Paramount Global CEO Bob Bakish
Courtesy of Paramount Global
Paramount Global CEO Bob Bakish is officially out of the company.
The entertainment conglomerate — in the middle 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 an “Office of the CEO” running Paramount on a day-to-day basis for now. The three executives will work alongside the Paramount board and CFO Naveen Chopra.
According to Paramount’s quarterly report, Bakish will officially step down on Tuesday and has agreed to remain employed by the company through Oct. 31 as a “senior advisor.”
The dramatic change comes as Paramount is in the middle of an exclusive negotiating window with a potential buyer group consisting of David Ellison’s Skydance, RedBird Capital and KKR, with talks about a plan that would keep Paramount public, but with Skydance and RedBird executives who effectively run things and execute a new strategy.
At the same time, private equity fund Apollo has been in discussions with Sony Pictures about possibly making a joint bid in a deal that would take Paramount private in a merger with Sony and Apollo.
On the company’s earnings call, McCarthy said of working with Robbins and Cheeks that “it’s a true partnership. We have a deep respect for each other and we want to lead and lead this company together.
“On that note, we are finalizing a long-term strategic plan to best position this great company to reach new and greater heights in our rapidly changing world. The plan is focused on three pillars: First, make the most of our hit content; second, strengthen our balance; and third, optimize our streaming strategy.”
Added Robbins, “We look forward to getting back to you shortly to share our plan and discuss it all in detail at that time.”
The company did not take any questions on the call, with executives instead only delivering prepared remarks.
Bakish received a compensation package worth $31.3 million in 2023, a difficult year for the industry given the twin Hollywood strikes. He has urged his staff this year to focus on “execution” amid deal talk around the company, calling “managing costs” and earnings growth the top priority for 2024.
While Bakish has largely declined to comment on deal talk, he told analysts on the company’s fourth-quarter earnings call that he was focused on creating value for all shareholders (emphasis his), suggesting some daylight between him and Shari Redstone, Paramount’s controlling shareholder.
“Paramount Global includes exceptional assets and we strongly believe in the company’s future value creation potential,” Redstone said in a statement. “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 about what their combined leadership means for Paramount Global and for the opportunities that lie ahead.”
Wall Street analysts have said in recent weeks that Paramount has lost investors over concerns that controlling shareholder Redstone would benefit from a Skydance deal while common shareholders would be diluted.
But Wolfe Research analyst Peter Supino recently changed his rating from “underperform” to “peer perform,” while dropping the use of a stock price target. “While fundamentally there are still real risks to Paramount’s business in the form of declining linear profitability and a direct-to-consumer segment that we expect to remain unprofitable over the next few years, the increasing prospect of a sale of the business to an owner more likely to leverage Paramount’s intrinsic value outweighs short-term financial concerns,” he argued.
The ouster of the CEO comes after days of back-and-forth talk about Bakish’s future at the company and ahead of Paramount’s first-quarter earnings conference call after the market closes Monday.
Bakish has long had a reputation for being popular at Paramount due to his more collaborative management style that empowered his leaders and was open to new ideas. He was also praised for focusing on striking distribution deals that went beyond traditional pay-TV deals to include streaming, mobile and other platforms earlier than his peers. And Bakish encouraged a global mindset with local execution.
He also seemed for a long time to have a constructive relationship with Redstone, whose father, Sumner Redstone, had held the CEO title at Paramount’s predecessor CBS Corp. and Viacom to Leslie Moonves and the controversial Philippe Dauman respectively.
“I want to take a moment to thank Bob for his leadership of the company through a period of tremendous change for us and the industry,” Chopra said on the call. “Not only did Bob help navigate a number of challenges, but I am proud of everything we have accomplished and it has been my privilege to work with him.”
“With employees in limbo for years while Redstone battled Dauman and Moonves, there is no question that Bob Bakish was the right CEO to run Viacom in 2016,” LightShed Partners analyst Rich Greenfield and colleagues wrote in a report from March. “Bakish has been with Paramount and its predecessor Viacom for 27 years and played a critical role in improving Viacom’s relationship with distributors, which Dauman had largely destroyed, while significantly improving internal morale.”
But the LightShed team called for new leadership. “Unfortunately, Bakish and his management team made a critical strategic mistake in the spring of 2020, after making significant progress and shepherding the merger over the finish line in 2019, which has ultimately crippled the company financially,” they argued, talking about the creation of the streamer Paramount+ .
