Shari Redstone's investment banker has made some unusual moves as it explores a possible sale of its Paramount Media empire. And that's fueling even more gossip surrounding the high-profile trade negotiations.
Last May, National Amusements, the holding company that controls 10% of the stock and 80% of the voting stock of Paramount Global, owner of CBS and cable networks such as Comedy Central, Nickelodeon and MTV, Received a $125 million preferred stock investment from the United States. BDT and MSD Capital Partners.
“BDT” stands for Byron David Trott, a former Goldman Sachs executive who was long best known as Warren Buffett's banker. (More on this later.)
Trott is also advising Redstone about Paramount's options, sources said.
Financial sources said it's worth noting that at Goldman, Mr. Trott would not normally be allowed to trade preferred stocks with interest rates of 7.75%.
That's because Goldman, like many financial firms, sees the potential for conflicts of interest in providing advice to clients while also investing in them.
“This is like putting a fox in a chicken coop,” opined one person close to the situation.
A person familiar with the situation said Mr. Trott's investment (recently increased by an additional $25 million) comes on the heels of Paramount cutting its dividend and is simply protecting Redstone from the threat of a liquidity crisis. He argues that this is the case.
The BDT preferred stock matures in 2028 or sooner, depending on certain events in the contract, according to a Standard & Poor's credit report.
Nevertheless, the big question on Wall Street now is what exactly Mr. Trott's profits are.
One of the key figures in the room is Mr. Trott's longtime client Warren Buffett, who also happens to be Paramount's largest shareholder, although it's not clear if he's a current client.
Buffett's 15% stake has declined by about 60% since he started accumulating it in early 2022.
According to well-informed sources, Buffett began accumulating stock shortly after Redstone hired Trott as a banker.
“She and Byron Trott probably don't have very comfortable conversations,” added a source close to the situation.
A year later, on May 6 of last year, a few weeks before Mr. Trott bought National Amusements, Mr. Buffett spoke about Paramount at Berkshire Hathaway's annual meeting and admitted he was not impressed.
“It's not good news no matter which company cuts its dividend,” Buffett said.
“The film industry is a tough business,” added the late vice chairman Charlie Munger.
As The Post exclusively reported last week, Redstone launched an auction for National Amusement and sent the acquiring company a non-disclosure agreement before distributing the company's financial reports.
However, two sources close to the process insist that Redstone is simply “exploring its options” and has no determination to unload the assets.
Elsewhere, Skydance Media (the “Top Gun: Maverick'' movie studio run by Larry Ellison's son David) first considered buying National Amusements this summer, people said.
Skydance's main backer is Jerry Cardinal, a dealmaker at Redbird Capital. He also happens to be a former Goldman banker who worked with Mr. Trott and briefly worked at BDT.
Last month, Paramount Global CEO Bob Bakish met with Warner Bros. Discovery CEO David Zaslav about a possible merger.
Sources say the news sparked unsubstantiated rumors that it happened after Shari suspected Trott and Cardinale were getting too cozy.
In response, two well-placed sources shot down the rumors, claiming that it was Zaslav who requested the meeting, and also noting that Redstone and Ellison have known each other for years.
Spokespeople for Trott, Redstone and Cardinale declined to comment.
Warner Bros. Discovery and Buffett did not respond to requests for comment.
