Paramount Global sells Viacom18 stake to parent Reliance for $517Mn

Paramount Global has finalized the sale of its stake of 13% in Indian media company Viacom18 – according to media reports, the stake will be sold to Reliance Industries for a substantial $517 million. The transaction was disclosed in a Securities and Exchange Commission (SEC) filing.

Reliance Industries, already the majority shareholder in Viacom18, will see its ownership increase to over 70% upon completion of the deal. This development also follows similar sales of Simon & Schuster publishing and layoffs to reduce Paramount’s debt. Paramount Global itself continues to face financial challenges – with CEO Bob Bakish at the helm and under the control of Shari Redstone, Paramount has been grappling with mounting debt and losses in its streaming business. Recently, it laid off around 800 employees in the US as part of its cost-cutting initiative as well.

The share sale comes when Viacom 18 has been on a high, with the recently announced merger between Viacom 18 and Disney’s India business. The joint venture, valued at $8.5Bn, aims to merge their respective media and streaming assets in India and create a formidable entity in the country’s rapidly growing, internet-heavy entertainment landscape. With Disney’s expertise in content creation and Reliance’s vast resources and infrastructure, the joint venture is poised to disrupt the market and challenge existing players. Disney will hold a stake of about 37% of the venture. Nita Ambani will be its Chairperson, while Uday Shankar has been selected as the vice chair. It is slated to be completed by March 2025.

The Paramount-Reliance deal, in a nutshell, signifies a significant shift in the Indian media industry. The combined entity is poised to capture a large portion of the audience, both in television viewership and streaming subscriptions. Reliance Industries, already a dominant force in sectors such as telecommunications and retail, stands to further fortify its position in the media and entertainment landscape through this acquisition. By acquiring Paramount’s stake in Viacom18, Reliance gains greater control over one of India’s leading media conglomerates, expanding its reach across television broadcasting and digital streaming platforms. For Paramount Global, the stake sale streamlines its portfolio and allocates resources to priority areas, potentially reducing debt and improving financial flexibility, and opens up opportunities for closer integration and collaboration between content creators, distributors, and platforms.

This raises challenges for competitors like Zee Entertainment, Sony, Netflix, and Amazon Prime Video. Viacom18 currently has 40 television channels, including Comedy Central, Nickelodeon and MTV. As of now, the completion of the Paramount-Reliance deal hinges on regulatory approval and the finalization of the Disney-Reliance merger. Paramount will continue to license content to Viacom18 even after the sale.

Together. the JV between Reliance, Viacom18, and Star Disney holds immense promise for transforming the Indian media and entertainment landscape, capturing nearly 85% of the on-demand streaming service audience in the country by leveraging Viacom18’s rich content libraries, Star Disney’s extensive network, exclusive rights to distribute Disney films and productions in India, and Reliance’s technological prowess.