Media conglomerate Paramount Global (NASDAQ:PARA) (NASDAQ:PARAA) has reportedly concluded that it won’t put up BET for sale, the Wall Street Journal confirmed. For months, Paramount has been in discussions with potential bidders to sell its majority stake in BET, which owns VH1 and BET cable networks. However, after due pondering, the media house decided that selling the stake would not do enough to deleverage its balance sheet.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Potential bidders for the sale included media tycoon Byron Allen, actor-producer Tyler Perry, rapper Sean “Diddy” Combs, and former basketball player Shaquille O’Neal. The bids for the majority stake sale ranged from $2 to $3 billion. Paramount even notified the bidders about its decision to withdraw the sale procedure on Wednesday, August 17.
Media Companies Continue to Face Challenges
Media companies worldwide are facing challenges in their legacy TV businesses. Consumers are resorting to cord-cutting and clinging to online streaming subscriptions. The report cited the research firm MoffettNathanson, which stated that only 45% of U.S. households had cable TV or satellite subscriptions at the end of the first quarter. This is the lowest subscription rate in the last 37 years, depicting the hardships of cable TV operators.
The diminishing viewership of traditional TV channels is forcing media companies to sell off their stakes in them. Even Paramount sought to monetize by selling a majority stake in BET. It wishes to focus on its Paramount+ subscription network and sell off non-core assets. In its second-quarter results released on August 7, Paramount also announced the sale of its publishing house, Simon & Schuster, to KKR for $1.62 billion.
Similarly, entertainment house Walt Disney Company (NYSE:DIS) has announced its intent to sell off its broadcast networks, including ABC Broadcast, FX, and National Geographic. Plus, Disney inked a deal with Penn Entertainment to launch a sports betting business under the brand name, ESPN Bet. Media powerhouses are also strategizing ways to curb costs and become leaner and more profitable.
Is Paramount a Buy, Sell, or Hold?
Of the 10 top analysts who recently rated PARA stock, four have given it a Buy rating, one has given it a Hold rating, and five have given it a Sell rating. Top Wall Street analysts are those awarded higher stars by the TipRanks Star Ranking System. This is based on an analyst’s success rate, average return per rating, and statistical significance (number of ratings).
Based on these top analysts’ views, Paramount Global stock has a Hold consensus rating. The average Paramount Global Class B Shares price target of $18.89 implies 26% upside potential from current levels. Meanwhile, PARA stock has lost 10.8% year-to-date.
