Sony, Apollo Express Interest in Buying Paramount
Sony, a sprawling international conglomerate known for its cutting-edge electronics business, is an unconventional suitor for Paramount. Like Comcast, which owns NBCUniversal, Sony has a highly profitable business outside traditional media, generating hundreds of millions of dollars from video games, music, imaging and sensors. That insulates Sony from the travails of the media industry, which has lately been challenged by the decline of the traditional theatrical business and the death of cable television.
The letter, which was signed by Tony Vinciquerra, the chief executive of Sony Pictures Entertainment, and Aaron Sobel, a partner at Apollo, is intended to be a starting point for negotiations to acquire the company, according to be a person familiar with the matter. The two sides have not begun doing due diligence, a process that could affect the amount Sony and Apollo are willing to pay.
One looming question for both Apollo and Sony is the eventual fate of Paramount’s CBS broadcast network. Regulations restrict foreign ownership of broadcast networks, throwing up a potential roadblock for Sony Pictures, a division of the Tokyo-based Sony Group Corporation.
But the companies believe they can overcome those concerns, according to two people familiar with their plans. Apollo, a U.S.-based firm, already owns the TV station group Cox Media Group, a deal that required approval from the Federal Communications Commission, which regulates U.S. broadcasters. The F.C.C., however, blocked a separate deal that involved Apollo, when the investment firm Standard General tried to buy Tegna, a TV station group, with financing from Apollo.
One possible remedy under consideration is to have Apollo, which has already gone through government approval, hold the license for the CBS broadcast network, the people said.
