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Report: Paramount Home Entertainment in Merger Talks

30 Jun, 2009 By: Erik Gruenwedel


Paramount Home Entertainment is reportedly in high level negotiations with Sony Pictures Home Entertainment and 20th Century Fox Home Entertainment to merge select operations.

The Financial Times reports the merger, which it says is prompted by a 20% industry decline in DVD sales, would combine DVD production, distribution and back-office functions, including switching to Sony DADC disc production from Technicolor.

Paramount Home Entertainment would continue to operate as a brand, with the studio and new partner operating separate marketing and sales operations, according to the report.

The merger rumors follow a report two weeks ago by Reuters that a leading investment firm thinks Paramount Pictures could itself merge with another studio.

“Today there are seven or eight motion-picture studios. A round of consolidation will occur in the next six to 12 months because of the costs of financing, prints and advertising, the benefits of globalization and such,” Reuters quoted CEO Mario Gabelli of investment firm Gamco Investors Inc. telling Barron’s. “We hear talk of something going on.”

The home entertainment unit of Paramount likely controls distribution of a much coveted prize: Transformers: Revenge of the Fallen, which has generated more than $400 million in worldwide box office revenue in its first week of release.

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