Paramount Global has scrapped an auction of Black Entertainment Group as bids from prospective buyers including media mogul Tyler Perry were disappointing, sources told The Post.
The auction of BET — which operates cable channels VH1, BET and streaming service BET+ — kicked off earlier this summer but hit a roadblock after “Madea” creator Perry refused to raise his $2 billion bid to meet Paramount’s asking price of $3 billion, The Post previously reported.
BET’s owner Paramount Global quietly notified bidders late Wednesday that it had cancelled the sale, a source said.
“We made this decision because the benefits of maintaining a majority stake in BET Media Group creates more value for Paramount than any of the proposals we received,” a source close to Paramount told The Post.
The source noted that Paramount had been looking for a deal “which could return the asset to Black ownership” with a “party that could be a good partner and responsible steward of the assets and the mission” — but nevertheless came up short.
Paramount also had hoped for a deal that would “result in meaningful de-leveraging” of Paramount’s balance sheet,” according to the source.
While bids fell short, there are still “significant synergies between BET and the rest of Paramount” in distribution to local TV affiliates, advertising and streaming, according to the source.
A spokesman for Paramount Global declined to comment.
Paramount’s sell-side bank JPMorgan was expected to offer financing to suitors when the auction started and then failed to do so, raising questions about the strength of the BET Group, two sources close to the situation told The Post.
Paramount then missed its forecast for BET’s earnings during the auction process raising more questions, a source said.
Sources said Byron Allen, the comedian-turned-media mogul who has amassed a broadcasting empire that includes the Weather Channel, emerged late in the auction as the top bidder with an offer worth roughly $3 billion.
Nevertheless, Paramount did not engage Allen in high-level talks after he made his bid last month, a source close to the situation told The Post.
“Paramount did not want to sell BET to Byron Allen,” a source at the company said, pointing to Allen’s lack of committed financing.
Instead, over the last few weeks, the company had been pushing Perry, who already owns a 25% stake in BET’s streaming service, BET+, to increase his offer.
Reps for Perry did not respond for requests seeking comment. Allen declined to comment.
Sources said Allen received letters from banks saying that they are confident they would finance the offer, which is at well more than a 12 times Ebitda [earnings before interest, taxes, depreciation and amortization] multiple, after they conducted more due diligence.
In 2021, Allen bid for station group Tegna but it was revealed that his Allen Media, which includes the Weather Channel already had a fair amount of debt.
Paramount is meanwhile facing questions including the true value of the company and its many assets, which include MTV, CBS, movie studio Paramount Pictures and Nickelodeon.
Earlier this month, Paramount sold Simon & Schuster for a lower than expected price tag of $1.62 billion to private equity firm KKR.
Paramount had previously tried to sell Simon & Schuster to book publisher Penguin Random House, for $2.2 billion, but the sale was blocked by a federal judge on antitrust grounds.
Sources expect Paramount to use the proceeds from the sale of the 99-year-old book publisher to pay down debt– as would a sale of BET. Insiders expect the company to hold on to BET until the advertising market improves and then it will be put up for sale again.
The decision to drop the sale of BET follows Paramount’s second-quarter earnings report, in which the media giant, reported a loss of $424 million for the three months leading up to June 30, due to losses in its streaming division.
Second-quarter revenue was $7.62 billion.
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