The deal to sell media giant Paramount (NASDAQ:PARA) to somebody has proven a long and arduous affair, with potential suitors jockeying for position for several months now. But whoever comes out ahead—and it may be nobody at all—Paramount is hoping for a “seamless transition.” Can it get it? Investors seem skeptical as shares are down fractionally in Friday afternoon’s trading.
A recent look at the history of studio sales from Deadline underscored the fact that most of the time, studio sales are not orderly and calm affairs. Rather, much like Paramount’s own “The Naked Gun” release, it’s more like a fireworks factory exploding in the background while a studio representative insists that there’s nothing to see here.
Paramount’s own history suggests that much; back in 1966, it underwent a “transition” that resulted in three of the studio’s worst films ever being released. These titles, known as “Bluhdorn’s Bombs,” included “Paint Your Wagon,” “Darling Lili,” and “On a Clear Day,” all of which were musicals that went horribly awry. This led to the Sumner Redstone era and, in turn, the Shari Redstone era.
Big Changes Ahead?
Already, we’ve heard about likely changes ahead. Sony (NYSE:SONY) looks to sell off large chunks of the studio, including CBS News and the Paramount Pictures studio lot. Much of Paramount’s stake in linear television could also be sold off, a potential result of Sony’s inability to hold licenses for television in the United States. The deal under Skydance requires quite a bit of change, too, while the deal under Byron Allen may not even happen at all.
But even if there’s no deal, there are certainly other possibilities and other streaming platforms that might well welcome a partnership setup. No matter how it goes, though, we can be sure it will not be “seamless.”
Is Paramount a Buy or Sell Stock?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on six Buys, eight Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 13.89% loss in its share price over the past year, the average PARA price target of $13.29 per share implies 1.8% upside potential.
