Checkers, Chess, and Paramount

Is the delayed Skydance/Paramount deal about CBS, the NBA, Venu, animation, emotions, or all of the above?
Why Is Shari Redstone so Upset?
Maybe Skydance’s deal for Paramount isn’t what she expected. Or maybe no matter what happens, she knows she can’t match her father’s empire-building legacy.

This is the story (and deal) that will seemingly never end. (Update: truly.) But a couple new twists in the plot are interesting. First, the notion that Warner Bros Discovery head David Zaslav is pushing to acquire CBS:

Zaslav is said to covet a broadcast network, which would put WBD on more equal footing with NBCU and Disney, which leverage their broadcast networks to help their cable portfolio, and would help with sports rights. As WBD is now facing the likely loss of its NBA games, a deal for CBS would also allow Zaslav to merge TNT Sports with CBS Sports, giving his company the NFL, the Masters and expansive college sports rights, while unifying the March Madness tournament in one place. And of course WBD could merge CBS News and CNN, allowing for extensive cost cutting and synergies, following through on a deal that was discussed and subsequently abandoned in the early 2000s. A WBD source with knowledge of Zaslav’s thinking points out that the company would be one of the few prospective buyers without significant regulatory issues because it doesn’t currently own a broadcast network or station group.

While such a secondary deal has been rumored for a while, Zaslav now seems to be making more overt references to it in public. And it may tie directly into the NBA rights deal which is also unfolding in real time. In those dealings, it sure looks like Zaslav has bungled the position WBD was in to lock up rights for cheaper than they are now rumored to be selling to Comcast's NBC unit. But if he were to lock up NFL rights (by way of a CBS deal), that would be far more valuable than overpaying (in his mind, but also probably true) for NBA rights. And given the state of WBD's finances, it seems highly unlikely they could do both deals.

So perhaps he's just dragging out the NBA talks (where WBD still has matching rights they can execute – or not, depending on which side you believe) until he has more visibility into the viability of a CBS deal. Maybe the rumored "4th package" (the notion that WBD is asking the NBA to carve out a smaller, fourth package of games for WBD in exchange for a promise not to sue over the matching rights) plays into all of this as well (as it would require all of the current deals to be reworked, thus extending the time to get this all done).

That would be... a pretty savvy maneuver if Zaslav could pull it off! It moves WBD from a position of increasing weakness – to the point where Disney is more or less gifting them college football games to try to bolster their new sports streaming partnership – to one of pretty good strength. 'Max' mixed with CBS content becomes far more compelling as one of the stand-alone streamers – especially with said NFL rights, which they can upsell. And it would boost the aforementioned Venu (the weirdly-named sports streaming partnership) as while they would lose some NBA games, they would gain NFL ones, which are far more important for such a streaming service.

And it would leave Comcast/NBC as the lone network out of the package. So perhaps they would quietly be forced to slink in...1

One more thing: also perhaps delaying/complicating things on the Skydance side...

Meanwhile, there are the questions swirling in the animation community about the absence of Lasseter, the former creative head of Pixar and Walt Disney Animation Studios. While Skydance Animation has been touted as an attractive element of a potential Skydance-Paramount hookup (though Paramount has its own animation division, with IP like SpongeBob SquarePants), but in reality, the picture has been complicated. Luck, Skydance Animation’s first feature film under Lasseter, got middling reviews upon its release on AppleTV+ in 2022, though it has performed steadily on the streaming service. (The film had been started before Lasseter was hired but was expensively reworked once he arrived.) Sources say the relationship between Skydance Animation and Apple blew up when the tech giant concluded that other planned projects were too costly and not strong enough creatively. One sticking point was a planned hand-drawn film, Ray Gunn, from Incredibles director Brad Bird for a number exceeding $150 million.

Skydance then shopped the animation deal to other studios, which have their own animation divisions, but none stepped up. In October 2023, Skydance moved its animated feature slate to Netflix, meaning that none of Lasseter’s films has a chance of getting a meaningful theatrical release. And notably, against that backdrop, Lasseter’s health is key, as an informed source says a material change could upend Skydance’s deal with the streamer.

Masters notes that Lasseter has been "absent from work for several weeks". Sources tell her he's working from home while recovering from some kind of surgery, but it's another strange situation in an otherwise illustrious career. Regardless, obviously a Paramount/Skydance animation division run by Lasseter is far more valuable than one right by pretty much anyone else.

Update June 12, 2024:

The on-again/off-again deal is now off once again!

You Are Not Serious People
National Amusements, indeed

1 What if this is all some even crazier extra-dimensional maunever by Bob Iger to force Comcast's hand on Hulu?!