Paramount may give up on Libertadores and Sul-Americana, says columnist < No Attack

Gabriel Vaquer – Paramount, which is experiencing a financial crisis and is trying to find a buyer for its operation, is trying to terminate the contract for broadcasting rights for the Copa Libertadores and Copa Sudamericana for Latin America – including Brazil. The tournaments have been with the company since last year as the flagship of Paramount+ streaming in Brazil. The agreement with the South American Football Confederation (Conmebol) runs until the end of the 2026 season.

Paramount has the second choice of exhibition for both tournaments, and has shown exclusive matches from teams from Series A of the Brazilian Championship such as Atlético, Grêmio and Botafogo.

Paramount’s claim is that the company is going through difficult times. Payments to Conmebol are up to date, but the tournament has only had a good financial return in Brazil and Argentina. In other countries on the continent, where the American company also has the rights to open media, the return has been much lower than expected. The revenue in the two main countries is not enough to avoid losses in the region from the event.

There are two lines of conversations at the moment. The first would be to return the rights in the deficit countries, and only keep properties from the competitions in Brazil and Argentina. The second, and the most attempted by Paramount executives, is to pass on the rights to third parties or even return them to Conmebol, which would hand over the games that would be Paramount’s to another media group.

To assemble the transmission team in Brazil, Paramount hired well-known names in the market, such as João Guilherme, Nivaldo Prieto, Paulo Vinícius Coelho, PVC, Alê Xavier, among others. These professionals have a fixed contract with Paramount until 2026, and if the multinational manages to abandon the project, they would be compensated for breach of contract.

This is not the first time that Conmebol has had to deal with something like this. In 2020, during the pandemic, Globo unilaterally terminated the agreement for Libertadores rights. The broadcaster reached an agreement in 2021 and paid a fine to the entity.

In the current 2023-2026 cycle, a renegotiation is also not unprecedented for Conmebol. The OneFootball app renegotiated its contract with Conmebol for competition highlights, and returned the rights in South America, with the exception of Brazil, to reduce costs.

Paramount crisis

According to balance sheets released by Paramount itself to shareholders, Paramount+ streaming made a loss of S$1.6 billion (R$8.2 billion at current prices) in 2023. Due to the problem, productions were cancelled, such as the reality show Rio Shore.

The company’s shares, traded on the United States stock exchange, have accumulated a drop of 52% in 12 months. In three years, the drop is 73%. In last year’s balance sheet, there are around US$14 billion (R$72 billion) in debts and loans owed.

Due to financial problems, Paramount is for sale to resolve the crisis. Private equity fund Apollo Global, according to The Wall Street Journal, offered US$11 billion to buy just Paramount’s film and TV divisions, but the proposal was rejected.

The fund made a second proposal of US$26 billion for the entire group, but the deal was also not accepted. Now, according to The New York Times, Apollo is seeking the support of Sony, which already has Columbia Pictures, to make the acquisition in full. Sony’s entry pleases Paramount shareholders.

The biggest enthusiast for the purchase of Libertadores and Sul-Americana by Paramount, in May 2022, was executive JC Acosta, then president of the company in South America. Shortly after the agreement, in October of the same year, Acosta was fired of the company.

Paramount owns one of the most traditional film studios in the world, which produces franchises such as “Top Gun” and “Mission: Impossible”; from TV brands such as MTV and Nickelodeon; and Pluto TV, the most watched free streaming platform in the world.

Contacted by Folha de S.Paulo, Conmebol states that it has no information yet about changes to the broadcasts of its competitions. Paramount says it prefers “not to comment on speculation”.