By Brett Pulley
Tyler Perry is one of Black Entertainment Television’s most prolific creators — and just one name in a constellation of stars circling the storied but struggling cable channel.
Rapper Curtis Jackson, better known as 50 Cent, and basketball legend Shaquille O’Neal are said to be part of a group that is weighing a bid for BET Media Group, in which current owner Paramount Global has been considering selling a majority stake. Music mogul Sean “Diddy” Combs has also been reported to be considering making an offer.
The business, which includes the BET and VH1 networks, could be worth about $3 billion, based on annual cash flow. Bids are expected in the coming days, according to people close to the process. A Paramount Global spokesperson declined to comment on any potential sale.
“When this came up, I thought ‘wow, this is meant to be,’” Perry said in an interview. The star, who portrays the grandmotherly Madea character on stage and in films, produced eight scripted series and about 100 original episodes for BET properties last year.
“What I can tell you is it’s worth a lot more with me than it is without me,” he said.
BET debuted at the dawn of an era that redefined television. Launched by entrepreneur Robert L. Johnson in 1980, it became one of the most successful Black-owned businesses in history, and made Johnson a billionaire. In 2001, he sold BET to Paramount predecessor Viacom for $3 billion.
Now, with TV going through another technologically driven metamorphosis, BET’s business has waned as more viewers decamp to streaming services, adding to the drag on its parent. In the quarter ended March 31, Paramount Global posted an operating loss of $1.2 billion.
As a result of a 2019 production deal with Paramount, Perry owns 25% of BET+, the network’s streaming channel. He said he discussed expanding his involvement in the business with Paramount Chairman Shari Redstone.
“I’m pretty sure I’m going to give it a hell of an effort,” Perry said, discussing his plans to bid.
Perry’s office declined to confirm reports that he is working with Ariel Investments, the Chicago-based investment firm with close ties to former President Barack Obama and Perry’s longtime friend, Oprah Winfrey.
An Ariel spokesperson didn’t respond to a request for comment.
Cable’s Erosion
Paramount Global has been hard-hit by the continuing atrophy of traditional TV. This month, the company said it was letting go of 25% of the workers in its US cable business and shutting down MTV News, which like BET is an iconic but declining fixture of cable’s glory days.
Miami-based media investment firm Group Black, another interested BET suitor, has assembled a collection of partners that includes Kenya Barris, another accomplished TV producer. Barris, whose credits include hit ABC show Blackish, has a stake in a BET production venture.
Also among the Group Black partners are rap star Jackson, who helped create the urban gangster drama “Power” for Starz Inc., and National Basketball Association Hall-of-Famer and TV commentator O’Neal, whose expanding business interests include a stake in Authentic Brands Group, which owns and licenses formidable yet sometimes fading retail brands such as Forever 21, Eddie Bauer and Barneys New York.
A Group Black spokesperson declined to comment on a potential BET bid, calling it “rumors and speculation.” The spokesperson said Group Black “was formed to dramatically transform the face of media ownership and investment.”
Combs, whose assets include the music-centric cable and digital network Revolt Media, is also considering submitting a bid for BET, according to media reports. A combination could give 10-year-old Revolt broader reach in Black households.
Black Ownership
Byron Allen, the onetime stand-up comedian who owns television, production and film properties including The Weather Channel, confirmed that he too has his eyes on BET.
“There is a process and we’re involved,” Allen said on Bloomberg Television on Tuesday. He emphasized what he has said in the past — that he thinks BET should be controlled by Black owners.
“I’m rooting for Tyler, I’m rooting for P. Diddy, and anybody else who may be in the process, 50 Cent, Shaquille O’Neal,” Allen said. “I’m rooting for Black ownership when it comes to BET and VH1. That’s nothing but a win-win whoever gets it.”
Allen said that potential bids are forthcoming. “Everybody’s moving quickly. I think they will have a new owner pretty soon,” he said.
BET’s financial results have suffered in the face of cable’s decline. In May 2020, BET had 74.7 million subscribers. By the beginning of May this year, that number had dropped to 69.7 million, according to Nielsen Cable Universe.
At the same time, BET had net operating revenue of $463 million and cash flow of $192 million in 2020, according to S&P Global Market Intelligence. By 2022, operating revenue was down to $432 million and cash flow had dropped to $188 million.
Scott Robson, a senior research analyst at S&P, said that BET’s subscribers peaked in 2012 at 91.6 million. He estimates that the network has since lost over 28 million subscribers, a rate of attrition comparable to other Paramount Global cable outlets such as MTV and VH1.
Cultural Beacon
Despite the challenges, BET stands as a beacon for those seeking to own it, a formidable brand with the ability to reach an important demographic across digital platforms.
“The reality is BET is still a golden brand. This is a chance for a new owner to reconnect with Black consumers with content and experiences that say, ‘Hey, you can come back home. We’re Black-owned,’” said Roland Martin, who owns the Black Star Network streaming channel and regularly discusses the topic of Black-owned media on his Unfiltered program.
Perry thinks his contributions to BET put him in an ideal position to carry it into the future. He said he has written hundreds of episodes for the channel and delivered them “at a number that is so cost-effective that it gives a great return. All of that is more and more reason for it to be mine.”
Four of the top five scripted shows on cable for Black consumers age 18 to 49 according to Nielsen data are produced by Perry, including Sistas and Assisted Living.
Perry said under the terms of his current Paramount deal, he will be free later this year to explore deals with other media outlets. In a recent interview, BET Chief Executive Officer Scott Mills called Perry “an absolute singularity” in film and television.
“There is no one in the business who is like him,” said Mills.
–With assistance from Kamaron Leach and Christopher Palmeri.
More stories like this are available on bloomberg.com.
