Byron Allen, the media entrepreneur who very publicly made a $14 billion offer for Paramount Global, plus the assumption of the company’s $15 billion in debt, poses a very particular kind of dilemma for Shari Redstone and her M&A adviser, Byron Trott. On the one hand, Allen Media is not without its successes. It’s a private company, so it’s hard to know how things are going, but Allen has a net worth estimated by Bloomberg at $735 million, and he owns the Weather Channel, which he told my partner Matt Belloni the other day is very profitable for him. He also owns a bunch of local television stations. 

But Allen Media Group also has debt, and it’s trading at a significant discount to par. According to Bloomberg, Allen Media Group’s bank loans are trading for around 90 cents on the dollar and, according to a recent Morgan Stanley report, the company’s senior notes, due 2028, are trading at 52 cents on the dollar. Shari and Trott likely see a red flashing warning sign about the viability of Allen’s $30 billion equity-and-debt offer for Paramount. Where is the money coming from? When Allen called Matt earlier this week, the mogul was extremely evasive. Alas, the days when Drexel Burnham young guns Leon Black and Mike Milken could write a “highly confident” financing letter to get people’s attention are long gone. If Allen wants the asset, he needs to show the world he’s got the money rather than being cagey about his sources of funding. This is deal insanity, and shouldn’t be taken seriously.