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What Warren Sees in Shari

News and notes on Buffett’s mediaco M&A play, Elon’s latest machinations, and why Wall Street bankers love Brian Roberts.

Paramount Global chairperson Shari Redstone can pretty much do whatever she wants at the now-combined entity, including replacing its C.E.O., its board and single-handedly deciding whether the company should be sold.
Paramount Global chairperson Shari Redstone can pretty much do whatever she wants at the now-combined entity, including replacing its C.E.O., its board and single-handedly deciding whether the company should be sold. Photo: Jared Siskin/Patrick McMullan, Getty Images
William D. Cohan
May 22, 2022

My former M&A banker instincts were triggered this week after Warren Buffett, the most gifted investor of our lifetime, disclosed a $2.6 billion stake in Paramount Global, formerly ViacomCBS, a company whose leadership I have occasionally criticized. Paramount, after all, holds an awkward position on the streaming leaderboard, not only too small to compete with the likes of Netflix and Disney but also too bulky—following Shari Redstone’s recombination of the Viacom and CBS assets—to be easily acquirable by a rival, especially as long as the once-beloved CBS linear television network remains in the picture. 

If there is one thing I know about Buffett, it is that he tries pretty damn hard not to overpay for companies. So let’s stipulate that he thinks Paramount Global is undervalued. Since Warren revealed Berkshire Hathaway’s stake on Monday, in a S.E.C. filing, the Paramount Global stock is up around 16.5 percent in a very rocky market. That doesn’t yet prove Warren is right that the company is undervalued, but it does prove that the Buffett halo is still for real. It’ll take longer to prove whether C.E.O. Bob Bakish and his team at Paramount Global can live up to whatever Buffett is expecting from it. (Buffett did not respond to my request for comment.) 

Personally, I suspect the underpinning of Buffett’s logic is the M&A play that has been lingering over what Shari is now calling Paramount Global ever since its inception as ViacomCBS in 2019. One of the biggest open secrets on Wall Street is that Shari would happily sell the company to the right suitor offering the right price. I can assure you that Aryeh Bourkoff, Shari’s banker, has thought of every permutation and combination out there that would make it happen. The other open secret on Wall Street is that there probably isn’t a buyer for Paramount Global at the moment, especially as long as it owns CBS. Not that CBS isn’t wonderful and all. Who doesn’t love watching 60 Minutes or its NFL broadcast or the latest NCIS? It’s just that it’s a complicated asset for some of the most logical acquirers, such as Comcast, to own. (I note with interest that CBS is no longer in the name of the company; that was not by accident.) 

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