Sports technology provider Nomadar is going so far as to bet on the next-generation of growth for soccer in America by buying Fox Soccer Academy, which trains young players hoping for college and professional careers.

The theory is that the growing popularity of soccer will get more youngsters to play the game. Better young players will make the American teams stronger and make the game even more popular potentially minting future stars.

But the big story in finance was Paramount settling the antitrust lawsuit that had stalled its $110 billion acquisition of Warner Bros. Discovery, with many in Hollywood shocked that California Attorney General Rob Bonta struck an agreement that didn’t include any significant divestitures. The deal is now set to clear in the next few weeks but the drama is unlikely to end as the company deals with debt and cuts staff.

Thanks for reading and please send tips to jon.lafayette@thewrap.com

P.S. Hollywood’s latest round of consolidation is still playing out, and there are plenty of questions about what comes after it. The people who price, finance and navigate these deals take the stage at TheGrill on Sept. 30. Subscribers get 30% off with code WRAPPROVIP

THE DEEP DIVE

Investing in Soccer by Betting on Youth Sports

The World Cup raised U.S. interest in soccer, and many investors looked for ways to cash in.

Nomadar last week made a bet on more youngsters playing the game, agreeing to acquire Fox Soccer Academy, which started its training business in New York 11 years ago, and now has facilities in North Carolina, the United Kingdom and Australia.

NASDAQ-traded Nomadar is now majority owned by the Cadiz soccer team, which plays in the second division of Spain’s professional La Liga. Nomadar has been billed as the team’s sports-technology business. To give you a sense of its imporance, Cadiz Club de Futbol shareholders will vote on Sept. 30 on a reverse spinoff that will make Nomadar the majority shareholder of the team.

• Nomadar is buying Fox Soccer Academy for an upfront payment of $2 million. Fox has facilities in the U.S., the U.K. and Austria that have 2,100 boys and girls enrolled.
• The Spanish soccer team Cadiz FC controls Nomadar, but the companies have approved a reverse-spin transaction that will make Nomadar the majority owner of the team. 
• Nomadar is building a multi-use facility in Cadiz that will host the team and other businesses. 

Nomadar’s CEO of Americas & Executive Vice Chairman Joaquin Martin told The Ledger that the company’s tech-oriented sports platform is built around the team, with businesses in training young players, real estate development and digital products. “We are building a very unique model,” Martin said. “It’s a global connected ecosystem. The center of the ecosystem is the professional soccer club.”

Since going public last year, Nomadar hasn’t posted a profitable quarter. In the second quarter, the company reported a net loss of $459,941, or 3 cents per share, as revenue doubled to $669,571.

Martin said its early days have been spent readying the company to set its operating units up and running while preparing for the reverse spin. 

“It has been an intense 10 months because we have been achieving different milestones,” Martin said.

Those milestones include acquiring land in Spain for the multi-purpose event center it is developing and preparing for the reverse spinoff. The next step is building its training division by acquiring Fox Soccer Academy.

“At the end of the day, we will have all the standards of a publicly traded company, access and possibilities to grow,” he said.

Nomadar is paying $2 million upfront for Fox plus a delayed payment of $2.6 million and up to a $1.5 million earnout. Fox was founded by Raluca Gold-Fuchs, a Goldman Sachs veteran, and her husband, Christian Fuchs, who played for Leicester City when it won the Premier League in 2016 and is now the assistant coach for Charlotte FC of the MLS. Nomadar has an option to buy the remaining interest in Fox for $4.4 million.

Fox has produced players that have been called for national teams. The Fuchs’ sons graduated from the program and have played in the professional in the MLS and in the U.K. Its revenue comes from tuition paid by their young players’ families.

Gold-Fuchs said they got to know Nomadar through a friend. Fuchs said the combination of the science-based techniques Fox uses at its academy, plus the high-performance training program Cardiz employees in Europe will help young players advance to college and professional teams. Being connected to an historic professional team will also give Fox a boost, particularly in international markets.

Gold-Fuchs said Fox has expanded carefully so far and now has 2,100 players in its multiple locations. “We want to continue what we’ve been doing well so far. Nomadar is adding this international aspect that we can provide to our players that other academies cannot,” she said. “We will grow the same careful way we’ve been growing until now. We definitely want to grow, but not in an aggressive way.”

Fox has seen interest in soccer grow in the U.S. with Lionel Messi joining the MLS and the World Cup showing America’s enthusiasm for the game, that growth is bound to continue, Gold-Fuchs said.

“The popularity will pick up, and the more money that goes into the sport, and the more good players you get into the sport, the more it’s going to grow,” she said. 

Sports investors are looking at modern multi-use facilities as an opportunity for teams to generate revenues beyond ticket sales and media rights. 

The complex Nomadar is building in Cadiz will include a 35,000-seat venue for sports, cultural and music events, plus a convention center, hotel and shopping. It is expected to be completed at the end of 2030.

At the same time, Nomadar is getting set to launch several products that combine the in-person experience it offers with digital experiences, Martin said. It has a subscription product for people who want to work for professional soccer teams, and it plans to launch a program for people who want to get some of the benefits of the Cadiz training regime without attending facilities in person.

Nomadar is also looking at additional facilities it can build and, in the future, could expand by buying other professional teams.

“Connectivity  inside the ecosystem is a natural trigger for growth. Martin said.

Nomadar, which traded at $21 after it went public in a direct offering last October,  closed Thursday at $1.53.

FINANCIAL ROUNDUP

The Paramount-WBD Saga (Concluded?) 

The billionaire Ellison family got its way and CEO David Ellison expects Paramount Skydance will close the $110 billion acquisition of Warner Bros. Discovery in two weeks after reaching a settlement with a dozen state attorneys general, avoid a costly delays which were riddled with potential fees. The judge overseeing the case wants Paramout to address “certain outstanding questions” and concerns raised by Sen. Corey Booker by Mondoay. 

Before the close, Paramount was still looking for financing and considered asking one-time trillionaire Elon Musk to be an equity investor, according to Semafor. On Thursday, it launched a syndication to raise $7.5 billion in debt to help fund the deal.

The legal settlement came after Paramount was seemingly ready to make good on its threat to move out of California, applying tremendous pressure on Attorney General Rob Bonta. After the deal was reached, Ellison said the company’s headquarters would remain in Los Angeles.

What shocked many in Hollywood was not just the speed of the proceedings but how Paramount came out of this unscathed. The settlement did not require any significant “structural remedies,” such as the sale of cable channels, that Bonta contended were needed to address competitive concerns.

In the 32-page consent decree, Paramount agreed to produce 30 films a year for two years, and 32 films the following three years. The company agreed to spend $1.5 billion over three years on domestic production and keep its studio lots open, and treat its cable channels as different entities when negotiating with distributors.

To answer concerns that the Trump-friendly Ellisons would now control CBS News and CNN, Paramount agreed to form an independent oversight board for the news operations, although press advocate groups expressed doubt the entity would have any influence on operations. Connecticut AG William Tong had demanded that Paramount divest CNN and CBS and The Freedom of the Press Foundation already slammed the agreement as worthless. 

The settlement was also denounced by the Block the Merger coalition. It got a better review from theater owners, which had already thrown their support behind a settlement a few weeks ago. The Writers Guild of America also settled its suit against Paramount, largely because it lacked the financial footing to mount a long-term battle. 

Barclay’s analyst Kannan Venkateshwar called the terms of the settlement “relatively benign” for the company, although it limits its ability to make some near-term asset sales. The pledge not to sell studio lots “could be seen as an additional constraint limiting synergies but given the commitment to make 30 movies, the company will likely need this capacity in any case,” Venkateshwar said. “The focus will now turn to integration.”

Venkateshwar also pointed out that as part of the WBD deal, the company would issue warrants attached to Class B shares. The warrants will be separately traded.

“While the warrants don’t necessarily change the equity value today, they will result in incremental dilution when exercised but will also bring in cash when exercised of about $5.7 billion,” he said. “However, the warrants have a long duration and will trade independently which means that this part of the capital structure will be valued on factors beyond just the immediate stock price.”

Worth reading:

• Breaking Down the Paramount-Warner Bros. Merger Settlement | Analysis
• Paramount-Warner Bros. Closes in Two Weeks: What Does That Mean for Creatives?
• Can Paramount’s CNN and CBS News Oversight Board Actually Work?

DEAL SHEET

• Barry Diller’s People Inc. withdrew its bid for MGM Resorts that valued the company at $18 billion. People Inc. owns 27% of MGM shares and offered to buy enough to give it a controlling interest. “We didn’t feel the mix was coming together in the way we had hoped and have decided not to pursue taking the company private at this time,” Diller said. On Thursday, reports surfaced that MGM was considering  a bid for People.
• A24 and The New York Times joined the list of companies reportedly interested in acquiring Letterboxd for more than $300 million. Sony, Netflix, Paramount and private-equity firms RedBird and TPG had previously been listed as potential bidders for the company, controlled by Tiny since 2023.
• Podium Entertainment, a publisher focused on independent authors and audiobooks, was acquired by private-equity firms Shamrock Capital and Flexpoint Ford. No price was disclosed, but sources familiar with the situation valued the deal at $400 million. Podium, which has been controlled by Presidio Investors since 2019, was advised by LionTree. Podium’s existing management will stay in place.
• Unit1 Studio, which produces avatar concerts, raised $20 million in a round of financing led by Balderton. An avatar concert is a production that features a digitally constructed replica of a music artist performing live on a stage inside a real venue. Unit1 plans to offer young fans a concert experience featuring bands from the 1970s, 1980s and 1990s. 
• Sister Group, the entertainment company run by Elisabeth Murdoch and Jane Featherstone, bought a minority stake in Common Interest, an advertising company founded by Anthony Freedman. The two companies are working together on projects backed by brands as part of a strategic partnership. 

WRAP 20 INDEX

Here’s how the companies in our Wrap 20 Index performed this week. 

FROM THEWRAP

Creatorverse: Youtube Wants to be Way More Than the Next Hollywood

How Zach Cregger Powered ‘Resident Evil’ to Box Office Records

Bob Chapek Blames Bob Iger for His Disney Downfall, Stands by Theme Park Price Hikes in Memoir

HEARD AROUND

Winamp Is Back and Wants a Piece of Spotify’s Busines

The Tech Elite Is Funding an Alternative to College

Fender Makes Enemies With a Messy Fight Over Its Iconic Strat

K-Pop Is Betting on AI and Robots. Will Fans Buy It?

The post Investing in the Next Generation of Soccer Stars appeared first on TheWrap.

Analyst Rich Greenfield, known for aiming sharp questions at CEOs and 
proclaiming the end of traditional media, also wears an investor’s hat with a venture capital fund. Think former Disney exec-turned-investor Bob Iger, but on a smaller scale.

Greenfield talked to The Ledger about how AI powers some of the companies he’s invested in, plus names one public company he thinks is truly taking advantage of what the emerging technology has to offer.

With football season starting, we also look at NFL valuations and watch as Lionel Messi adds to his portfolio of fútbol teams.

Thanks for reading.

Jon Lafayette

(Send your tips and pitches to jon.lafayette@thewrap.com)

P.S. Money moves, companies change hands and the power map gets redrawn. At TheGrill on Sept. 30, the executives, investors and dealmakers behind those shifts get into what’s moving the business next. AI Creator Day is included on Sept. 29. Subscribers get 50% off through Sept. 8 with PROPERKS50.

THE DEEP DIVE

How Analyst Rich Greenfield Sees Investing as a Venture Capitalist

Rich Greenfield is best known as the LightShed Partners analyst often quoted about the difficulties traditional media companies face adapting to the streaming era. But Greenfield and his partners in 2021 set up a $75 million fund, LightShed Ventures, designed to make seed and Series A investments in tech, media and telecom startups. A second $25 million fund was launched two years ago.

“There’s never been a more exciting time to be in venture capital, given what’s happening in AI,” Greenfield told The Ledger. “The ability to create a company and scale a company with far less resources than ever before because of what AI can do is pretty incredible.”

• LightShed Ventures’ first fund launched in 2021 with $75 million. A second $25 million fund launched in 2024. 
• The value LightShed brings to AI-powered startups is its ability to introduce them to larger public companies for investments and partnerships.
• The time horizon for LightShed’s investments is 10 years, so it’s too soon to evaluate the startups in its portfolio, Greenfield said.
• One public company taking advantage of AI is Spotify. Greenfield said Spotify’s stock is undervalued.

A lot has changed over the last five years.

“When we started Fund One in ‘21, nobody was talking about AI,” Greenfield said. “By the time we got to Fund Two, obviously everything has become AI.”

Greenfield said the biggest difference between doing his analyst job and his venture job is the timeframe involved.

The public market investors who follow his recommendations, “are looking at what can you do for me tomorrow,” he said. “Whereas when you’re investing in early-stage ventures, you have to think about these as 10-year investments, right? Very often it takes four or five years to even know whether something has product market fit. I mean, it takes time.”

Greenfield said there is a symbiotic relationship between his analyst and venture roles. He readily admits LightShed is far from the biggest player in the market. “What really differentiates us is the connectivity between private market and public market,” he said. “The reason you want LightShed on your cap table is our ability to open doors to larger companies.”

Most of the public companies Greenfield covers have not yet come to grips with how AI will change industries, including the media business.

“The most important thing to think about is how does that explosion of content impact the value of these companies? I don’t think investors fully appreciate what’s about to happen,” he said. 

One exception Greenfield points to is Spotify, which he said uses AI more aggressively than any other company he covers. Spotify has launched an AI DJ, AI playlists and an AI tier that lets users create covers and remixes of participating songs.

“Spotify is truly unique today in terms of how fast they’re pushing AI functionality. They’re not getting credit for it, which I think is crazy when I look at the stock,” he said. 

While traditional media companies have been slow, startups have been pushing ways AI can transform aspects of the business including content creation and advertising.

“We love crazy pitches,” Greenfield said. 

One of LightShed’s most important investments is Telly, which gives away advanced two-screen TV sets in order to get ad revenue and consumer data. Telly this week announced a new home screen ad product that is sold programmatically.

“Every media company wants more people with TVs. You’ve got a lot of young people who don’t want to buy TVs because they’re watching on their laptops or on their phones,” Greenfield said. “If you can figure out how you can cost effectively get a large screen device into someone’s home, and if the price is free, it’s a pretty incredible opportunity.”

LightShed also has investments in 30 or so other young companies, including Peak, which uses AI to help prevent child pornography from showing up on their sites, and Vurvey, which uses AI to glean more insight out of focus groups. 

LightShed’s most recent investment is in Eventual, a company that will create analysis and news based on what’s happening in prediction markets.

“Prediction markets are certainly not going away, and when you think about news and politics and essentially everything but sports betting, there will be a huge explosion,” Greenfield said. “There’s been no media companies built around that theme, and we think Eventual is a great way to participate in the growth of non-sports prediction markets.”

Greenfield said the market for startups is strong compared to a few years ago. But he added it’s early to gauge the returns on LightShed’s investments so far.

“It is a long game,” he said. “We’re in year five of our fund. It’s still very early. We’ve got a lot of potential breakout success when I look out over the next few years, but it’s still very early to call balls and strikes.”

DEAL SHEET

• World Cup legend Lionel Messi agreed to buy a majority stake in Eldense, a soccer team in Spain’s second division. Terms were not disclosed. Messi, whose net worth is estimated at $1.1 billion by Forbes, already owns stakes in another Spanish team, a club in Uruguay and Inter Miami of Major League Soccer in the U.S. 
• Amid a consolidating media industry, Sony Pictures CEO Ravi Ahuja said his studio has no plans to prioritize “large-scale M&A.” “It’s extremely disruptive when you end up with a large company that has lots of different businesses,” said Ahuja, speaking at a Bank of America investor conference Wednesday. The process of getting a deal approved and the associated integration work “sets you back for years,” he added. Tell that to Paramount. 
• BC Partners offered to buy LIV Golf for $300 million in a deal that’s contingent on LIV surviving bankruptcy. The Saudi-funded golf tour filed for Chapter 11 protection and is asking the court’s permission to terminate millions of dollars’ worth of contracts with its golfers, including Bryson DeChambeau, Jon Rahm and Phil Mickelson. The bankruptcy is the result of Saudi Arabia’s Public Investment Fund pulling its investment. 
• The founders of Hyrox, which operates a running and fitness competition popular on social media, bought back a majority stake in the company from Infront Sports & Media. Equity firm L. Catterton helped fund the deal, which valued the company at $698.3 million, according to Reuters.

WRAP 20 INDEX

Here’s how the companies in our Wrap 20 Index performed this week. 

FINANCIAL ROUNDUP

More Questions for Fox-Roku Deal

The Justice Department made a second request for information from Fox and Roku about Fox’s proposed $22 billion acquisition of Roku. In an SEC filing, Fox said the requests were expected and that it plans to consummate the merger by the first half of 2027.

• In a report Wednesday, Parks Associates said the deal “highlights the strategic value of owning the platform that connects consumers to content, advertising and streaming services.”
• Fox has promised to run Roku independently as a way to address concerns that the streaming platform would unfairly favor Fox’s businesses after the acquisition.

How ‘Bout Them Cowboys

The Dallas Cowboys are the most valuable NFL team at $15.36 billion, according to an analysis by S&P Global Market Intelligence. The No. 2 team is the New York Giants at $12.2 billion, followed by the Los Angeles Rams at $11.5 billion.

According to S&P, valuations have jumped dramatically over the past five years. The increases are driven by the growing number of billionaires, the influx of private equity and the rapid growth in TV rights values. “This valuation growth has been sustained by rising revenues from TV rights and other avenues, such as ticket sales and an expansion in revenue multiples,” S&P said. 

Recent deals involving the Seattle Seahawks and the Atlanta Falcons indicate that multiples are still expanding to above 15 times revenue.

The least valuable NFL team is the Detroit Lions at $7.36 billion. Also at the bottom of the pile are the Cincinnati Bengals and the Jacksonville Jaguars. Their performance on the field also leaves much to be desired, with none ever winning a Super Bowl, S&P added.

Barclays Analyst Likes Spotify’s Tune

Greenfield isn’t alone in his appreciation of Spotify. Barclays analyst Kannan Venkateshwar rated the streaming music giant as “overweight” with a price target of $565 a share in a report that focused on the costs involved in providing several new AI-based products and services. 

Those costs are a concern for some investors, but Venkateshwar said his analysis found that “inference costs are unlikely to derail the margin trajectory at Spotify.” 

Spotify management has given guidance that AI costs will be “neutral to accretive,” and Venkateshwar called that guidance credible. “Once there is a more broad-based understanding of this framework, we would expect the debate on AI to move from cost to adoption, as rest of the major labels sign AI music deals with Spotify.”

Spotify closed Thursday at $521.73.

FROM THEWRAP

Creatorverse: NFL Is Doubling Down on Creators as the US Open Struggles

Florida AG Sues Netflix for Data Tracking, Targeting Kids

CNN Found a Large Audience for Its Free Service. Now Comes the Hard Part

HEARD AROUND

New Angels Owner Stan Kroenke Has Already Made Nearly $20 Billion on His Sports Teams

‘Wheel of Fortune’ Is Making a Major Change for Season 44. Here’s What Viewers Will Notice Immediately

The Sealed Document TikTok Doesn’t Want Two Senators to See

Cutting the Cord Was Supposed to Save Money. Eight Streaming Services Now Cost a Combined $139 a Month

The post Rich Greenfield on AI’s Value in Investing — and Why Spotify Doesn’t Get Enough Credit appeared first on TheWrap.

Even during this sleepy stretch ahead of Labor Day, we saw one Wall Street analyst making a big call on a media company you don’t normally hear about. 

Meanwhile, Paramount and the state attorneys general tussled over who would cover the media company’s self-imposed ticking fees, while big name stars like Tom Cruise and George Clooney weighed in on the potentially industry-shaking merger. 

Enjoy the long weekend and thanks for reading.

P.S. Money moves, companies change hands and the power map gets redrawn. At TheGrill  on Sept. 30, the executives, investors and dealmakers behind those shifts get into what’s moving the business next. AI Creator Day is included on Sept. 29. Subscribers get 50% off through Sept. 8 with PROPERKS50.

Audio Is an Overlooked Category

When it comes to smart investments, Deutsche Bank analyst Bryan Kraft likes what he’s hearing from satellite radio company SiriusXM.

With an uncertain economy, banking on advertising might be risky, but Kraft said he sees digital audio advertising as an area that is being overlooked by others in the market.

The strength in audio advertising is the basis for Kraft’s belief that SiriusXM stock price will benefit from higher multiples and that its upcoming earnings poised to top expectations.

He has boosted his rating of SiriusXM to “buy” from “hold” and raised his price target to $45 a share from $31. The stock closed Thursday at $29.77.

• Deutsche Bank raised its rating on SiriusXM stock to “buy” with a $45 price target.
• The company in July raised both its full-year guidance for revenue and earnings before interest, taxes, depreciation and amortzation by $25 million. Deutsche Bank’s Kraft called the guidance conservative and increased his forecasts even more.
• SiriusXM is expected to get a boost in advertising revenues from a deal with YouTube.
• Berkshire Hathaway has been increasing its stake in SiriusXM.

The report was issued this week following the news that Howard Stern will be returning to SiriusXM with a once-a-week show that will also be video streamed on HBO Max. One of the two channels that Stern programmed on the satellite service is being turned over to Bravo host Andy Cohen. Kraft didn’t mention Stern in is his buy recommendation, but he’s long been a key figure in the company.

“We believe SiriusXM is mispriced based on a large disconnect between consensus estimates and what we believe the company can achieve in 2027 and 2028,” Kraft said in his report. “The opportunity is further enhanced by SiriusXM’s return to allocating capital toward share repurchases in the second half of 2026, as well as what we view as conservative 2026 guidance.”

In terms of advertising, Kraft said that the deal that made SiriusXM the exclusive U.S. audio advertising representative for YouTube has been “completely disregarded” by Wall Street. Working with YouTube could generate $2 billion in annual incremental revenue by 2029 at a high-teen margin, which would boost earnings before interest, taxes, depreciation and amortization by $350 million to $400 million. Further ad revenue growth will come from an expansion of SiriusXM’s relationship with Amazon’s ad platform, which was announced in July. 

Kraft also expects that the revenue from SiriusXM’s subscription radio business will be steady as the company tries to deliver more value to consumers through companion subscriptions and the addition of more sports programming. He also expects a price increase next year. 

On its second-quarter earnings call in July, SiriusXM CEO Jennifer Witz said that the company “returned to positive net subscriber additions, increased ARPU and achieved the lowest churn in SiriusXM’s history.”

CFO Zachary Coughlin said the company was raising its guidance for 2026 for revenue by $25 million to $8.5 billion and Ebitda by $25 million to $2.6 billion. 

Kraft more bullishly estimates that 2026 revenues will be $8.6 billion, up $76.8 million from his previous forecast, and 2026 Ebitda will be $2.7 billion, up $52.9 million.

Spectrum Value

Beyond its fundamentals, SiriusXM offers value because of the spectrum it controls, Kraft said. The FCC might restructure some of the spectrum the company no longer needs and that newly created band could be sold or leased. 

Another plot point in the SiriusXM story is that Berkshire Hathaway has been increasing its stake in the company. In its most recent filing, Berkshire Hathaway said it owned 37% of SiriusXM’s outstanding shares. With SiriusXM buying back shares, Berkshire’s stake could rise to more than 50%.

“Will the [SiriusXM] board pivot to special dividends, a larger recurring dividend or ask Berkshire to sell into the buyback proportionately in order to avoid crossing the 50% threshold? Time will tell, but we don’t view this as a concern for the investment case,” Kraft said.

DEAL SHEET

• Stan Kroenke agreed to buy the Los Angeles Angels Major League Baseball team from Arte Moreno in a deal that values the franchise at $4 billion. That sum tops the previous record price for an MLB team of $3.9 billion, which was paid for the San Diego Padres. Kroenke Sports & Entertainment already owns the L.A. Rams of the NFL, the Denver Nuggets of the NBA, the Colorado Avalanche of the NHL and the English Premier League’s Arsenal soccer team. 
• Visko Platform Inc. raised $10 million in pre-seed funding led by Llama Ventures. Visko opened public access to Orbis, which generates and streams video in real time using AI. The company was founded in 2025 by Qing Yin, a Stanford Ph.D. who spent three years at Apple.

WRAP 20 INDEX

Here’s how the companies in our Wrap 20 Index performed this week. 

FINANCIAL ROUNDUP

The Paramount-WBD Saga (Continued)

It’s been a relatively quiet week on the Paramount Skydance-Warner Bros. Discovery front.

The dozen attorneys general who have blocked the deal with an antitrust suit asked Judge Araceli Martínez-Olguin to deny Paramount’s request that the states post a $1.9 billion bond to cover the ticking fees and other costs resulting from delays in closing the transition.

The AGs argued that Paramount should not be able to “offload its responsibility” after putting the ticking and breakup fees into the takeover agreement. 

Judge Martinez-Olguin set a hearing on the bond issue for Sept. 24.

Meanwhile, in the court of public opinion, Hollywood celebrities expressed divergent opinions on the deal. Bradley Whitford, Hannah Einbinder, W. Kamau Bell and Jane Fonda appeared in a video opposing the deal. The video warns that “corporations make all kinds of promises to get mergers approved, and then they break them.”

On the other hand, Tom Cruise said on “The Pat McAfee Show” that Paramount would deliver the 30 movies per year it is promising after the merger goes through. “I want us to come together as a community to help make those 30 movies,” Cruise said. “It’s not just going to be, you know, Paramount doing it. Everyone’s going to need all the help of every artist to be able to do it.”

Another big star, George Clooney, went the opposite route, saying he wouldn’t endorse the deal. “I don’t see how the merger financially ends up making sense,” he said at a press conference at the Venice Film Festival.Skinny on National CineMedia

Analyst Drew Crum at B. Riley Securities cut his target prices for National CineMedia’s stock price to $3.75 a share from $4 and created a pro-forma model anticipating National CineMedia’s $275 million acquisition of Captivate, which operates ad-supported digital video screens in elevators and lobbies.

Crum “slightly” lowered his revenue and earnings estimates for the third quarter, citing box-office underperformance in July, partially offset by a record August. 

He said Captivate offers National CineMedia attractive revenue growth and profit margins but will leave the company’s balance sheet with more debt.

“We think until the market gains comfort with elevated leverage (post-deal) and a perceived pivot in strategy, the stock may continue to trade sideways,” Crum said. 

National CineMedia shares closed at $2.49 Thursday. 

FROM THEWRAP

Netflix vs. YouTube: Inside the Creator Talent Tug-of-War

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Which Studio Has the Best Fall Movie Slate?

Bill Simmons Under Review After Admitting to Proxy Betting on Podcast: ‘Lesson Learned’

HEARD AROUND

A Hedge-Fund Titan’s Divorce Is Putting Wall Street’s Staggering Wealth on Public View

Gap Pushes Into the Lucrative Accessory Business With New Handbags

Location Data Fuels Mall Giant Simon’s New Pitch to Advertisers

MapQuest Tops App Store Download Charts After Defying Trump on Lake Ontario

The post SiriusXM Gets a Big Wall Street Endorsement appeared first on TheWrap.

While California Attorney General Rob Bonta is pushing Paramount to divest some of the combined company’s networks, is there any demand for them? After all, cord cutting has decimated the cable business and despite their cash flow, cable networks are now among the least desirable media industry assets because they’re all in steady decline.

Private equity may be in the mix, as well as local TV owners. Read on for more details. 

On the other end of the scale, sports franchises seem to be selling like hotcakes, as can be seen in two entries in our Deal Sheet section. 

Read on for this week’s The Ledger column, and to get this as a newsletter in your inbox every Friday, click “newsletters” under your WrapPRO settings.

Who Wants to Buy a Cable Network?

If Paramount does agree to sell some of its cable networks to settle the antitrust case stalling its acquisition of Warner Bros. Discovery, it may struggle to find takers. 

“It’s hard to find a buyer for a depreciating asset,” Scott Robson, senior research analyst in the Kagan Media Research Group at S&P Global Market Intelligence, told The Ledger. 

But that’s not to say there aren’t buyers at all. 

• Cable network fundamentals have been deteriorating, with subscribers cutting the cord and advertising and distribution revenues falling.
• The most-likely buyers of cable networks are private equity investors who can borrow money and pay it off using the networks’ still reliable cash flow.
• When Disney sold its stake in A+E Global Networks, the multiple was only 4 times EBITDA, a number not desirable for a publicly traded business.

Private equity would be the most likely candidate since they’re adept and willing to borrow money and milk the cable networks for a short-term profit. 

Also in the mix are local broadcast TV station owners that have dabbled in national networks. That includes Hearst, which earlier this month bought Disney’s 50% interest in A+E Global Media for $1.2 billion; Nexstar Media Group, which owns the CW and NewsNation; E.W. Scripps, owner of Ion, and Byron Allen’s Allen Media Group, owner of The Weather Channel.

After Comcast announced plans to spin off its cable networks in 2024 and Warner Bros. Discovery similarly planned to spin off its cable networks in 2025, it appeared there would be a big round of cable network M&A activity, with some entity possibly rolling up a bunch of channels to gain scale and leverage against distributors.

Instead, Netflix launched a bid for Warner Bros. Discovery’s streaming and studio assets, but not its cable properties. And Versant, the Comcast spinoff that owns USA Network, SyFy and E!, said it wants to reduce the share of revenue it earns from linear TV to less than 50%.

“It seems like Paramount’s been trying to sell BET Media for about five years, but nothing ever came to fruition,” Robson added.

The Turner networks could fetch a decent price. Bloomberg Intelligence estimates that CNN, TBS and TNT could fetch roughly $8 billion in a sale. Indeed, CNN has long been bandied about as a way for Paramount to get the state AGs to back off. Barry Diller has expressed interest in buying CNN should it be for sale. Former CNN CEO Jeff Zucker, now with RedBird Capital, might also be among the bidders. 

But earlier this month, Paramount CEO David Ellison wrote an op-ed in the New York Times asserting that ownership of CNN was at the heart of the challenges to the merger, and denied any interest in selling it.

Cash Flow

There’s a reason why Paramount is keen to hold on to these assets. Despite falling ratings, CNN and TNT generate the cash flow the company needs to pay down the debt incurred from buying WBD, Robson noted. 

“Are they going to sell off MTV? If there’s an actual buyer there, are they going to sell just the rights to the linear feed, or are they going to sell the entire backlog of content? Because those are two very different business models,” Robson said. “Either way, it’s going to be hard for them to find a buyer.”

Robson notes that cable network ad revenues have been falling. They are declining 10% so far this year compared to 2025. Carriage fee revenues are down 3% as viewers and sponsors have cut the cord and adopted streaming. Pay-TV subscriptions, which peaked at more than 100 million in 2012, is down to about 60 million this year, including streaming MVPDs like YouTube TV. Citing a recent survey of homes that would keep cable to access sports programming, Robson said the number of pay-TV subscribers could fall another 30%. 

Before spinning off most of its cable portfolio, Comcast shuttered several low-rated networks rather than selling them. 

“It’s like deeming them worthless,” Robson said. “So, you could make an argument that some of these are worthless based on how Comcast views it.”

DEAL SHEET

• Arctos, a private equity firm owned by KKR, bought a 10% stake in the Atlanta Falcons of the National Football League in a deal that values the team at $10.6 billion. Private equity firm Arctos is adding a fourth NFL team to its portfolio. Arctos already owns stakes in three other NFL teams: the Los Angeles Chargers, the Buffalo Bills and the Cleveland Browns.
• Investor Marc Shad agreed to buy a controlling stake in the Minnesota Timberwolves and the WNBA Minnesota Lynx from Marc Lore in a deal that values the franchises at $4.5 billion. Lore bought the team last year. Former baseball star Alex Rodriguez, who was a partner with Lore, will remain as part of the new ownership group. 
• Streamer DAZN is acquiring EverPass Media, which holds the commercial rights to NFL Sunday Ticket, as well as live sports from Peacock, Netflix, Paramount and Apple. EverPass was formed by the NFL’s 32 Equity investment unit and RedBird Capital Partners. Terms of the deal were not disclosed.
• WildBrain Ltd. acquired Personality AI, which will create new experiences using WildBrain’s characters including Peppa Pig. WildBrain paid $11 million in cash and $1 million in stock. After a year, WildBrain will pay another $2 million in cash and stock.
• Stability AI raised $76 million in new capital in a Series B fundraising that included Electronic Arts, Sony Music Group, Universal Music Group and Warner Music Group. The company, which builds AI products for professional creatives, has raised $232 million since CEO Prem Akkaraju was appointed in 2024. Individual investors in Stability AI include Sean Parker, Eric Schmidt, James Cameron, Kevin Mayer, Mark Burnett, Patrick Whitesell, Prem Akkaraju, Reuben Brothers, Robert Nelsen, and Vivi Nevo. 
• Puck, the entertainment newsletter operation, said it is in talks with RedBird Capital Partners for an investment that would value the media company at $250 million. The deal would not include shares held by Puck’s founders or journalists. Puck was founded in 2021 and has about 50,000 paying subscribers, according to Reuters.  

WRAP 20 INDEX 

Here’s how the companies in our Wrap 20 Index performed this week. 

FINANCIAL ROUNDUP

The Paramount-WBD Saga (Continued)

The twists just keep coming. Two Republican attorneys general on Tuesday filed a motion with the Supreme Court to prevent an antitrust lawsuit brought by the AGs in a dozen other states from blocking the acquisition of Warner Bros. Discovery by Paramount Skydance. 

In a filing, Brenna Bird of Iowa and Austin Knudsen of Montana said they wanted to stop “politicized antitrust enforcement by a small number of states.” The deal was approved by the Trump administration’s Justice Department.

Their filing came after Bonta, the Democrat who is spearheading the suit, abruptly canceled settlement talks with Paramount that were supposed to kick off Monday. He blamed Paramount for leaking details of a preliminary meeting as evidence that the company hadn’t acted in good faith, although Paramount has denied any involvement in the reports. 

Bonta later told TheWrap in an exclusive interview that he would be ready to restart talks once the leaking stopped. 

Disney Cuts Align with Guidance

Evercore ISI analyst Kutgun Maral said that Disney’s announcement that it was launching a voluntary early retirement offer for executives was a case of the company “delivering on cost guidance it had already given investors.”  

Maral said that by focusing the cuts on leadership roles in its entertainment, ESPN and corporate division, it’s able to cut overhead without sacrificing investment in content, parks staff or the building of cruise ships. The analyst rates Disney stock “outperform,” and has a target price of $144 per share.

The analyst added, however, he was not yet able to quantify how much the plan would lower costs because it is voluntary, but he noted that it would benefit earnings per share growth for fiscal year 2027. Those savings, however, would be offset by near-term reductions in free cash flow because of severance and related charges.

FROM THEWRAP

Paramount Is Promising 30 Films per Year, but What Would That Look Like?

Investment Bankers Eye New Line Cinema, WBD Cable Networks as Paramount Legal Battle Drags On

Disney Signs Content Deal With Dhar Mann Studios, Starting With 20-Episode Order

HEARD AROUND

This Is the Year We Went Back to the Movies

Meta, ByteDance and YouTube Take 94% of a $150 Billion Vertical Video Market

The Final Days of LIV Golf: Unpaid Bills and a Scramble for Cash

The post If Paramount Needs to Sell Networks, Who Would Buy? appeared first on TheWrap.

If you don’t have mega-billions to go out and buy an NBA franchise, you might be in luck. The owner of two marquee New York teams, the Knicks and Rangers, is looking to make it easier to invest in them through two spin-offs.

Analysts say the timing is good. Besides the Knicks finishing a championship season, a change in tax law could make teams less inclined to go or stay public, meaning these opportunities to buy a stake might go away.

Meanwhile, the battle over Paramount’s effort to buy Warner Bros. Discovery sees more twists with Paramount asking the states to backstop its daily ticking fee and another major theater chain throwing its support behind the deal.

Thanks for reading.

THE DEEP DIVE

NBA Champ Knicks Getting a Stock of Their Own

Investors will soon have a simpler way to own a piece of the NBA Champion New York Knicks. The opportunity might not last long, but it could see fans cashing in on the team’s financial success (or just hold a piece of the team they love).

Madison Square Garden Sports, which owns the Knicks and National Hockey League team Rangers, and is controlled by the Dolan family, filed a plan to create two distinct publicly traded companies for each team. 

• Madison Square Garden Sports stock has climbed from $180 in March 2025 to more than $403 this week.
• Based on the agreement earlier this month that values the Lakers at $12.5 billion, the Knicks would be worth $13 billion to $14 billion.
• A coming tax-law change could make it more expensive for sports teams to be part of a public company, which makes this situation potentially rarer down the line.

The MSG spinoff is designed to better capture the value of the Knicks and Rangers. 

Portfolio managers say sports teams are great assets right now. Prices for teams are rising, as illustrated by Bob Iger and Josh Kushner acquiring the Los Angeles Lakers in a deal that values it at $12.5 billion.

“The Lakers sale is an excellent comp for the Knicks,” said Chris Marangi, president and co-CIO of Value at Gabelli Funds. Marangi estimates that the Lakers were valued at 20 times earnings, which would make the Knicks worth $13 billion to $14 billion and the Rangers worth $4 billion to $5 billion. 

MSG Sports shares have risen from $180 a share on March 31, 2025, to more than $403 a share this week, but the market cap is still only about $9.7 billion — below what the Knicks alone would theoretically fetch in a sale.

“The separation of the team should increase their strategic options, and among the strategic options would be a better opportunity to sell minority stakes in one or both teams,” Marangi said.

On the company’s earnings call on Aug. 13, MSG Sports Chief Operating Officer Jamaal Lesane was asked about minority sales when the spinoff is completed, which is expected to happen in October.

“We continue to be confident in the value of our teams. We’re as confident as ever in that respect,” Lesane said. “There continue to be reported transactions in the marketplace that demonstrate that value and scarcity of these assets.”

Alex Michael, senior managing director and global head of sports and entertainment at LionTree, noted that MSG started exploring separating the teams back in February. With the Knicks hoisting a banner when next season starts in the fall, “the timing is almost too good,” he said.

“This is exactly the kind of move that shows how far sports ownership has evolved as an asset class and there’s real logic here. Franchise values have climbed to a point where a single holding company structure can undersell what each team is actually worth on its own. More so, public markets have tended to depress true sports franchise values,” Michael said. “Having the additional clarity as a standalone entity, in addition to the Knicks’ momentum, should lead to a value unlock. It’s a sensible next step for a market that’s maturing, and I expect others are paying attention.”

Taxing Salaries

The chance to invest in a publicly traded sports team may fade over time. Only a handful of sports teams are publicly traded, and an upcoming tax-law change going into effect in 2027 could push those few to go private.

Currently, public companies can write off $1 million of the salaries of each of their top five highest paid officers. When the law changes next year, that cap will expand to five more employees. That’s a big blow to a company that owns professional sports teams, whose payrolls include well-compensated coaches and players like Karl-Anthony Towns, who will earn about $57 million next season.

Seaport Research Partners analyst David Joyce estimated the tax law change would increase the tax hit to the Knicks by $49 million and the Rangers by $14.7 million. Private companies do not have this kind of restriction, since they don’t have to disclose their highest paid employees.

“Unless the tax code is equalized for public vs. private companies before implementation, we think the Sec. 162(M) change could serve as an incentive for a full sale or a go-private transaction,” Joyce said in a research note.

Even if they do go private, that won’t dampen the appetite for investment elsewhere. Gabelli, for instance, owns a significant stake in the MSG companies as well as other publicly traded sports stocks, including the Atlanta Braves, Manchester United and F1. It also offers a sports-centered investment fund, GOLS, or Gabelli Opportunities in Live and Sports.

“We view the theme of sports investing as very much alive and well. Teams have always been very good stores of value, much like fine art and gold,” Marangi said. “That has been reflected by recent sales, and we don’t see that ending anytime soon.”

DEAL SHEET

• Media measurement and research company Cint was taken private in a deal led by private equity firm Triton Partners that valued Cint’s outstanding shares at less than $300 million, according to Axios. When Cint went public five years ago, it was valued at $3 billion. The valuation fell in part because Cint poorly managed the $1.1 billion acquisition of Lucid. Prices for many ad tech companies have fallen over the same period.
• Charter Communications said it closed its $34.5 billion acquisition of Cox Communications and the purchase of Liberty Broadband Corp., making Charter the biggest video and internet provider in the U.S. with 35 million customers. Cox subscribers will be able to get a free mobile line for a year and gain access to Spectrum SportsNet LA, which carries Dodgers baseball games. 
• Peripheral, a startup that turns sports broadcast feeds into 3D interactive replays, raised $8.7 million in seed funding. The financing was led by Deloitte Ventures and Inovia, with Khosla Ventures and Entrepreneurs First also participating. Peripheral, which participated in this year’s NBA Launchpad program, has now raised a total of $12.5 million. 
• EQT, a private equity company based in Sweden, bought a majority stake in the Melbourne Storm rugby team in a deal that values the Storm at $106 million. EQT, which bought the sports training facility and school IMG Academy in 2023, is looking to increase its sports holdings. “EQT brings with it some incredible credentials and the partnership will only be of benefit to our Club — we are proudly ambitious and have hopes for continued growth to keep Melbourne Storm at the top of Australian sport long into the future,” said Matt Tripp, who will remain chairman of the Storm.
• Rule42 Sports Group said it made a “major investment” in the Athletes Unlimited Softball League. Terms were not disclosed. Rule42 is owned by Renee James, a former president of Intel. The league was founded in 2025, backed by Athletes Unlimited, Major League Baseball, the Milwaukee Brewers and its owner Mark Attanasio and Ryan Sanders Baseball. 

WRAP 20 INDEX

Entertainment companies had another strong week as the Wrap 20 Index ticked up for the fourth straight week. 

FINANCIAL ROUNDUP

The Paramount-WBD Saga (Continued)

This week, Paramount asked the state attorneys general whose antitrust suit has stalled Paramount’s plan to acquire Warner Bros. Discovery, to post a $1.88 billion bond. The bond would cover financial damages incurred by Paramount, including the “ticking fee” the studio must pay WBD shareholders for each day after Oct. 1 the agreement doesn’t close.

California Attorney General Rob Bonta, who is leading the antitrust effort, showed little sympathy for Paramount. “They are lying in a bed of their own making,” the AG’s office said. 

A judge will decide on the bond amount — or whether there will be a bond — on Sept. 24.

Also:

• Theater owners have reversed course and are now supporting Paramount’s takeover effort. Trade group Cinema United sent a letter urging that the antitrust suit be settled. Cinemark said it was in favor of the deal, joining AMC and Regal, and cited Paramount’s pledge to release 30 movies a year in theaters.
• Even Los Angeles Mayor Karen Bass has weighed in, urging David Ellison and Bonta to “find common ground.”
• Meanwhile, an analysis by DVL Economics and Los Angeles County’s Department of Economic Opportunity found that the merger could result in the loss of nearly 4,500 film and TV jobs in Los Angeles County over three years.
• A Paramount spokesperson told TheWrap that the report shows that the entertainment industry is “in decline, production is down and jobs are being lost — and lost for good if we don’t act.” A spokesperson for California AG Bonta reiterated that the merger would result in “higher costs, less competition, lower wages, job cuts, and fewer movies and TV shows” if approved.

Watch This Space

Digital out-of-home advertising is one of the industry’s hotter segments and analyst Patrick Sholl of Barrington Research reaffirmed his “outperform” rating for Outfront Media. 

The digital billboard company reported second quarter earnings that topped expectations, raised its guidance and boosted its dividend.

Sholl noted that the company added 50 digital boards in the second quarter and is targeting adding about 125 for the year. Spending by tech, legal and medical marketers pointed to ad revenue growth, as did entertainment and financial buyers of its transit inventory.

“While the growth trajectory for profitability may face a difficult comp in 2027, if ad trends remain supportive, the improving attractiveness of OOH and its ability to sustain advertiser interest are important assets relative to other traditional media,” Sholl said.

Outfront stock closed Thursday down 1.8% to $29.78.

FROM THEWRAP

Breaking Down the Alex Cooper and Unwell Mess

Why Disney+ Is Leaning Harder on Millennial Nostalgia Than Ever

Cinerama Dome Is Just the Start: LA Is Living a Movie Palace Renaissance

HEARD AROUND

Reed Hastings Says He Learned Why Companies Aren’t Families After Laying Off One-Third of Netflix: “You Would Never Lay Off Two of Your Kids”

Small Brands Get Famous on TikTok Shop, but Amazon Is Still King

It’s Never Been More Annoying and Expensive to Be a U.S. Sports Fan

Creators Now Shape AI Recommendations

The post How the Knicks Win on Wall Street appeared first on TheWrap.

Some aggressive investors can’t wait for Lionsgate to surrender to the inevitable. A good home could be found with a bigger studio, or a tech giant could pick it up and add its AI know-how to its production. For now, the studio’s next act has yet to be written.

Meanwhile, venture capital activity slowed in July, according to data from PitchBook, and the Paramount-WBD saga continues to generate gallons of ink in the press.

Thanks for reading.

THE DEEP DIVE

Anson Funds Roars at Lionsgate to Sell Studio

The story of Lionsgate being acquired has had as many sequels as “John Wick.” This week, a new chapter emerged amid reports that Anson Funds, which owns 6.1 million Lionsgate shares, is urging the studio to sell.

With a market cap of $3.5 billion, it would be pretty easy to swallow up. And rumors that someone’s looking to buy it seem to come up every six months.

“Why is it that someone hasn’t already bought Lionsgate?” asked Eric Clark, Portfolio Manager at LOGO ETF, a fund that focuses on consumption, including the experience economy. 

• Lionsgate has a scaled movie and TV studio and is one of the few independent ones left standing. 
• Helped by the hit “Michael,” Lionsgate had a strong quarter. One analyst boosted his revenue forecast for Lionsgate in 2027 but reduced his earnings-per-share expectations.
• Plenty of companies, from rival studios to tech companies, could be a suitor for Lionsgate. One fund manager sees Netflix as the best fit.

While Lionsgate shares did see some movement this summer and spiked at above $16 as the takeover chatter heated up, they’ve largely moved within a tight band. It started the year above $9 and closed at $11.72 on Thursday. 

Sagar Gupta, who leads activism strategy at Anson, wrote a letter to Lionsgate warning that Wall Street thought the studio was “more likely to be an AI casualty than an AI beneficiary.”

The firm noted that Amazon bought MGM and Microsoft bought Activision Blizzard. “Technology and streaming players are already willing to acquire premium IP rather than simply license it,” said the letter, as first reported by Semafor. 

Anson bought into Lionsgate in 2024, before the spinoff, but selling the studio was already in its sights.

Anson declined to comment, but a slideshow presentation made in December 2024 said “As a high-quality pure play of digestible size, we believe Lionsgate is one of the best-positioned public assets for a potential takeout.”

Even after hits like “Michael” boosted Lionsgate’s earnings, Anson still believes its shares are undervalued, said an insider who confirmed the contents of the letter. The firm called for Lionsgate to more effectively use AI to help the studio run more efficiently and boost the value of its inventory, even as many in Hollywood continue to push back against the technology.

“If (Lionsgate) shares do not rerate appropriately following the full separation, we believe the board should consider a sale of the company, along with potential divestitures of unscripted TV and 3 Arts as interim steps to maximize value,” the firm laid out in its presentation.

On Lionsgate’s earnings call last week, CEO Jon Feltheimer said the company’s pure-pay content strategy is working. Asked about M&A, Vice Chairman Michael Burns said, “In spite of what the headline suggests, we haven’t engaged in any substantive conversations.”

Burns added that “given the strength and the breadth of our IP and our franchises, we remain one of the most compelling assets in a rapidly consolidating marketplace. We also recognize that scale matters more than ever in this environment, and that’s precisely why the value of our portfolio only becomes more relevant over time. And given the M&A backdrop, the strength of our assets and our stand-alone operating performance, we believe we have real strategic optionality, and that’s something we’re focusing on every single day.”

As for potential buyers, Anson listed in its presesntation 16 potential acquirers for Lionsgate including Netflix, Google, Paramount Skydance, Comcast NBCUniversal, Disney, Apollo/Legendary, Open AI and Anthropic. 

“Netflix would be the best buyer,” said Clark. By bidding for Warner Bros., Netflix has already tipped its hand, and the streamer is well equipped to create new content from franchises like “John Wick,” “Twilight” and “The Hunger Games.”

“It’s probably absurdly cheap,” said Clark. “I just wonder what is it that keeps it independent.” 

LOGO ETF holds stock in Netflix. It’s other entertainment holdings include Spotify, TKO and Formula One.

DEAL SHEET

• Former Disney CEO Bob Iger and Joshua Kushner led a group that has agreed to buy the Los Angeles Lakers from Mark Walter in a deal that values the NBA team at $12.5 billion, a record for a sports franchise sale. Iger is a fan and at Disney oversaw ESPN, which had a rights deal with the league. “We have immense respect for the leadership and vision of [former Laker owners] Jerry and Jeanie Buss,” Iger and Kushner said. “Our long-term commitment is to build on that foundation, compete at the highest level, and serve this extraordinary team, its fans, and the city of Los Angeles.”
• Ari Emanuel’s events company Mari agreed to acquire Broadway and London theater company ATG Entertainment from Providence Equity Partners. Terms were not disclosed, but the Financial Times reported the deal was worth £4.5 billion or about $6 billion. ATG operates 70 venues and hosts productions including “The Lion King,” “Wicked” and “Harry Potter and the Cursed Child.”  
• Apollo Sports Capital made a $2.6 billion financing deal with New York Yankees’ holding company Yankee Global Enterprises. The agreement is a mix of credit and equity, and the proceeds will be used to grow the franchise and refinance debt. Apollo Sports CEO Al Tylis will join the YGE board. The Steinbrenner family keeps full control of the Yankees, the companies said.
• National CineMedia, an in-theater ad company, agreed to buy Captivate Holdings, which sells digital video advertising in elevators and lobbies, in a deal that values Captivate at $275 million. The deal “allows NCM to leverage its national and local sales organizations, creating cross-sell opportunities; and injects needed growth and enhanced earnings visibility into the legacy biz,” said B. Riley analyst Drew Crum.
• Patrick Whitesell’s WTSL made an investment in Alex Cooper’s Unwell Media Company, that values the “Call Her Daddy” podcaster’s firm at $400 million. “With WTSL’s backing, the company is now also poised to accelerate our media platform’s growth through acquisitions and investments,” Cooper said.

WRAP 20 INDEX

It was a stronger week for the Wrap 20 Index now that we’ve had a chance to digest the quarter’s earnings results.

FUNDING FILE

Venture capital activity in media and entertainment cooled in the heat of July.

According to data from PitchBook, there were 35 deals in the U.S. Entertainment Software, Publishing and Media and Information category worth $119.2 million in July, down from 52 deals worth $582.5 million in June.

A year ago, there were 52 deals worth $412 million.

The biggest deal involved Ursa Space, a satellite intelligence company, which raised $27.9 million in venture growth funding.

Fluxco Media and Information Services, which helps companies locate power transformers, raised $26 million in pre-seed funds. 

In the U.S. Media Companies category, there were 16 deals worth $42.3 million in July, compared to 17 deals worth $420.3 million in June.

A year ago, 29 deals worth $405.4 million happened.

FINANCIAL ROUNDUP

The Paramount-WBD Saga (Continued)

The battle over Paramount Skydance’s bid to acquire Warner Bros. Discovery reached the bargaining stage this week.

Paramount CEO David Ellison put a big chip on the table, threatening to move the company out of California if the lawsuit, led by California Attorney General Rob Bonta, isn’t settled quickly.

With a trial scheduled for March, Paramount is looking to resolve the dispute and close the acquisition or face daily “ticking fees” to WBD of $7 million starting Oct. 1. 

“We would be delighted to engage” in talks “in order to repair the industry, create more jobs, bring more jobs and production back,” Paramount Chief Legal Officer Makan Delrahim said. 

Bonta noted that Paramount is “eager” to settle, and said the states are open to good faith proposals, but “we’re focused on litigation and going to trial for the time being.”

Ellison has contended that the key reason the deal is being held up is political concerns about his company owning CNN. Ellison’s father and bankroller Larry Ellison is close to Trump and has reportedly promised changes at CNN if it is acquired, a charge that Paramount has denied.

Congressman Jamie Raskin (D-Maryland) sent Ellison a letter accusing him of “colluding” with President Trump and urging him to answer questions.

To assuage concerns about political influence on CNN, Paramount has discussed creating an editorial board and other ways of safeguarding its independence, according to the Wall Street Journal. 

“We always remain open to internal improvements to journalistic integrity,” Paramount said in a statement.

FROM THEWRAP

Forbes Fired Top Editor Over Secret $6 Million Payment

Former Disney CEO Bob Chapek Writing Tell-All Memoir

Why Publishers Need Live Events Strategies to Thrive

HEARD AROUND

How Candy Crush Beat the Mobile Game Curse

BDG CEO Bryan Goldberg’s Plan for Media After the Pageview

Roger Federer Is No Longer a Billionaire After Sneaker Brand Shares Slump

This Summer’s Hottest Arm Candy Is a Private Equity Boyfriend

The post Will Lionsgate Be Sold? appeared first on TheWrap.

Whether it’s the state of the on-going Paramount-Warner Bros. Discovery saga or Nexstar’s acquisition of Tegna — both held up in legal limbo — or how media companies are managing the declines in linear TV, where is the smart money headed? 

I talked with top analysts to get the word on the street and offer a cheat sheet on an extremely busy earnings week. 

Thanks for reading.

Jon Lafayette

P.S.: Send your tips and pitches to jon.lafayette@thewrap.com

THE DEEP DIVE

Wall Street’s Take on FCC’s Removal of Broadcast Ownership Cap

The Federal Communication Commission removing the cap on television station ownership will unleash a flurry of deal activity, analysts say. But investors can hit pause before making any moves, with immediate deals unlikely to pop up. 

“I don’t think there would necessarily be a rush, but I think over time TV stations owners will look to sell,” Craig Huber, media analyst at Huber Research Partners, told The Ledger.

That’s because there’s still ongoing legal challenges — including the states taking matters into their own hands — that may temper that urge to merge.

• The FCC eliminated the rule that kept companies from owning TV stations that reach more than 39% of the country.
• More industry consolidation is likely once legal appeals of the ownership cap vote are settled
• Big deals, like Sinclair’s rejected bid to buy Scripps, might be back on the table, and big broadcasters are also likely to try pick off more stations on a market-by-market basis.

“I think it’s likely to get tied up in court,” Huber said. “Someone is going to argue that Congress is the only one who can change the 39% ownership cap.”

Analysts Blair Levin, of Newstreet Research, (left) and Craig Huber of Huber Research Partners

Still, the change will likely have companies at least eyeing each other. It’s not just Nexstar and Tegna, with other larger players like Sinclair having made noise about dealmaking. 

“In the short term, it is mildly good for investors in Sinclair and broadcasters wanting to sell to Sinclair, but everyone knows Carr would approve those deals anyway through the same process he used for Nexstar, so there isn’t any significant change. And as Nexstar shows, states can still raise antitrust issues,” said Blair Levin, policy advisor to New Street Research. 

Broadcast executives cheered the removal of the ownership limits nonetheless. 

Uncertainty Removed

Once it clears legal challenges, “I think it will remove a certain level of uncertainty in future M&A,” said Nexstar CEO Perry Sook on the company’s earnings call Thursday. Sook said he will look at additional stations deals after it is cleared to integrate with Tegna. 

“I think Nexstar would love to do more deals down the road after they get Tegna fully integrated. It’s part of their DNA to do acquisitions,” said Huber.

Sinclair CEO Chris Ripley applauded the FCC’s move during Sinclair’s earnings call Wednesday. 

“I do think the elimination of the cap will make large-scale M&A much easier and less risky, and we’re going to be redoubling our efforts in that area,” Ripley said.

Sinclair last year offered $622 million to buy E.W. Scripps, but Scripps rejected the bid. Huber said he wouldn’t be surprised if Sinclair went after Scripps again. On the earnings call, Ripley said Sinclair was also looking at smaller market-by-market station acquisitions.

The other big station group is Gray Media, but Huber said that it appears to be content as a standalone public company for now. 

There are still a number of smaller station owners. For example, Allen Media Group has put some of its holdings on the block to reduce its debt. Its CEO, Byron Allen, acquired Buzzfeed through his family office just two months ago. 

Huber said that station valuations rose when the FCC started talking about removing the ownership caps, so some of the upside is baked in. The publicly owned broadcasters’ share prices have been flat to down over the past 12 months. 

“Valuations have been impacted by uncertainty about the economy and high oil prices, etc. TV broadcasting stock valuations are not cheap currently, nor should they be, because you would think over time there will be more consolidation,” he said. “There’s going to be proposals between these companies to merge, maybe stock for stock. There’s no extra debt if done stock for stock, and they’ll try to get all the cost synergies.” 

Shares of Nexstar, Gray Media, E.W. Scripps and Sinclair have been largely flat over the past 12 months.

DEAL SHEET

• Nielsen agreed to buy DoubleVerify for $13.60 per share in cash in a deal worth $2.15 billion. The acquisition is designed to help Nielsen move from counting TV viewers to providing intelligence about advertising effectiveness as everything goes digital.
• Disney confirmed it will sell its 50% stake in A+E Global Media to Hearst for $1.2 billion. Hearst already owns half of the programmer. Paul Buccieri will continue as A+E president and chairman after the transaction closes. The closing is expected in September. A+E owns cable channels including A&E Network, History and Lifetime.
• The $55 billion transaction to take video game maker Electronic Arts private closed on Tuesday. The buyers were Saudi Arabia’s Public Investment Fund, private Equity firm Silver Lake and Jared Kushner’s Affinity Partners. The deal is the largest leveraged buyout ever.
• Yakira Capital Management, which describes itself as a long-term shareholder in Barry Diller’s People Inc., issued an open letter urging People Inc. to withdraw its proposed acquisition of the 74% of MGM Resorts it doesn’t own. Bruce Callins, president of Yakira, said he wrote the letter because Diller wouldn’t see him. “Recent investments in Meredith, Care.com and Vimeo have generated mixed results, consumed substantial capital, and have yet to demonstrate returns commensurate with the risks undertaken,” he said, advocating for share buybacks instead.

WRAP 20 INDEX 

Here’s how the companies in our Wrap 20 Index performed this week. 

THE PARAMOUNT-WBD SAGA 

• Paramount Skydance CEO David Ellison addressed the delay in completing Paramount’s acquisition of Warner Bros. Discovery during Paramount’s earnings call and in an op-ed essay in the New York Times. In the Times, Ellison said that while the deal has been enjoined by antitrust suits, the more important issue “is whether I can be trusted as a steward of Warner’s CNN.”  He said, “I do not aspire to lead these companies to bend their newsrooms to my views.” Critics, including our own Sharon Waxman, noted his failure to mention Bari Weiss, the columnist-turned-editor in chief of CBS News, who has so far fallen flat in her attempt to shake up the storied news organization.
• On Paramount’s call, Ellison touted the 65 jurisdictions that have cleared the deal, with U.K.’s Competition and Markets Authority giving its green light on Thursday.
• The judge overseeing the U.S. antitrust suit said the trial would start March 2, 2027, later than the November date Paramount had proposed. The comapny must pay a “ticking fee” of about $7 million for every day after Sept. 30 that the deal has not closed.
• For the second quarter, Paramount reported slightly higher-than-expected earnings and revenue. It also raised its guidance for full-year earnings before interest, taxes, depreciation and amortization to $3.9 billion from $3.8 billion. Profits from streaming jumped 44% to $366 million as revenue rose 9%. The streaming gains offset linear declines.
• On WBDs earning call, CEO David Zaslav said he was confident the deal would close. Despite the distractions caused by the merger delay, “we’ve been trying to drive the value of the company to deliver to PSky and to David the best company possible,” he said. 
• For the quarter, WBD profits fell 91% to $149 million as revenue dropped 11%. The company’s streaming profits soared 75% to $512 million as revenue rose 10% to $3.08 billion, but overall results were weighed by declines in its linear and studio businesses. 

EARNINGS HIGHLIGHTS

Disney reported higher-than-expected adjusted earnings per share for its fiscal third quarter, but revenue was below Wall Street forecasts.

• Disney+ and Hulu’s combined profit more than doubled to $712 million and entertainment streaming revenue grew 11% to $5.5 billion.
• Disney also announced that it sold out all of the advertising inventory in Super Bowl LXI, which will appear on ABC and ESPN in February. 
• Barclays analyst Kannan Venkateshwar: “Disney’s valuation premium historically has followed from its content performance and therefore, is contingent on execution improvement in content. Despite one of the biggest slates in years, the company’s box office performance has lagged expectations and unless this improves, with corresponding benefits to other parts of the company, Disney’s valuation may struggle to get back its historical premium.” 

Fox reported higher-than-expected earnings per share of $1.61 for the quarter as revenues rose 28% to $4.21 billion.

• The revenue gains were driven by ad sales during the World Cup, cable news and Tubi. 

Fubo said its net loss shrank to $25.7 million in its fiscal third quarter from $38 million a year ago, as revenue rose to $1.48 billion from $1.07 billion a year ago, driven primarily by the NBA Finals and World Cup.

• Its North American paid subscriber base grew 2% to 5.8 million from a year ago, exceeding expectations and the company added 7,000 subscribers in its Rest of World segment for a total of 356,000.
• On her first earnings call as CEO of Fubo, former Disney exec Alisa Bowen was asked if Fubo and Hulu + Live TV would eventually merge into one offering, she answered that they have “very distinct and valuable subscriber bases” in sports and entertainment, respectively. 

Spotify reported a profit of €545 million, as revenue grew 14% to €4.8 billion as it topped the 300 million global subscriber mark.

• Shares of the streaming company dropped 5% because it said it expected slower growth in the third quarter.

The New York Times Co. shares slid when it said it expected third-quarter subscription revenue to slow to 9% to 11%, after growing 11.2% in the second quarter.

• Second-quarter net income fell 10% to $96.3 million, despite an 11.2% increase in revenues to $762.5 million. Net income and revenue exceeded Wall Street forecasts.

Versant reported second-quarter net income of $211 million, down 30% from $302 million a year earlier, as revenue fell 3.8% to $1.64 billion. 

• The company’s shares rose as the company increased its full-year outlook, saying it expects revenue of $6.2 billion to $6.4 billion and adjusted EBITDA of $1.9 billion to $2.05 billion. 

FROM THEWRAP

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The post The Ledger: Wall Street’s Take on the Broadcast Cap Removal appeared first on TheWrap.

But headlines surrounding Casey Wasserman’s sale of his stake in The Team (née Wasserman until he screwed up with Jeffrey Epstein’s girlfriend) highlighted the fact that investors see agencies as a low-risk, high-reward way to participate in the entertainment business.

Below, experts explain why agencies are a hot commodity right now, and how those investments might shake out in the future.

It’s also been a busy week on the deal front with FIFA making headlines fresh off of the World Cup and media mogul Barry Diller contemplating his next move. 

Thanks for reading this week’s The Ledger column, and if you want this newsletter directly to your inbox every Friday morning, check your WrapPRO newsletter settings.

THE DEEP DIVE

Talent Agencies Are Hot

Investing in Hollywood’s dealmakers has itself been a boffo deal for private equity firms. 

While they aren’t publicly traded, nearly all of the major talent agencies are controlled by investment companies. Why are they good bets?

• Talent agencies provide investors with healthy cash flow and less downside risk than investing in specific projects or studios.
• Valuations for talent agencies have risen as they’ve expanded their involvement in sports.
• But at some point, some agencies might go private as their current owners look to unwind their investments.

“Investing in talent agencies was a more diversified, downside-protected way of investing behind the growing value of content and talent,” Brian Cassidy, president and head of media investing at Crestview Partners, told The Ledger. 

Cassidy should know. His firm owns Gersh and previously owned ICM before selling it to CAA.

“The only other way to get exposure from a private equity perspective was to invest in movies or a production company, which comes with its own set of risks,” he added. “Today, the investment thesis is more about getting exposure to the growth trends in sports.”

Agencies also have strategic value. Their industry connections help investment companies spot trends that could lead to other investment opportunities in the entertainment space.

The value of talent agencies has been rising as they get more involved in the thriving sports business, negotiating lucrative media deals and signing marketing deals with sponsors.

“Talent agencies are one of the most interesting plays in the creator economy and sports right now,” said Alex Michael, senior managing director, global head of sports and entertainment, at LionTree. “They give investors levered exposure to athlete and influencer monetization and the growth in sports rights, without the price tag or scarcity of owning a team outright.”

One financial source said that the earnings before interest, taxes, depreciation and amortization multiples for talent agencies have increased from the low double digits to the mid-teens.

The value of talent agencies moved into the spotlight when agent Casey Wasserman showed up in the Epstein files. The controversy ultimately forced Wasserman to sell his stake in what’s now called The Team to Providence Equity Partners, which already owns 60% of the agency. The deal is set to close in the second half of the year. Financial terms were not disclosed, though Puck previously reported an estimated valuation of $3.4 billion — slightly higher than the roughly $3 billion valuation floated when Wasserman first began exploring a sale back in February.

Notably, Providence wasn’t the only one eyeing that stake. 

“The robust interest in the company throughout this process only reinforced our belief in the business and enthusiasm for its next phase of growth,” Davis Noell, Providence’s co-head of North America, said in announcing the deal. “Our additional investment also reflects our conviction in the long-term growth in demand for in-person experiences across sports, music, and entertainment and the brands, talent and partnerships that bring those moments to life,” he added. 

There are only a handful of major agencies, and investment firms have scooped them up. 

• Endeavor Group Holdings, which owns WME, was taken private by Silver Lake in a $25 billion deal. 
• A minority stake in CAA was sold by TPG to the French holding company Artemis for $7 billion.
• Excel Sports Management sold a majority stake to Goldman Sachs Alternatives for about $1 billion.
• A stake in United Talent Agency was bought by EQT Private Equity from Investcorp and the Public Sector Pension Investment Board. 

The relatively short list of major agencies and the difficulty of starting a new one with global clout only increases the price investors are willing to pay.

Private equity has helped the agencies expand globally.

When Crestview invested in Gersh in 2023, it issued equity to key agents and employees to keep them invested in the firm. During its investment, Crestview funded a series of acquisitions that built Gersh’s lucrative sports business and grew its digital and brands businesses.

While the investments in agencies have been successful (despite downturns during COVID and the Hollywood union strikes), eventually investment companies will look to cash out. In some cases, that could mean going public.

“I think you will probably see another agency go public in the next few years, but I think it’s got to be of scale,” said Crestview’s Cassidy. “It would take a firm to have EBITDA of at least $300 million for an IPO to make sense,” he said.

“Also likely are more deals in which one investment company sells a stake in an agency to another investment company,” he said.

DEAL SHEET

• Disney plans to sell its 50% stake in AMC Networks to Hearst, which owns the other half, in a $1 billion all-cash deal.  The deal is expected to be formally announced next week when Disney reports its quarterly earnings.
• FIFA plans to raise $4.2 billion by selling as much as a 21% stake in a new company, FIFA Forward Enterprise, that will run the World Cup and other commercial operations for the organization. Joshua Kushner’s Thrive Eternal fund is expected to be the lead investor group, while J.P. Morgan is FIFA’s chief advisor on the project. European nations opposed the plan and threatened to boycott the World Cup if stakes in the tournament are sold. Concacaf, which represents North American, Central American and Caribbean nations, is reportedly taking a similar tack, according to The Athletic.
• Barry Diller’s People Inc. is considering selling “The Daily Beast,” TheWrap has learned. The site has reportedly turned profitable under Ben Sherwood and Joanna Coles, according to Axios. Diller wants to focus People on core assets and is looking to buy the roughly 74% stake in MGM Resorts International it doesn’t already own and take the company private.
• Banijay on Wednesday denied reports that it is considering taking over Lionsgate. Instead, the French entertainment company is focusing on integrating other recent acquisitions and reducing debt, according to a report from Reuters. “We are not on a shopping spree,” said CEO François Riahi.
• Eventual, a news and analysis platform, is launching in partnership with Polymarket. The new media company will feature top traders in the prediction market. Founded by podcast producer and writer Alex Keeney, Eventual is backed by a seed round of financing with LightShed Ventures, Riverside Ventures, Juniper Ventures and BDG Media founder Bryan Goldberg among the participants. Polymarket will serve as its launch sponsor and exclusive data partner. 
• Bloomberg said its founder Michael Bloomberg has no plans to sell the company after Semafor published a report that Bloomberg executives talked with investment bankers about a possible IPO or another strategic transaction. Semafor reported that the talks with the bankers were in an early phase and might not result in a deal.

WRAP 20 INDEX

Earnings gave the Wrap 20 Index some slight gains, although the index is still down sharply for the year.

EARNINGS HIGHLIGHTS

• AMC Global Media reported a net loss of $21.9 million, or 51 cents a share, for the second quarter, but raised its revenue and operating income guidance for the full year after reaching a $500 million five-year deal to license all of its “Walking Dead” series to Netflix. 
• Cinemark took in $1 billion in worldwide revenue for the first time in its history during the second quarter, and CEO Sean Gamble said the momentum will continue with “The Odyssey” and the launch of “Spider-Man: Brand New Day.”
• Amazon reported that net sales in the subscription services segment, which includes Amazon Prime memberships, as well as digital video, audiobook, digital music and e-book subscriptions, rose 12% to $13.73 billion. Advertising services revenue jumped 16% to $19.81 billion.
• Apple said revenue for its services businesses, including Apple TV, Apple Music, iCloud and the App Store, rose 12% in the second quarter, hitting $30.74 billion. iPhone sales soared 22% to $54.3 billion. 

FINANCIAL ROUNDUP

Inside Outside 

High prices, including the price of gas, are putting pressure on out-of-home entertainment, which lately has been one of the big winners for investors in showbiz.

After Comcast’s warning that attendance at its Universal Orlando theme park was being impacted, analyst Robert Fishman of MoffettNathanson decided to look at how exposed the entertainment companies he covers are if elevated costs cause consumers to scale back.

“In our view, discretionary, higher-ticket, out-of-home spending (concerts, theme parks) is relatively more exposed than theatrical or low-cost in-home entertainment,” he said in a note.

Among specific companies, Live Nation and Cinemark were most vulnerable, with nearly all of their revenue coming from out-of-home entertainment. With their theme parks, 39% of NBCUniversal’s revenue and 37% of Disney’s comes from out of home. Only 28% of TKO’s revenues come from its live events. For Warner Bros. Discovery and Paramount, out-of-home represents only a single-digit share of revenues.

Across his coverage universe, Fishman still sees out-of-home revenue up 6% to $87 billion through 2027 despite the near-term pressure.

The Paramount-WBD Saga (Continued)

After agreeing to delay the close of the acquisition of Warner Bros. Discovery, Paramount CEO David Ellison this week sent a memo to staffers saying he expected the transaction to be completed. “I know this additional uncertainty has been challenging, and I want to thank you for your continued patience, commitment and collective contributions,” Ellison wrote, signing off by saying, “Let’s go!”

The delay in closing the deal led Seaport Research analyst David Joyce to downgrade Warner Bros. Discovery stock to “neutral” from “buy.”

Joyce noted that while the legal machinations work their way through the courts, “integration processes between PSKY and WBD are being halted which means synergy realization could take longer.”

He added that “Supergirl,” WBD’s big summer release, underperformed and while the advertising market has been strong, WBD hasn’t had any major sports events on its networks this summer.

Joyce cut his second-quarter earnings estimate by $236 million to $9.07 billion and adjusted earnings before interest, taxes, depreciation and amortization by $219 million to $1.83 billion.

FROM THEWRAP

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The post Why Talent Agencies Are Hot With Investors appeared first on TheWrap.

Picking hits can be a risky game, but based on his recent track record, Nolan may prove to be a unicorn: someone you can make a big bet on and be reasonably sure you can get a return. But more importantly, the success of the film has investors bullish about the broader box office in the second half — and how that benefits players in the industry. 

“I think this is a powerful moment,” James Lindsay, managing director at investment bank LionTree, told The Ledger. “The value of storytelling is up again. You can back a good director. That’s the bet they made.” 

Other potential blockbusters didn’t pay off in the second quarter, with “Moana” and “Disclosure Day” underperforming. But the success of “The Odyssey” will keep moviegoers in theaters.

Meanwhile, one analyst sees good reasons why Netflix’s falling stock may be a buy, and the Paramount-Warner Bros. Discovery takeover saga continued. 

Thanks for reading.

Jon Lafayette

P.S.: Send your tips and pitches to jon.lafayette@thewrap.com

THE DEEP DIVE

Is the ‘The Oydssey’ a Blip or Sign of Things to Come?

Christopher Nolan’s smash hit “The Odyssey” has Wall Street convinced the movie business will continue to generate higher revenues and rising stock prices.

“We’re seeing content, particularly premium film, continue to perform, and I think that is going to start to restore confidence to the major studios,” said LionTree’s Lindsay. “We think capital is going to flow back into the creative industry.” 

Lindsay expects a wave of merger and acquisition activity driven by a desire to scale up production, bolster IP and ensure they’re capable of putting out more tentpole films. Individual investors also might find investing in films more attractive. 

• “The Odyssey” generated $124.5 million in domestic box office and $264 million globally in its opening weekend, the most for any live-action film this year. 
• Analyst Robert Fishman of MoffettNathanson increased his estimate for full-year box office to $9.6 billion. 
• The success of “The Odyssey” might be the beginning of a trend as studios take bigger swings knowing that the audience will show up for hits.
• Exhibitors are benefiting from a tentpole hit, especially when they drive moviegoers to pbuy tickets to premium, large format showings.

In the longer term, the cost of producing films, even those on the scale of “The Odyssey,” will come down, thanks in part to AI. “My optimistic lens on it is that the costs coming down actually allows people to take more risk and be more creative. You can experiment a little bit more,” Lindsay said.

Robert Fishman, an analyst at MoffettNathanson, said big-budget films like Nolan’s “highlight studios’ commitment to theatrical, which should lead to a stronger supply side to meet audience demand.”

Asked if “The Odyssey’s” strong showing was a blip or sign of a future box office bonanza, Drew Crum, an analyst for B. Riley Securities, told TheWrap he wasn’t certain. 

“I wonder if we’d be having a different conversation if it were not for ‘Obsession’ and ‘Backrooms,’” he said. 

Those low-budget films were the difference between the second-quarter domestic box office being up 7% and down 2% so far this year.

In a note, Crum said that the second-half domestic box office had gotten off to a slow start with “Supergirl,” “Minions & Monsters” and “Moana” disappointing (competition from the World Cup didn’t help). Crum cut his forecast for the third-quarter box office to $2.55 billion from $2.7 billion, although the revised figure still reflects an 8% increase from a year ago. 

Spider-Man Bump

Crum is bullish that upcoming films like “Spider-Man: Brand New Day” could continue to fill seats in large-format venues. 

B. Riley is neutral on AMC with a $2.25 price target and has a buy recommendation for Imax with a $48 price target.

Fishman also expects big ticket films will continue to boost the industry in the second half of the year. “We believe the home runs are set to continue next year,” he added. “In addition, the outperformance of non-franchise films plus YouTube-to-big screen breakouts reinforces our optimism in the structural momentum behind the box office more broadly.”

Despite noise around some films that didn’t do as well as expected, Fishman has increased his estimate for full-year box office to $9.6 billion.

Fishman has a “buy” recommendation on Cinemark Holdings, with a $34 target price.

EARNINGS

The opening of “The Odyssey” came on the heels of a strong second quarter at the box office. Earlier this week, AMC Entertainment reported that its second quarter was the best in the company’s 106-year history, with record revenues and earnings before interest, taxes, depreciation and amortization.

“What a quarter, what a quarter, what a quarter,” CEO Adam Aron enthused on AMC’s earnings call with analysts. 

Big movies like “The Odyssey” generate a premium as viewers opt for large screen formats including Imax. At AMC, large formats represent 8% of its screen count, but last weekend they generated 50% of its total gross ticket sales, Aron said. He added that AMC could “affordably increase” its number of large-format auditoriums by 100 to 250 over the next two to four years.

“We believe that movie theaters will enjoy in the full 12 months of 2026, their strongest yet post-pandemic year at both the domestic box office and at the global box office,” he said.

Imax reported better-than-expected second-quarter revenue and second-quarter earnings on Thursday. After “The Odyssey’s” opening weekend, Imax saw record sales of $22 million for Monday and Tuesday, and $60 million in presales for future showings. Those numbers are likely to make analysts boost their revenue estimates for the third quarter.

Box office returns from “The Odyssey” aren’t reflected in second-quarter results, since it premiered this weekend. Those ticket sales will show up in  third-quarter revenue.

Other earnings

• Peacock finally turned its first profit as Comcast prepares its NBCUniversal split
• Alphabet’s AI costs keep spiraling higher

DEAL SHEET

• Film Services International agreed to acquire Media Guarantors from insurance broker CAC Group and merge it with its Film Finances unit in a move that consolidates the global completion bond business for independent films. Financial terms were not disclosed. Media Guarantors founder Fred Milstein will be CEO of the combined companies. 
• Primordial Soup, the AI-based studio venture led by director Darren Aronofsky, plans to raise $15 million in new equity according to a  Securities and Exchange Commission filing. The director of films including last year’s “Caught Stealing” and his producing partner Dylan Golden are listed as executive officers. The company also disclosed it has already sold over $11 million in equity since July 1. The filing said that the studio was looking to hire people for several positions. 
• Netflix paid $587 million for InterPositive, Ben Affleck’s AI startup, according to an SEC filing. The cash transaction was announced in March.

WRAP 20 INDEX

Here’s how the companies in our Wrap 20 Index performed this week. 

FINANCIAL ROUNDUP

Netflix and Sell?

After releasing second-quarter earnings last week, Netflix shares continued to fall. The streamer’s stock has plunged from a 52-week high of $126.71 in September to under $70 this week. At this price, Robert Fishman of MoffettNathanson sees the stock as a buy, with a target price of $100.

“Investor focus around growth in viewing hours remains, but Netflix continues to prove revenue growth is not directly correlated with engagement,” Fishman said in a new report. 

Fishman said that there is evidence that Netflix’s focus on quality, quantity and variety is paying off.

• Netflix garnered 4.4 billion hours viewed across its portfolio of Emmy-nominated series this season, a 10% increase vs. the first half of 2025 and representing a 4.5% share of total hours viewed. 
•  Netflix keeps moving further into live programming. The World Baseball Classic (exclusively on Netflix in Japan), “The Roast of Kevin Hart” and WWE events drove only 0.4% of total viewership in the first half; yet he expects flagship live events like additional NFL games in the second half to accelerate advertising and serve as a meaningful subscriber acquisition tool. 
• Netflix’s push into creator content is fully underway. Although much of the viewership for this content is not broken out (video podcasts are included in “other”), new creators’ titles are starting to gain momentum. 

The Paramount-WBD Saga (Continued) 

European Union regulators approved Paramount’s acquisition of Warner Bros. Discovery after Paramount said it would pull out of its film distribution joint venture with Universal. It also made other commitments related to theatrical film distribution in the region. 

But in the U.K., the Culture Secretary has said she is “minded to intervene” in the deal, and in the U.S., attorneys general from 12 states have filed an antitrust suit and won a 14-day temporary restraining order barring the companies from closing the transaction (which was extended another two weeks on Thursday). Paramount asked the judge in the case to hold a three-day evidentiary hearing in August before a decision is made on a longer prelimiary injunction. 

Time is of the essence for Paramount. If the deal doesn’t close by September 30, Paramount has agreed to pay WBD stockholders a 25 cents per share per share “ticking fee,” which adds up to about $650 million per quarter.

FROM THEWRAP

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The post Do Investors See an ‘Odyssey’ Bump? appeared first on TheWrap.

It got its start as a collection of cable networks jettisoned from Comcast at the start of the year, but it’s moved quickly to introduce itself to investors by quietly acquiring businesses that are decidedly not cable related. 

Versant is hardly the only one busy in the M&A arena. Companies are potentially eyeing Lionsgate, the FCC is taking steps to lift ownership caps on broadcasters and we have the latest developments in the Paramount-Warner Bros. Discovery saga. We also have VC investing data from PitchDeck, which saw investors place wagers on microdramas and more AI startups in June.

Thanks for reading.

THE DEEP DIVE

Versant On a Buying Spree With Cable Cash

Versant Media Group, the cable network company that was spun off from Comcast in January, has been on an M&A binge, buying or selling five companies in the past few months. 

While cord-cutting has reduced the value of cable networks by shrinking their advertising and distribution revenue, David Pietrycha, Versant’s chief revenue and business officer, told The Ledger that the company likes the networks and that their cash flow helps fund the acquisitions that will make it grow.

• Versant is primarily looking to acquire companies that fit with its four main business verticals.
• The company has been able to fund acquisitions with cash on hand or generated by operations. But it is willing to make a transformative deal that would require a bigger check.
• Buying more cable networks is not on Versant’s radar right now. But a network in the food category could be tasty.

Here’s a rundown of the deals:

• In December, Versant acquired INDY Cinema, a cinema operating system now called Fandango1.
• In January, it acquired Free TV Networks, which operates free ad-supported streaming networks.
• In April, it bought StockStory, an AI stock picker.
• In May, it also sold Sports Engine, a tech company specializing in youth sports.
• Last week, it announced its biggest deal, the $530 million purchase of Full Swing, which makes sophisticated golf simulators.

What’s next? Pietrycha said Versant isn’t close to anything right now.

“We want to do deals that generate strong shareholder returns, and we can’t guarantee that those are always going to be sitting there ready for us,” he said. 

Versant’s goal is to reduce its dependence on pay TV revenues and grow non-pay-TV revenues to 30% in the short term and 50% in the long term.

Buying more businesses is the quickest way to get that done. “We will have to do more M&A to be successful in moving toward that goal,” he said. 

Versant focuses on four key verticals: business news and personal finance, built around CNBC; political news opinion, radiating from MS NOW (formerly MSNBC); golf with the Golf Channel; and sports and genre entertainment with USA Network, Syfy and other cable networks. As part of its spinoff from Comcast, Versant also started off with several digital businesses, including GolfPass and GolfNow and movie-related operations Fandango and Rotten Tomatoes.

Through acquisition and organic product growth, Peitrycha said the goal is to “create more depth in the verticals, get more of our fans’ time and a bigger share of their wallets.”

The best example of what Versant is trying to accomplish is in its golf business, where more than 50% of its revenue comes from operations other than the Golf Channel, Pietrycha said. 

The Full Swing business fits with that goal. It’s not a media business, but it will benefit from the company’s relationships with golf courses and promotion on the Golf Channel. 

Analyst David Joyce of Seaport Research Partners likes Versant’s plan to evolve enough to give it a “Buy” rating with a $46 price target.

“They are leveraging declining Linear Network cash flows in focused genres into an Experiential genre engagement expansion strategy, with the Full Swing acquisition adding to their linear Golf Channel, leading golf tournament media rights, GolfPass instructional subscription & play benefits platform, and GolfNow transactional service,” Joyce said in a research note.

Joyce estimates Full Swing gives Versant $144 million in revenue and $35 million in earnings before interest, taxes, depreciation and amortization in 2027. After that, he expects Full Swing to grow at a 4% clip annually.

Pietrycha said the Full Swing deal is big enough to move the needle for Versant. “We want to make sure that we’re not spending a lot of time and energy and capital on something that, in success, doesn’t really move our metrics,” he said.

Versant is looking at companies that would fit with its verticals, and it knows most of those businesses and the people that run them.

Pietrycha opened the door to bigger deals in the future, perhaps one that vaults the company into a new vertical.

“There will be a point that something might come along that’s more transformative and requires a bigger check,” he said. 

Appetite for Cable

When the spinoff was announced, some analysts thought Versant might want to buy more cable networks, boosting its scale with advertisers and distributors. Joyce, however, said buying cable networks would make it harder for Versant to achieve its goal of having 30% of its revenue from non-pay-TV sources.

“I wouldn’t rule out anything. It’s not what we’re focused on right now,” Pietrycha said. But he noted that the company might want to get into the food category. “There are networks that focus on that. Now they’re not for sale right now, and we’re not evaluating them, but that could be interesting.” 

DEAL SHEET

• FCC Chairman Brendan Carr’s announcement that the commission will vote to remove the cap on TV station ownership next month sent broadcast stocks higher on Wednesday. Without the caps, some large station owners might be in play as takeover targets. E.W. Scripps stock jumped 10% to $3.09 a share Wednesday. The company recently resisted a takeover offer from Sinclair. Sinclair shares rose 4% to $14.36. Gray Media’s shares were up 6.6% to $4.06. Nexstar, which is in a legal battle with the states over its acquisition of Tegna, rose 4.4% to $183.20. The stocks held onto most of those gains Thursday, with Scripps up another 1.3% to close at $3.13 and Nexstar up 1.2%, closing at $185.26. Gray was off 2 cents at $4.04 as was Sinclair, which closed at $27.29. 
• A group led by the Khosla family agreed to buy the NFL Champion Seattle Seahawks from the Paul Allen Estate for $9.61 billion, a record price for a franchise. The family is involved with companies including Sun Microsystems and Curai. Neeru Khosla, an educator and entrepreneur, would become the first minority woman to have control of an NFL team. The Khoslas will have to sell their minority interest in the San Francisco 49ers, per league rules.
• James Murdoch invested about $120 million in SpaceX, Elon Musk’s rocket company, before it went public. After the biggest IPO in finance history, Murdoch’s holdings blew up to be worth $7.5 billion, according to Fortune. Shares of SpaceX, however, are now below their IPO price. 
• Letterboxd is in sale talks with companies including Sony Pictures Entertainment, Netflix, Paramount, RedBird, TPG, plus Reddit co-creator Alexis Ohanian. Canadian holding company Tiny controls a 60% stake in the company, with founders Matthew Buchanan and Karl von Randow owning the rest. Here’s TheWrap’s breakdown of why it’s become such a hot acquisition target.

WRAP 20 INDEX

Here’s how the companies in our Wrap 20 Index performed this week. 

FUNDING FILE

Venture capital activity in the media category in June dropped to $12.8 million from $205.5 million in May, according to data from PitchBook. There were 14 deals in June, down from 30 in May.

A year ago in June, there were 14 deals worth $43.1 million.

The biggest deal saw Idilio.TV, a microdrama streaming platform, raise $5 million in pre-seed financing from investors including Accelerator Ventures, Andreessen Horowitz, Endurance Capital, MBA Venture and others. Notably, one of the other investors is WndrCo, co-founded by Jeffrey Katzenberg, who famously got into short form content too early with his ill-fated Quibi startup.

VC activity in the U.S. entertainment software, publishing and media and information category rose to $1 billion in June thanks largely to two big AI bets. That figure is up dramatically from $98.8 million in May, according to PitchBook. There were 51 deals done in June, compared to 35 in May. 

A year ago, there were 49 deals worth $287.4 million.

In the biggest deal, Suna, a company that lets users create music and songs using AI, raised $400 million in a later stage VC raise that valued the company at $5.4 billion. Participants included Alkeon Capital Management, BOND Capital, Menlo Ventures, Schroders Capital, Union Square Ventures and others. 

Another large deal saw AlphaSense, which makes software that helps users search and analyze financial documents and data, raise $350 million in venture growth funding that valued the company at $7.5 billion. You guessed it: It’s also an AI venture. Investors included Accenture Ventures (Manish Sharma), DE Shaw Ventures, Goldman Sachs Asset Management, Viking Global Investors and others.

FINANCIAL ROUNDUP

Lionsgate Buyout Talk

Lionsgate stock jumped after a Reuters report that the Bollore Group of France was interested in taking over the studio. The report noted that Banijay Group had also considered a bid. 

On June 30, B. Riley Securities initiated coverage of Lionsgate, noting that the company was a potential takeover target, but gave it a Neutral rating with a target price of $17 a share. “Lionsgate has rallied 131% following the company’s separation from Starz and, more recently on takeout speculation.” 

Lionsgate’s movie business recently had a hit with “Michael” and analyst Drew Crum said he expects its TV business to improve, but the company’s $1.9 billion in debt “is a near-term limiting factor.”

Lionsgate stock traded at $13.30 prior to the takeover report and peaked at $14.65 on Wednesday before falling back. The shares closed Thursday at $13.62.

The Paramount-WBD Saga (Continued)

The clock is ticking on Paramount’s $110 billion acquisition of Warner Bros. Discovery. A series of legal machinations aimed at stopping the deal make it unlikely the Ellisons will be able to close the deal by the July date they were hoping for or the September timeframe announced publicly. If the closing is pushed past Sept. 30, Paramount will have to pay WBD shareholders a 25 cent-per-share ticking fee for every quarter the deal until the deal is done.

Here’s the legal brief:

• On Monday, attorneys general from 12 states filed a suit in the Northern California district court to halt the deal on antitrust grounds. The AGs also sought a temporary restraining order preventing the deal from closing while the suit is litigated. By itself the TRO would delay the deal by 14 days, although it could be extended as the states seek a longer term preliminary injunction.
• An earlier consumer suit brought by Paramount+ subscribers was formally linked with the AGs lawsuit. 
• On Tuesday, the Writers Guild of America filed a suit in the Northern District of California. They say the deal would hurt them by reducing how many buyers there are for TV shows and movie projects. 
• On Wednesday, Paramount filed an opposition brief to the states’ TRO, calling it “one of the weakest” in modern history
• Across the pond, Paramount has offered concessions to obtain approval from the European Union regulators reviewing the transaction, with a green light potentially coming next week.

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