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Paramount is preparing to fire chief executive Bob Bakish, adding more uncertainty at the Hollywood group controlled by Shari Redstone as it holds merger talks with Skydance Media and prepares for another potential bid, according to three people familiar with the matter.
The company is expected to receive a counteroffer from Sony and Apollo as early as this week, according to people familiar with the situation.
Bakish has worked for Paramount and its predecessor, Viacom, for more than two decades. Redstone installed Bakish as CEO of Viacom in 2016, and he took over as head of the entire company after it merged with CBS in 2019.
But Bakish, previously seen as a Redstone loyalist, has clashed with her over the Skydance offer, which has been opposed by common shareholders who say the structure benefits her but leaves them out. Bakish had been “uncooperative” during the sale process, said a person familiar with the matter.
Bakish’s future at the company was to be determined at a board meeting on Sunday. His expected ouster would be the latest twist in a messy and long-running drama at Paramount, the famed Hollywood company behind movies and TV shows such as The Godfather, Titanic and Star Trek.
Paramount, which competes against larger rivals such as Netflix, is losing billions of dollars on its streaming service as it grapples with the long-term decline of its TV channels.
Paramount’s stock valuation has halved over the past year, to around $8 billion. USD as investors soured the company’s outlook.
David Ellison, the Skydance executive who is backed by his billionaire father, Oracle founder Larry Ellison, and private equity groups RedBird and KKR, is pursuing a complicated deal in which his company would buy National Amusements, which holds nearly 80 percent of Paramount’s voting rights. shares for DKK 2 billion Paramount then wanted to buy Skydance for 5 billion. USD in a stock trade.
Some Paramount shareholders have opposed the proposed structure of the Skydance deal and have threatened to sue if it goes through. A $26 billion bid by Apollo for Paramount was recently rejected, and since then four members of the Paramount board have withdrawn their names for re-election in June.
John Rogers, chairman and co-CEO of Ariel Investments, said on Friday that “a deal that favors Shari at the expense of the rest of us (is) extremely problematic”.
“It feels like a company in disarray,” he told the Financial Times.
Skydance has been involved in exclusive discussions with Paramount that are expected to end May 3, according to people familiar with the situation, but could be extended. Sony and Apollo sought to make their joint offer as close to the expiration date as possible, these people added. Skydance hopes to conclude negotiations in early June.
Apollo is still studying the structure of its bid and whether it will involve Legendary Entertainment, the movie studio in which it bought a partial stake in early 2022. The studio has seen a string of hits this year, including Dune: Part Twowhich has strengthened its economy.
Some analysts say an acquisition of Japan’s Sony and the Apollo deal could have trouble getting approved by regulators.
Paramount is set to report earnings after the market closes on Monday.
Ellison has had a close relationship with Paramount: Skydance has co-produced a number of hits with Paramount, including Top Gun: Maverick and Impossible missionand Ellison has expanded his studies into animation, television and sports.
Skydance’s plan is to recapitalize the company, which Ellison will lead. He would also install new management, including Jeff Shell, the former NBCUniversal executive who now works for RedBird.
Paramount and Sony declined to comment.
Paramount shares rose last fall on speculation it could be acquired, but have fallen 18 percent this year.
