Paramount Global’s Fate is Just the Start of Media’s 2024 M&A Mysteries

2024 was shaping up to be the year for the media sector long-awaited consolidation wave, with Paramount Global leading the way. But even as suitors like Skydance Media, Warner Bros. Discovery and Allen Media Group line up, it may not be so simple.

Naveen Sarma, managing director of S&P Global Ratings and a veteran credit analyst focused on the media business, sees a potential deal stymied by a range of factors he enumerates on the latest episode of the Variety podcast “Strictly Business.”

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“I actually don’t think that we’re going to get resolution on a potential Paramount sale for a while for a number of reasons,” said Sarma. “I’m a bit skeptical about the spigot opening up on a lot of deals happening this year.”

Surveying the field of media players, he sees the biggest question being one of timing given the political changing of guard toward the end of the year in the U.S.

“If you do it now, you’re kind of putting yourself in front of regulators before a potential change in administration,” he said. “So why not wait until later until you have greater clarity over who might you’d be talking to? Why don’t you wait until later when your balance sheets are in much better position to be able to finance a transaction?”

That said, Sarma offered an assessment of the capital markets more conducive to dealmaking than it’s been in quite some time.

“You know what, it’s actually good for the first time in a couple of years,” he observed. “People have a line of sight on potential declines in interest rates. Frankly, I think a lot of companies need to raise capital and they’ve kind of held off because they didn’t know where interest rates were going to go.”

Sarma touches on a wide range of issues impacting the media sector in the episode, including the competitive field in the streaming race, the impact the 2023 strikes had content production and how artificial intelligence will cast a shadow on Hollywood’s future. His appearance on “Strictly Business” marks his fourth on this podcast. He was previously a guest on episodes from 20222021 and 2019.

“Strictly Business” is Variety’s weekly podcast featuring conversations with industry leaders about the business of media and entertainment. (Please click here to subscribe to our free newsletter.) New episodes debut every Wednesday and can be downloaded at Apple Podcasts, Amazon Music, Spotify, Google Play, SoundCloud and more.

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