Paramount Global (PARA) announced CEO Bob Bakish is stepping down as investors continue to eye the company's dealmaking options.
The company had been preparing to announce that Bakish's departure amid the executive's growing tensions with Shari Redstone, who controls Paramount through her family's holding company National Amusements, according to media reports.
Paramount said it would install an “Office of the CEO” consortium made up of three company division heads in place of Bakish. The division heads include George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, president and CEO of Paramount Pictures and Nickelodeon.
"Paramount Global includes exceptional assets and we believe strongly in the future value creation potential of the company," Redstone said in a press release on Monday. "I have tremendous confidence in George, Chris and Brian. They have both the ability to develop and execute on a new strategic plan and to work together as true partners. I am extremely excited for what their combined leadership means for Paramount Global and for the opportunities that lie ahead."
National Amusements is currently in exclusive talks with David Ellison's Skydance Media to sell its controlling stake in Paramount, according to a source familiar with the matter.
Skydance is reportedly aiming for a two-step deal that would allow it to purchase Redstone's controlling stake. Skydance would then merge its production studio with Paramount's — an important contingency to the deal, which must first be approved by an independent committee of directors at Paramount. It's unclear what Ellison plans to do with the rest of the company.
But Paramount's nonvoting shareholders have publicly expressed concerns over the terms of the deal, which critics say unfairly benefits Redstone.
On Monday, Skydance submitted a revised deal offer in an attempt to appease disgruntled investors, according to multiple reports. The new deal reportedly includes a $3 billion cash injection and offers current shareholders a larger stake of the combined company. Paramount's exclusivity window with Skydance expires on May 3.
Meanwhile, Sony Pictures Entertainment and private equity firm Apollo Global Management have also been in talks over a joint bid to buy Paramount, according to media reports. (Disclosure: Yahoo Finance is owned by Apollo.)
"The clock is ticking for Ms. Redstone to come to a decision as we believe Paramount’s distribution deal with Charter is set to expire at the end of the month," MoffettNathanson analyst Robert Fishman wrote in a note published April 22.
Fishman said Disney's (DIS) precedent-setting deal with Charter could have a meaningful impact on Paramount "should Charter choose to either drop Paramount’s long tail cable networks and/or force Paramount+ to be bundled at a heavily discounted wholesale price to Charter subscribers."
Ultimately, though, the fate of Paramount's future all comes down to Redstone.
"While shareholders can make appeals for her to reconsider the Apollo/Sony deal that better serves their interests, Redstone seems set on crossing the finish line with Ellison and his backers for now," Fishman said.
Paramount’s executive shake-up comes as the company's streaming losses narrowed in Q1 amid a greater profitability push.
McCarthy said on the earnings call that the company is focused on three priorities: leveraging Paramount's content, strengthening the balance sheet, and optimizing its streaming strategy.
Paramount reported a direct-to-consumer (DTC) loss of $286 million, beating expectations of a loss of $347 million, according to Bloomberg consensus estimates. The results were also narrower than the $490 million loss seen in the fourth quarter and $511 million loss in the year-earlier period.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at [email protected].
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