Shari Redstone Scrambles to Meet $40M Debt Obligation; Sells Real Estate Assets

Shari Redstone Scrambles to Meet $40M Debt Obligation; Sells Real Estate Assets

Edited by:TJVNews.com

In a frantic bid to meet looming debt obligations, Shari Redstone’s National Amusements, the holding company wielding control over media titan Paramount Global, has engaged in a flurry of real estate sales, shedding a portion of its assets to cover a hefty $40 million debt payment due imminently, according to a recently published report in the New York Post.

According to the information provided in the Post report, the daughter of the late media mogul Sumner Redstone finds herself entangled in a high-stakes battle to retain control over both National Amusements and Paramount — the remnants of her father’s sprawling empire, which encompasses CBS, the Paramount+ streaming platform, a movie studio, and a suite of cable TV networks including Comedy Central, Nickelodeon, and MTV.

Reports indicate that Shari Redstone managed to scrape together approximately $27 million towards the debt payment earlier this week, leveraging the proceeds from the sale of real estate assets. However, the report in the Post indicated that the frenetic divestment of property underscores the financial strain faced by National Amusements, with observers noting that Redstone’s maneuverability appears constrained amid the cash crunch.

The auction process initiated for National Amusements appears to be faltering, with potential suitors such as Apollo Global Management reportedly withdrawing from contention. The Post report added that this development signals a setback for Redstone’s efforts to offload the company amidst mounting pressure to address its debt burden.

While National Amusements remains tight-lipped about the ongoing developments, sources familiar with the matter reveal that David Ellison’s Skydance Media remains the sole interested party in acquiring the company, as was reported by The Post. Skydance’s interest extends beyond National Amusements to include a bid for Paramount, envisioning a complex merger of movie studios.

Meanwhile, Paramount, armed with an independent board, is exploring alternative pathways forward. The Post report pointed out that recent reports suggest that merger discussions with Warner Brothers Discovery have fizzled out, leaving Paramount to chart its course independently.

To cover the remaining $13 million of the impending debt payment, Shari Redstone is anticipated to tap into existing lines of credit facilitated by Byron Trott’s BDT & MSD Partners. However, the Post reported that the absence of a grace period for the $40 million debt obligation heightens the risk of default should National Amusements fail to meet its financial commitments in full and on time.

As the March 1 deadline looms large, the saga surrounding National Amusements and Paramount underscores the volatility gripping the media landscape, the report in the Post added. The outcome of these financial maneuvers will not only shape the future of these entities but also reverberate across the media industry, signaling potential shifts in ownership and strategic direction.

The company, grappling with financial challenges, is also staring down the barrel of a substantial $180 million payment due by May 2025. While the looming debt obligations cast a shadow of uncertainty over National Amusements’ future, the urgency to meet immediate financial commitments underscores the pressing need for a viable solution.

Observers speculate that the lack of a significant drawdown on the company’s credit line may signal a less optimistic outlook for a potential sale. The Post also reported that the reluctance to exhaust available credit resources suggests a cautious approach, raising questions about the feasibility of striking a deal within the desired timeframe.

Despite the financial strain, National Amusements appears hesitant to entertain the prospect of selling off shares in Paramount, a move that could dilute its control over both the media conglomerate and National Amusements itself, according to the information in the Post report. Instead, the company seems inclined to explore alternative avenues to alleviate its financial woes, with real estate sales emerging as a preferred strategy.

Despite the looming financial challenges, sources suggest that National Amusements is currently managing to stay afloat. However, the company’s financial stability remains precarious, contingent upon its ability to navigate the turbulent waters of the media landscape and secure sustainable solutions to its mounting debt burden.

National Amusements’ asset portfolio, which includes approximately 1,000 movie screens, holds significant value, primarily driven by its shares in Paramount. The Post report mentioned that while these shares wield considerable voting rights, they represent only a fraction of Paramount’s total ownership, leaving National Amusements with limited leverage in influencing the company’s direction.