Media moguls and frequent business collaborators John Malone and Barry Diller spent part of Thursday’s panel session at the Paley Center for Media recalling the one that got away: Paramount Pictures.
During a luncheon session that also featured Warner Bros. Discovery CEO David Zaslav and former Liberty Global CEO Mike Fries, Malone touched on a lot of the material in his new book. Born to Be Wired: Lessons from a Lifetime Transforming Television, Wiring America for the Internet, and Growing Formula One, Discovery, SiriusXM, and the Atlanta Braves was published this week by Simon & Schuster.
Three-plus decades before Skydance and other bidders pursued Paramount Global and then ran an obstacle course with regulators and the White House to get the deal through, the previous tussle over the Melrose lot resulted in a lot of spilled ink by the press. (And it was actual ink at the time.)
Sumner Redstone, who ran Viacom at the time, was battling Malone and Diller for control of Paramount. Redstone hit on a legal gambit, to sue Malone personally for making the bid via QVC, the home-shopping channel he and Diller then controlled, a move Redstone claimed was a violation of SEC rules. After the $3 billion complaint was filed, Malone recalled, “I didn’t even get mad at Sumner. … I sat there and said, ‘That’s a smart move.’ It did blow us up. It blew us out of the deal.”
The maneuver undid momentum that had been building on the Malone front after he brought Diller in to oversee QVC.
“Barry’s doing great, the stock is flying, and Barry says, ‘You know, why don’t we use this equity to buy Paramount?’” Malone said. “So, he puts in a Herculean effort to assemble a buyer group, to buy Paramount. And then Sumner blows TCI out with this litigation, and Barry just didn’t want to go that extra mile and take in Bell South as a controlling partner.”
The Federal Trade Commission required TeleCommunications Inc., or TCI (Malone’s company) to withdraw $500 million it had pledged for the deal. That effectively handed the trophy to Redstone, who upped his bid to $10.7 billion.
“So, he stood down,” Malone said of Diller, adding that it was a “great disappointment” given Diller’s background of having run production at the studio. “Obviously, it would have been a huge, huge home run. with his talent and Paramount, you know, and the industry behind it.”
Diller praised Malone’s “humanity” and was asked by Robichaux what his reaction was to receiving a note of apology from him after the Paramount deal went “sideways.” Had he ever received such a note? “Rarely,” he said. “Rare to never.”
As Malone recounts in the book, Diller showed that pithy side in reacting to the end of the line for his quest for Paramount. He issued a press release reading, in its entirety, “They won. We lost. Next.”
Panel moderator Mark Robichaux, a former longtime journalist who edited Malone’s new book after writing a biography of him in 2002, did not ask Malone or the other panelists about Paramount’s latest merger with Skydance, which closed last month. Then again, there was a lot of ground to cover. The book spans more than six decades and charts the rise of Malone, 84, from an engineering background to his current status as billionaire and media industry seer.
The reeling off of mogul war stories during the nearly 90-minute long program was matched by the crowd of about 150 people in the cozy confines of the Paley Center’s 10th-floor event space. Seated around the dozen or so lunch tables were, among others, Madison Square Garden and Sphere CEO James Dolan; New England Patriots owner and NFL media maestro Robert Kraft; Liberty Media CEO Derek Chang; and former Scripps Networks Interactive CEO Ken Lowe. Frank Bennack, former longtime CEO of Hearst Corp. and longtime Paley Center official, kicked things off with opening remarks and introductions.
