Following the news last week that Apollo Global is also kicking the tires on National Amusements, I recalled that when I was an M&A banker on Wall Street, all the biggest deals were kept quiet until they were essentially tied up. So is the current buzz surrounding Paramount another head fake? For today’s issue, I chatted with some wise bankers and private equity machers to get the insider’s take.

But first…. An update from my partner Eriq Gardner on the Trump legal roadshow…

• Apologies to the intrepid reporters who have braved the tundra in Iowa and New Hampshire, but the last few days have proven that the courts, not the caucuses, will generate the real excitement this election cycle. Take the second E. Jean Carroll defamation trial, where Trump has been wholly unable to restrain himself, muttering to his lawyers so loudly during Carroll’s testimony that Judge Lewis Kaplan threatened to remove him—to which Trump responded, “I would love it. I would love it.” By the weekend, Carroll’s attorney Roberta Kaplan (no relation to the honorable judge) was requesting she be allowed to urge the jury to factor in Trump’s ongoing defamatory campaigning when deciding punitive damages. Just imagine what’s in store once the criminal trials kick off.

  Meanwhile, the drama at the Supreme Court is no less provocative. With the justices reviewing the Colorado decision to disqualify Trump from the state’s primary ballot, a flurry of amicus briefs from lawmakers, law professors, and public interest coalitions are pouring in. One standout comes from a group featuring longtime conservative elections lawyer Ben Ginsberg, whose brief imagines a scenario in which Trump wins an electoral majority but is then disqualified during Congress’s vote-certification process. In short, Ginsberg is warning the justices that by punting the question of whether Trump can run for president as an insurrectionist, they’d only be setting up the nation for more chaos down the road. No word yet on whether Trump will be at the February 8 hearing. —Eriq Gardner

Is all of this just a bunch of M&A mumbo jumbo, cooked up by Shari to make it seem like she’s finally on her long-awaited and much-hoped-for exit ramp? Or is there anything substantive behind these various deal leaks?

My experience as a Wall Street M&A banker was that the real deals are most often kept quiet as long as possible, and that there’s no need to drop breadcrumbs in the media along the way. Did anyone hear a peep about the recent $12.5 billion deal between Larry Fink, at BlackRock, and Bayo Ogunlesi, at Global Infrastructure Partners, before it was announced? These are two of the most connected people on the planet—Bayo remains the lead independent director on the Goldman board, until the next shareholders’ meeting—and yet the deal was totally locked in a vault. Contrast that with the steady stream of noise about who might try buying NAI as a way to get Paramount, or who might buy Paramount directly.

I’m in agreement with Rich Greenfield, the media analyst at LightShed Partners, who has argued that there’s not going to be any deal for NAI or Paramount Global, at least not this year. (The Paramount Global stock price, which has dropped below pre-deal-heat levels, offers a proxy for the state of play.) The biggest impediment to a deal, of course, is the change of control provision that would require any financial buyer to refinance $11.2 billion of Paramount’s senior notes. (Since the provision kicks in based on a debt downgrade from the credit rating agencies, it probably would not apply if Apple or Amazon were to buy NAI or Paramount—or if the Bank of Larry Ellison guaranteed the deal.) This provision has been described to me as a “pretty close to a poison pill” by someone who has closely studied the language in the debt indentures. (It’s confusing legalese, of course, but I agree.)

So even for Apollo, which is a private credit behemoth and has signed a non-disclosure agreement with NAI, this provision would be extremely challenging in the current debt market. “There’s two issues they’re dealing with there,” explained a Wall Street veteran. “One is the depth of the market, and the second is credit quality. And I think both matter. That’s just a lot of investment-grade debt to sell, to get committed to, in this market for a very tough asset. It would be one thing if it was like a pristine asset that everyone was tripping over to finance. But you’re talking about something that’s going to be close to five times levered, depending on how you think about the streaming losses, but it’s very levered, and it’s a lot of debt.”

There are other problems, too. I’m told by someone familiar with her thinking that Shari “wants a really high, off-market premium” for her roughly $900 million economic stake in and voting control of Paramount, which is housed at NAI. Of course she does—it’s her family’s legacy and fortune, after all. And this is her last chance for gas. But will she get what she wants?

An irrational buyer might do that for her, and maybe she’s holding out for one to come along. But a rational buyer will not pay her $2 billion (my hypothesis of her pie-in-the sky number), or likely anything close to that. That’s another reason why there hasn’t been a deal announced yet: The rational buyers are not in sync with the irrational seller. It takes two to tango, obviously, and Shari seems to be dancing with her father’s legacy.

And there is yet another complicating factor limiting how much a rational buyer would pay Shari for NAI. In addition to the upcoming $37.5 million (or so) debt payment that she owes to Wells Fargo on a term loan made to NAI, I’m told she is also focused on tax payments related to her father’s estate coming due as soon as April, or so. (A person familiar with NAI told me that Shari has “no near-term” estate tax payments due, as they have been “deferred” for around a decade, but that Shari does owe interest payments on the outstanding estate-tax bill. “It would not make sense to suggest that this 2024 payment is a consideration in a transaction process,” this person said. “The [principal] tax payment is deferred.”) Why pay a premium for something when, if you wait, it may become available at a meaningful discount or in bankruptcy court?

Apollo may end up being Shari’s buyer of last resort, but it’s hard to overlook the hazards that might turn off the others in this suspiciously loud public auction. To wit: Potential buyers may prize parts of Paramount Global, such as the studio or CBS, but they are likely terrified by what to do with the money-losing Paramount+, the cable channels, BET or Showtime, and the tax implications around setting up a putative legacy cable network lemonade stand. (Although if the price were low enough, let’s talk…). And then there is the risk of pissing off the company’s largest economic shareholders, Warren Buffett and Mario Gabelli. (It’s also curious that Trott, who is representing Shari in the NAI sale, is also Buffett’s favorite investment banker. I can only imagine what the conversations between the two of them are like these days on the subject of Paramount.)

Maybe the best approach here is for a sophisticated distressed player like Apollo to make a package of rescue financing available to Shari so she can repay Wells Fargo, BDT & MSD (if possible), and other creditors, and to help Shari make her tax payments, all secured by her stake in Paramount, and then sit back, wait, and see what happens. Of course, Apollo feasts on circumstances like the ones Shari is facing and will keep its powder dry to the very end.

I’ve long thought that Apollo would be a smart buyer for (parts) of Paramount Global, so I am glad to hear that the firm has signed an NDA and is participating in the process, whatever that means at the moment. This is just the kind of complicated, sticky situation that plays to Apollo’s strengths as a firm. NAI is bordering on a distressed situation, where some form of (expensive) rescue financing might be in order to help Shari out of her various predicaments. There also is a business turnaround/repositioning that’s needed here, not unlike what Apollo was able to do with Yahoo. And, given that Apollo has an equity stake in Legendary Pictures, and in Cox’s television station group, and in Northwest Broadcasting—Apollo is the seventh-largest owner of television stations in the country—there are definitely parts of Paramount that it would be interested in owning, particularly its local television network and potentially even CBS, which still has some luster despite its fading income statement. (Fifty million people watched its broadcast of the Bills-Chief game on Sunday, and its contract with the NFL doesn’t expire until 2033.)

Of course, Apollo doesn’t want the parts it doesn’t want, and it’s never going to buy all of Paramount—enterprise value of some $24 billion, including debt—or pay Shari her over-market premium. But if Shari’s problems become more acute, and we’ll know by the spring, then watch for Apollo to pounce. “It’s early innings, is my sense,” the Wall Street vet told me. “It’s the beginning of the end, not the end of the beginning.” Although there was some good news for Paramount’s Comedy Central on Tuesday when Jon Stewart announced he was returning to The Daily Show for one night a week through the presidential election, my gut continues to tell me that for all the noise around NAI and Paramount, it’s really just the sound of vultures circling.