Paramount Global reportedly turned down billions for Showtime in favor of many more “Billions.”

As first reported last week by The Wall Street Journal, Paramount recently declined a $3 billion offer for Showtime by former executive David Nevins and his backers at private-equity firm General Atlantic. That’s a hefty — and seemingly generous — price tag for a brand effectively being buried into Paramount+. IndieWire reached out to representatives for both Paramount Global and General Atlantic but did not immediately hear back.

It also wasn’t the first multibillion dollar offer for the premium-cable channel that brought us “Homeland” and “Shameless.” Lionsgate wanted to merge Showtime with Starz, the Journal wrote. Starz, bought by Lionsgate in 2016 for $4.4 billion, is the one up for sale these days. The owner would be lucky to sell Starz for half that today, which should demonstrate valuation trends for these premium-cable brands in a streaming world.

A spokesperson for Lionsgate did not immediately respond to our request for comment.

So, Nevins wasn’t first. He wasn’t even the first former Showtime executive, nor the most generous, to flash his checkbook in front of Paramount Global’s controlling shareholder Shari Redstone. Fellow alum Mark Greenberg, backed by private investment bank Blackstone Inc., offered $6 billion for Showtime just two years ago, per the WSJ.

These are significant figures. The company’s current market cap is $15 billion; its enterprise value, which also takes cash and debt into account, is a bit under $30 billion. Shares in Paramount Global (PARA) declined following the WSJ story (the stock has since recovered.)

On February 16, after Paramount Global reported disappointing fourth-quarter 2022 financials, LightShed Ventures analyst Rich Greenfield asked why they can’t seem to let Showtime go — not even for bids like these.

“We think there’s enormous value to unlock with the integration of Showtime and Paramount+,” Paramount chief Bob Bakish answered. “If we were to divest the asset, it would have to create more value than our own operating plan. And as stewards to shareholder value, we will always listen. But frankly, that bar is pretty high.”

Seacia Pavao/SHOWTIME

The bar ain’t that high, Bob.

“Given the headwinds facing linear TV and the multichannel bundle, selling Showtime for $3 billion-plus would be a big win for Paramount,” Greenfield told Puck on Monday. “If there is still interest, we suspect Paramount investors would applaud a transaction.”

Perhaps Bakish is holding out for a standing ovation. In a week-ago note to investors, Wells Fargo analysts wrote that Redstone and Bakish may be positioning Paramount Global to be sold as a complete company rather than seeing it unloaded piecemeal. That may be so, but already some pieces may not stick around for that potential eventuality: Paramount is now exploring a sale of BET and VH1.

Bakish has previously acknowledged that he runs Paramount Global to keep it attractive for acquisition. It’s a wise backup plan; potential buyers include NBC-owner Comcast — there would be a likely FCC issue if CBS were part of the deal — or Warner Bros. Discovery, which can’t legally do much until next year. With Paramount’s streaming costs set to peak this year with a look toward profits in 2024, the timing is interesting.

In the interim, Paramount will take a page out of “Dexter” and bleed Showtime subscribers dry — especially the ones with traditional-TV plans. Wells Fargo estimates Showtime has 16 million linear subs and 11 million from direct-to-consumer, and brings in $2 billion in annual revenue. The bank believes Showtime’s annual earnings (before interest, taxes, depreciation, and amortization — aka EBITDA) are about $400 million. At a $3 billion valuation, that’d be a 7.5x multiple; compare that with Paramount Global in total, which trades at 10x by Wells Fargo’s 2023 year-end estimates.

In the words of Paramount Pictures’ “Braveheart,” HOLD!

Paramount, which does not specifically break out Showtime’s subscription numbers, ended 2022 with more than 77 million streaming subscribers; nearly 56 million of those came from Paramount+. The standalone Showtime OTT platform will be discontinued in the third quarter of 2023, when “Paramount+ with Showtime” becomes official both on cable and streaming. It’ll also become pricier — the tier is going up by $2 per month.