Paramount gives up on getting rid of the Libertadores contract and must comply with the agreement until 2026

Paramount has given up on giving up the contract that guarantees it the broadcast rights to the Libertadores da América and the Copa Sudamericana. The company was looking for options to stop showing the games since the beginning of April, as anticipated by the F5.

There were two reasons that made this happen. The first is the lack of interest in the package that Paramount currently has access to. The media conglomerate has the second choices of the two continental tournaments that it shows on pay TV and streaming. No company was willing to take on the games.

The second and most important point is the high fine that would have to be paid to Conmebol (South American Football Confederation) if the rights were handed over. O F5 found that the value is around US$50 million (R$270.4 million), a similar amount to what Globo disbursed in 2021 after an agreement with the entity for breaking the Libertadores agreement on open TV due to the Covid pandemic- 19.

In addition to Brazil, Paramount has rights to the games in the rest of Latin America. The company is going through a difficult financial phase. 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 from the event.

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, and Alê Xavier, among others. The professionals mentioned have contracts until 2026.

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 2023-2026 cycle, the OneFootball application renegotiated its contract with Conmebol for competition highlights and returned the rights in South America, with the exception of Brazil, to reduce costs.

THE PARAMOUNT CRISIS IN NUMBERS

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

The company’s shares, traded on a stock exchange in the United States, 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.

To remedy the crisis, Paramount is for sale. The private equity fund Apollo Global had, according to the Wall Street Journal, offered US$11 billion (almost R$60 billion) to acquire Paramount’s film and TV divisions, but the proposal was rejected.

The fund made a second proposal of US$26 billion (more than R$140 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 complete the acquisition. Sony’s entry pleases Paramount shareholders.

The biggest enthusiast of 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 by Paramount. company.

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

Wanted by F5, Conmebol states that it has no information about changes in the broadcasts of its competitions. Paramount says it prefers “not to comment on speculation.”