National Amusements, the parent company of Paramount Global, has received a $125 million investment from BDT & MSD Capital Partners, an investment firm that specializes in supporting family-controlled businesses and estates, just days after Paramount slashed its dividend — a revenue stream for National Amusements’ owners, the Redstone family.
The influx of cash is designed to take pressure off of Paramount Global stock price, which has been under water in recent months in part because of concern about declines in traditional flows of media revenue, such as advertising and distribution, as the companies grapple with the rise of streaming video. The deal will allow National Amusements to pay off some existing loans that have been secured by the company’s Paramount Global shares.
“Our expanded partnership with BDT & MSD reflects our strong belief in Paramount’s ability to deliver value to all shareholders. Paramount has the best assets in the media industry, with an incredible content library and IP spanning all genres and demographics, as well as the No. 1 broadcast network, the leading free ad-supported streaming television service and the fastest-growing pay streaming platform in the U.S.,” said Shari Redstone, Chair, CEO and President of NAI who is also chair of Paramount Global. “NAI has conviction in Paramount’s strategy and execution, and we remain committed to supporting Paramount as it takes the necessary steps to build on its success and capitalize on the strategic opportunities in our industry.”
National Amusements will use the BDT investment to pay down its revolving loan and “recent term loan borrowings,” the company said. After it pays down those loans, it will reduce interest expense and “obligations to make future pledges under these facilities will be eliminated,” National Amusements said.
National Amusements and BDT & MSD Capital have had an advisory relationship for the past few years.
“We are pleased to partner with National Amusements in a transaction that supports its stewardship of Paramount Global,” said Byron Trott, chairman and co-CEO of BDT & MSD Partners. “Paramount has an incredible legacy, underpinned by its industry-leading content and media assets. We believe strongly in the value creation opportunities ahead for the company and its shareholders.”
Paramount Global shares are down 13% for the year to date, after losing 50% of their value in 2022. Earlier this month, executives vowed that investment in streaming would peak in 2023, and noted the company is trying to sell off assets it believes are no longer core to its mission. These include its BET cable unit and the Simon & Schuster book-publishing operation.