Paramount Global CEO Bob Bakish is set to exit his role on Monday, TheWrap has learned.
The media conglomerate’s board is meeting this weekend to discuss the matter, two insiders with knowledge of the discussions said. Insiders said that the board was upset with Bakish over his decision not to divest assets such as Showtime and BET Group and for not going far enough to cut costs.
Paramount stock ended Friday’s trading session at $11.91 a share — slightly above its 52-week low of $10.12 hit earlier this month, but down 48% in the past year and 17% year-to-date. The company’s market capitalization sits at $8.3 billion and it reported approximately $14.6 billion in long-term debt as of the end of 2023.
“People have been concerned about the performance of the company for some time,” one insider said.
The Wall Street Journal reported that Paramount would establish an “Office of the CEO” made up of the company’s division heads to replace Bakish on an interim basis.
Representatives for Paramount and Bakish declined to comment.
Bakish’s departure comes as Paramount continues to make progress in exclusive talks with David Ellison’s Skydance Media about a potential merger. An individual familiar with negotiations previously told TheWrap that it is unlikely that a deal would be reached before the exclusivity window expires on May 3. It is unclear if that window will be extended.
Skydance, which is valued at over $4 billion, has been a coproducer with Paramount on projects such as “Top Gun: Maverick” and the “Mission Impossible” franchise.
The two-step deal would see Ellison and Skydance acquire controlling shareholder Shari Redstone’s majority stake through National Amusements, which owns 77.3% of Paramount Global’s Class A (voting) common stock and 5.2% of its Class B common stock. The two studios would then be merged together to create a combined company valued at around $5 billion.
Skydance would infuse between $4.5 and $5 billion of fresh capital into Paramount — $2 billion of which would be used to buy out Redstone’s majority stake, while another portion would be used to pay down debt, the individual said. The company and its a consortium of investors, including RedBird Capital Partners and KKR, would have a nearly 50% ownership stake, while the rest of the company would be owned by common shareholders and remain publicly traded. Former NBCUniversal CEO Jeff Shell, Skydance chief creative officer Dana Goldberg and president Jesse Sisgold are all expected to have major roles in the potential combined company, the individual said.
The deal for Paramount must be approved by the board’s independent special committee. Earlier this month, Paramount revealed four board members would step down from their roles at the company’s annual meeting — including three who were on the special committee.
Multiple shareholders have expressed opposition to the Skydance deal, including Matrix Asset Advisors, Ariel Investments, Aspen Sky Trust and Blackwood Capital Management. They have called on the company to pursue competitive bidding negotiations, arguing that the Skydance deal prioritizes Redstone’s interests at the expense of the rest of Paramount’s shareholders and would be “detrimental” to the company’s market value.
Ariel’s founder and chairman John Rogers Jr. and GAMCO Investors Inc. chairman and CEO Mario Gabelli have both previously warned that they could pursue litigation if the Skydance deal or any other bid does not appropriately benefit their clients. Ariel owned a 1.8% stake as of December, while GAMCO’s clients own 5 million shares of Paramount’s voting stock.
In addition to Skydance, Apollo Global Management made a $26 billion bid for Paramount, which was reportedly rebuffed due to concerns around the financing of its bid. The private equity firm has since entered talks with Sony about potentially making a new joint bid, though no offer has formally been made.
Bakish joined Paramount Global predecessor Viacom in 1997, where he held a series of senior corporate, sales and development positions at the company. In 2000, Viacom merged with CBS, but the two companies would later split in 2006. In 2016, Bakish was named chief executive officer of Viacom and three years later, Viacom and CBS would merge again to form ViacomCBS, which would later be renamed Paramount Global.
In a memo to staff in January, Bakish said Paramount would prioritize driving earnings growth in 2024 and laid out a three-pronged strategy to drive revenue while managing costs. Efforts the company has taken thus far include producing fewer local originals, leveraging content licensing, consolidating some of its operations and laying off 800 employees.
During its fourth-quarter earnings call, Bakish said that the company’s direct-to-consumer division is on track to reach streaming profitability domestically in 2025. At the time, Paramount narrowed its streaming losses to $490 million and reported 67.5 million DTC subscribers. When asked about mergers and acquisitions during the call, Bakish said that he would not comment on speculation but emphasized that Paramount is “always looking for ways to create shareholder value.”
Paramount will report its first quarter earnings for 2024 on Monday after the market close. One insider said that Bakish has already prerecorded his remarks for the earnings call.
Analysts surveyed by Zacks Investment Research are currently expecting the company to report earnings of 34 cents per share on revenue of $7.68 billion.
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