystery.
FY22
19.1m PS5s sold at a loss
R&D ¥271 bn
D&A ¥87 bn
Retention incentives (Bungie) ¥54 bn
FY21
11.5m PS5 sold at a loss
R&D ¥175 bn
D&A ¥61 bn
SIE completed its purchase of Bungie for ¥347 bn in FY22.
Bungie didn't affect Sony's income statement, only its balance sheet and cash flow statement.
However, Sony allocated ¥162 bn to deferred payments to employee shareholders that are conditional upon their continuos employment. The deferred payments and other retention incentives (¥162 bn) will be expensed in FY22, FY23, FY24 ...
Topher
Gold Member
"What’s unclear is what would happen to the 28 local TV stations CBS owns; FCC rules bar foreign entities (i.e. Tokyo-based Sony) from having majority ownership control of broadcast TV stations, so Sony would need to carve out a separate U.S. ownership structure for the station group."
Sony Pictures, Apollo Offer to Buy Paramount Global for $26 Billion in Cash
Sony and Apollo announced a bid to take Paramount Global private with an all-cash buyout offer of $26 billion.
variety.com
DrFigs
Member
surely this won't be an issue in the current year."What’s unclear is what would happen to the 28 local TV stations CBS owns; FCC rules bar foreign entities (i.e. Tokyo-based Sony) from having majority ownership control of broadcast TV stations, so Sony would need to carve out a separate U.S. ownership structure for the station group."
Sony Pictures, Apollo Offer to Buy Paramount Global for $26 Billion in Cash
Sony and Apollo announced a bid to take Paramount Global private with an all-cash buyout offer of $26 billion.
Fabieter
Member
Topher
Gold Member
I'm just laughing at the "carve out" method journalists keep coming up with to solve merger and acquisition roadblocks. "Carving out" the UK was all the rage during the ABK acquisition.
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DrFigs
Member
What happens to paramount plus if sony buys them. i think sony has a (very good) strategy of not having having their own subscription service, aside from crunchyroll. they make a good amount of money by lisensing their shows out to everyone else. do they keep it or leave it? 
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skit_data
Member
They have one, Sony Pictures CoreWhat happens to paramount plus if sony buys them. i think sony has a (very good) strategy of not having having their own subscription service, aside from crunchyroll. they make a good amount of money by lisensing their shows out to everyone else. do they keep it or leave it?
Edit: Well, it's actually more of a video on demand service so I guess you're right
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VolticArchangel
Member
Is it to late to go after some paramount stocks.
Bruh, I'm in the same boat. Lmao
Someone into the market, please answer this lol
StreetsofBeige
Gold Member
$26B is crazy! Although unknown how much is Sony and how much is Apollo.
The market cap of the stock is only about $9 billion. But as per articles, the $26B includes needing to pay for debt obligations.
For all you gaffers who claimed Sony is broke and cant do this and that, of course that was BS. They got money. At this time assuming it's a 50/50 split, that's $13B cash Sony is contributing.
The market cap of the stock is only about $9 billion. But as per articles, the $26B includes needing to pay for debt obligations.
For all you gaffers who claimed Sony is broke and cant do this and that, of course that was BS. They got money. At this time assuming it's a 50/50 split, that's $13B cash Sony is contributing.
Fabieter
Member
Its like 2 to 3 times their current value.
DrFigs
Member
I think what bothered me about this is how confident people were. it's all so tiring.
StreetsofBeige
Gold Member
I'm too lazy to dig into it, but when it comes to a buyout for $xxxx value, it does not always convert linearly to market cap/stock price. Debt obligations may sink the stock buy out price pending if the buyout value includes or excludes value of debt.
The stock is around $11 start of today at $9B market cap. A $26B buyout sounds like it should triple the stock price to around $33. Not always true.
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Ronin_7
Member
Sony has tons of money, not sure who said otherwise.
thicc_girls_are_teh_best
Member
Hiroki Totoki to SIE (most successful Sony division): "You're losing us money...somehow! Cancel those games! Fire those devs! Raise those prices! Check the couch for pennies if you need them!!"
Also Hiroki Totoki, to Sony Pictures (much less successful than SIE): "Here's $26 billion. Buy buy buy!!!"
Also Hiroki Totoki, to Sony Pictures (much less successful than SIE): "Here's $26 billion. Buy buy buy!!!"
thicc_girls_are_teh_best
Member
Oh I can think of a few folks....
...or like 90% of the people in the ResetERA ABK cheerleading thread from last year.
Mibu no ookami
Member
Movie/TV industry is much larger than CONSOLE gaming and doesn't take nearly as long to get returns.
A game can take 5+ years to make. A movie? From concept to box office probably 12-18 months. TV shows 18-24 months.
Buying Paramount puts Sony in a position to offer a Sony+ service that has Paramount+, Crunchyroll, and PlayStation+ which will put it in a long term position to leverage the console business to make gains in PC and Handheld market share.
It's a great purchase and will have downstream effects across Sony.
StreetsofBeige
Gold Member
$26B for a company with a market cap of $9B and also losing money (negative EPS).
bitbydeath
Member
Sony put a similar figure up for Fox before it went to Disney and had a lot less money back then.
Mibu no ookami
Member
The total amount is equity + debt + premium.
Sony could quickly make Paramount profitable by streamlining its operations into Sony Pictures.
Varteras
Gold Member
I've had the impression for awhile now that Sony's intent is to be the biggest entertainment company. Talking about selling their banking division and using that to fuel investments in entertainment. I mean, you look at all of their acquisitions, both completed and attempted, and it paints a pretty clear picture to me. They're not just throwing all their eggs into the game development basket and they don't see much opportunity in their other ventures outside of entertainment by comparison. I could be wrong, but it just feels like Sony has an eye in topping the likes of Disney and Comcast.
Mibu no ookami
Member
Sony saw Netflix surpass them in market cap EASILY. Sony probably sees tremendous potential in bundling Paramount with its own services. I would say they are targeting Netflix and Disney more so than Comcast.
And this is a major first step. The amount of things Sony can do with Paramount are endless.
You cast Tom Holland as a young Ethan Hunt and you reboot Mission Impossible. You now have one of the biggest movie franchises for the next 20 years on top of the contracts you already have with him with Spider-Man and Uncharted. Holland becomes perhaps the first Hollywood star with 3 active/massive franchises.
You see if you can do Top Gun with Miles Teller and some other star power to replace Tom Cruise.
You reinvest money into TMNT to make it a major property again.You have TMNT and Spider-Verse movies for animated, but continue both of them in live action movies and TV.
They could put SERIOUS money into Avatar (ATLA).
You put out another Spongebob movie and make them a continuing thing again with more backing than Paramount previously gave it.
You put serious monies into Star Trek as well.
This is on top of bringing back Tobey Maguire, Andrew Garfield, and Emma Stone to do Spider-Man 4, Amazing Spider-Man 3, and Spider-Gwen. You introduce Miles Morales in live action and allow Tom Holland to mentor him. Tom Holland gets another 3 Spider-Man movies. Miles Morales then gets another 3 Spider-Man movies. That's 9 Spider-Man movies, and none of it is as trash as Madame Web. You probably do one more Tom Hardy Venom movie. That makes 10.
The combination of live action and animated allows you to keep with Disney.
SplunkyMunkey
Member
And not only that it can give sony a Hugh access to gaming ips aswell. They might not own the gaming ip like sonic or transformers etc etc but probably can get some kind of exclusive content etc etc
StereoVsn
Member
Except Paramount kept losing money Which is why they are selling. Paramount + isn’t profitable.
The only streaming company that’s profitable is Netflix with Disney projecting to get out of the Red this year with their Hulu combination.
Sony could make more $ just selling content to other streamers. Also, again, Sony management is short changing the gaming division which is by far more profitable to prop up their middling movie division.
NecrosaroIII
Ask me about my terrible takes on Star Trek characters
So we can get a Cheersverse MMO.
Mibu no ookami
Member
I think if they're able to buy Paramount, they might look at buying Sega to get full rights to Sonic and really build him out on multiple layers. You might also use Sega as a building block for Japanese developer recruitment. They have some IP that they can maybe rebuild over time similar to how Persona has been built out over time.
I think there are a lot of two way synergies, like maybe Jak and Daxter, Ratchet and Clank, and Sly Cooper on Nickeldeon for example.
Doubt you go the gi joe transformers route though.
I think this really comes down to mission impossible, star trek, top gun, SpongeBob, avatar, tmnt and some other options like nickeldeon vs PlayStation brawl for example.
Paramounts already on the rebound. Their streaming service is nearing profitability and has a lot of room to grow. Their other divisions are also getting healthier post pandemic.
I doubt they'd give up Paramount+ given that it just hit 71 million subscribers. You could create all sorts of packages that combine Paramount+ with PS+ and Crunchyroll for discounted pricing.
Gaming isn't getting short changed at all, that's just fanboy talk. They just bought like 6 or 7 studios within the last few years.
Mibu no ookami
Member
Netflix hit 100 million subscribers in 2017. Netflix launched streaming in 2007. It started blockbuster original content in 2013.
Paramount+ is at 71 million subscribers, it only launched in 2021.
The combination of tv and movie content between Sony and Paramount could make Paramount+ a massive streaming service and that's ignoring Crunchyroll.
Crunchyroll has 13 million paid subscribers. In 2022 Funimation had 120 registered users...
Sony has nearly 50 million subscribers to PlayStation+
Won't be surprised if they buy Tidal next.
FoxMcChief
Gold Member
Neff
Member
I'm already planning my Lilith build
schaft0620
Member
Sony does almost nothing to connect PlayStation to Sony pictures. Idk why anyone would ever think this would impact PlayStation any time soon.
Edit: Before you comment, PlayStation is driving the Movie/TV stuff (Twisted Metal, TLOU) not Sony pictures.
Edit: Before you comment, PlayStation is driving the Movie/TV stuff (Twisted Metal, TLOU) not Sony pictures.
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SplunkyMunkey
Member
Category:Paramount Pictures franchises - Wikipedia
Here's a complete list that Paramount owns or made in partner with and transformers is in there which in theory sony can use another publisher not Microsoft own to make transformers there's alot of gaming opportunities like World War z not only that u can make kid games like rugrats , spongebob etc , open world games like tmnt , mission Impossible,