Bob Bakish, Worldwide CEO of Paramount
Courtesy of Paramount Global
Paramount Global CEO Bob Bakish is officially at the company.
The entertainment conglomerate – in the midst of a sale process – is turning to a handful of top executives to run the company.
Chris McCarthy, George Cheeks and Brian Robbins will make up a “CEO’s office” that will run Paramount on a day-to-day basis for now. The three executives will work with Paramount’s board of directors and Chief Financial Officer Naveen Chopra.
According to Paramount’s quarterly report, Bakish will officially resign on Tuesday and has agreed to remain employed by the company until October 31 as a “senior advisor.”
The drastic change comes as Paramount is in the middle of an exclusive negotiating window with a group of potential buyers consisting of David Ellison’s Skydance, RedBird Capital and KKR, with talks surrounding a plan that would keep Paramount public but with the executives at Skydance and RedBird who would effectively run things. and execute a new strategy.
At the same time, private equity firm Apollo has held discussions with Sony Pictures about making a joint bid in a deal that would deprive Paramount of a merger with Sony and Apollo.
During the company’s earnings call, McCarthy said of his collaboration with Robbins and Cheeks: “It’s a true partnership. We have deep respect for each other and we will lead and manage this business together.
“In this regard, we are finalizing a long-term strategic plan aimed at best positioning this legendary company to achieve new and greater heights in our rapidly changing world. The plan is built around three pillars: first, making the most of our successful content; Second, strengthen our balance sheet; And third, optimize our streaming strategy.
“We look forward to getting back to you as soon as possible to share our plan and discuss it in detail at that time,” Robbins added.
The company did not answer any questions during the call, with executives providing only pre-prepared remarks.
Bakish received compensation valued at $31.3 million in 2023, a difficult year for the industry given the double strike in Hollywood. He this year encouraged his staff to focus on “execution” amid discussions around the business and called “cost management” and profit growth a key priority for 2024.
Although Bakish largely declined to comment on deal discussions, he told analysts during the company’s fourth-quarter earnings conference call that he was focused on creating value for all shareholders (emphasis mine), suggesting some light between him and Shari Redstone, Paramount’s majority shareholder.
“Paramount Global includes exceptional assets and we strongly believe in the future value creation potential of the company,” Redstone said in a statement. “I have immense confidence in George, Chris and Brian. They have both the capacity to develop and execute a new strategic plan and to work together as true partners. I am extremely excited about what their combined leadership means for Paramount Global and the opportunities that lie ahead.
Wall Street analysts have said in recent weeks that Paramount has lost investors over concerns that majority shareholder Redstone would benefit from a deal with Skydance, while regular shareholders would be diluted.
But Wolfe Research analyst Peter Supino recently changed his rating from “underperform” to “peer perform,” while abandoning the use of a stock price target. “Although fundamentally there are real risks to Paramount’s business in the form of declining linear profitability and a direct-to-consumer segment that we expect will remain unprofitable for the next few years , the growing prospect of a sale of the company to an owner “The greater probability of exploiting the intrinsic value of Paramount outweighs the short-term financial concerns”, he argued.
The CEO’s ouster comes after days of recurring discussions about Bakish’s future at the company and ahead of Paramount’s first-quarter earnings conference call after the market close Monday.
Bakish has long had a reputation as being popular at Paramount because of his more collaborative leadership style that held his executives accountable and was open to new ideas. It has also been praised for focusing on securing distribution deals beyond traditional pay TV deals to include streaming, mobile and other platforms earlier than its peers. And Bakish encouraged a global mentality with local execution.
He also appeared to have a long-standing constructive relationship with Redstone, whose father, Sumner Redstone, had handed over the CEO title to Paramount’s predecessors, CBS Corp. and Viacom, respectively to Leslie Moonves and the controversial Philippe Dauman.
“I would like to take a moment to thank Bob for his leadership of the company during a time of immense change for us and the industry,” Chopra said on the call. “Not only has Bob helped me overcome a number of challenges, but I am proud of everything we have accomplished and it has been a privilege to work with him.
“With employees in limbo for years as Redstone battled with Dauman and Moonves, there is no doubt that Bob Bakish was the right CEO to lead Viacom in 2016,” wrote Rich Greenfield, an analyst at LightShed Partners, and colleagues in a March report. “Bakish has been with Paramount and its predecessor Viacom for 27 years and was instrumental in improving Viacom’s relationships with distributors that Dauman had largely destroyed, while significantly improving internal morale.
But then the LightShed team called for new leadership. “Unfortunately, after making significant progress and taking the merger over the goal line in 2019, Bakish and his management team made a critical strategic error in spring 2020 that ultimately crippled the company financially,” they argued, talking about the creation of the streamer Paramount+. .
