Why Paramount Paid $150 Million for a $20 Million Media Company

When Paramount agreed to buy The Free Press today for a reported $150 million, it raised a simple but critical question: Why pay so much for such a small business?

The startup, which launched in 2021, is generating around $20 million in revenue, according to a person familiar with the matter. That means Paramount is paying 7.5 times revenue for the outlet.

The multiple places the deal outside normal media economics, according to interviews with four digital media M&A experts. In most transactions, both legacy and digital outlets trade at five to 15 times EBITDA, not revenue.

But for Paramount, the tie-up is more of a strategic decision than a strictly financial one, according to the analysts. 

The company is not buying The Free Press for its profit stream today. Instead, it is making an investment in an outlet whose positioning, talent, and potential to scale could swell dramatically when plugged into the broader CBS News platform.

A price untethered from the numbers

Beginning in 2022, when federal lending rates surged, digital media acquisitions largely shifted to multiples based on earnings rather than revenue, according to Robert Berstein, managing director at JEGI Clarity.

The fact that The Free Press is valued on its revenue, rather than its profit, suggests that Paramount is interested in the business for its potential rather than its current production.

“The purchase is not based on a financial valuation,” Berstein said. “It’s based on a strategic one.” 

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In fact, the multiple could actually be higher than 7.5 times revenue. While neither The Free Press nor Paramount has confirmed the $150 million price tag. Reporting from multiple sources found that the deal is a mix of cash and stock.

Since the Paramount-Skydance merger became official on Aug. 7, the value of its share price has risen 72%, from $11 to $19. As a result, the stock portion of the deal has likely grown more valuable amid the negotiations for The Free Press, ballooning the multiple even further. 

Buying influence—and a business to grow

The transaction makes more sense when viewed as an early stage investment, according to Oaklins DeSilva+Phillips partner Jay Kirsch.

The Free Press, he noted, operates like a startup with high-quality recurring revenue, limited marketing spend, and a large pool of untapped subscribers.

Paramount can now fund growth at scale, converting that audience into paying customers and benefiting from the kind of predictable, renewal-based revenue that investors reward. In that view, the deal is less a splurge than a cheap entry into a category of digital-first, direct-to-consumer news brands that are becoming harder to buy.

“It starts to feel less like a crazy price if they’re doing more than $15 million in subscription revenue,” Kirsch said. “This is a real, predictable subscription business with a lot of upside.”

A talent play wrapped in a cultural reset

The acquisition also doubles as a high-profile acqui-hire. 

Founder Bari Weiss — along with her network of contributors and relationships — is the core asset Paramount wanted, according to Chris Erwin, founder of the M&A advisory firm RockWater.

The deal is similar to the kinds of pay packages Netflix used to offer compelling showrunners like Shonda Rhimes and Ryan Murphy, where studios shelled out for creative leadership. Weiss will now lead CBS News, giving Paramount both a personality and a new editorial identity.

Her arrival signals a broader cultural reset within CBS, where longtime producers and correspondents have already expressed unease about the ideological shift.

“You get her subscribers and her talent network, yes,” Erwin said. “But imagine how much more impactful she can be now that she has the backing and platform of Paramount to utilize.”

Speed, symbolism, and politics

Paramount’s urgency reflects both business strategy and political calculus. 

The company, recently restructured under the ownership of David Ellison, needed to signal to investors and Washington alike that it is capable of decisive action.

The timing adds up: In recent months, Paramount agreed to pay a legal settlement to Donald Trump, canceled The Late Show With Stephen Colbert, and has now installed Weiss — a figure celebrated by conservative and centrist audiences — at the helm of CBS News.

Together, these moves suggest a bid to shift the image of the company from a liberal bastion to a centrist powerhouse, capturing an audience many advertisers view as underserved.

It also focuses investor attention on growth areas within the company itself, offering a more enticing narrative about the future of the company, according to Kirsch.

“It’s a big headline number that says they’re here to be investors in cutting-edge digital products,” he said. 

What it means for digital media

For the broader market, experts are divided. 

Some see the deal as validation of creator-led media, a sign that individual journalists with direct relationships to audiences can command rare premiums. Kirsch called The Free Press one of the only creator-led companies to scale up into enterprise.

Others doubt the ripple effects. One M&A analyst who spoke with ADWEEK said the deal will change little about the broader market.

“Paramount will keep buying, but most others won’t do deals like this,” they said. 

Still, even skeptics acknowledge that the transaction will influence how legacy outlets think about talent-driven franchises and direct-to-consumer monetization.

A high-risk integration

Even the bullish voices concede that integrating a 3-year-old startup into a 90-year-old newsroom will test the culture of CBS.

Whether the bet pays off may depend less on The Free Press’s financials than on whether Paramount can use Weiss’s brand to rebuild trust and redefine what a centrist news operation looks like in the post-network era.

“The integration risk is wildly real,” Berstein said. “Still, everyone out there is rooting for these guys to succeed because it offers a blueprint for how legacy media could redefine itself with digital talent.”