Paramount is preparing to announce the departure of its chief executive, Bob Bakish, as early as next week, according to three people familiar with the matter, a sudden development even as the company explores a merger.
The impending move is the result of Mr. Bakish’s deteriorating relationship with Shari Redstone, the company’s majority shareholder, the people said, asking not to be identified as they discussed a sensitive issue. Ms. Redstone became frustrated with what she saw as her inability to close major deals, including the sale of cable channels Showtime and BET, the sources said.
Two people familiar with the matter said several top Paramount executives had expressed reservations about the company’s direction to a board representative in recent weeks, further eroding Mr. Bakish’s standing with Mrs. Redstone.
The company is in talks to merge with Skydance, a media company controlled by David Ellison, the tech scion and Hollywood producer. It’s also negotiating a lucrative deal to keep channels like Nickelodeon and MTV on the Charter cable system.
National Amusements, owner of Paramount, is considering various options to replace Mr. Bakish, 60, who has led Paramount and its predecessor, Viacom, since 2016 and has been with the company since 1997. In one possibility, Paramount would be led by a ” CEO’s office” led by division heads like Brian Robbins, the head of the Paramount film studio; George Cheeks, CBS’s top executive; and Chris McCarthy, president of Paramount’s entertainment and youth brands. The company could also choose to appoint an interim CEO.
Paramount declined to comment. The Wall Street Journal earlier reported that Paramount’s board was considering replacing Mr. Bakish.
Like many media companies, Paramount has struggled in recent years to get its streaming business off the ground as audiences for its cable channels have deteriorated. Paramount loses hundreds of millions of dollars each year on its streaming business, Paramount+, although its losses have slowed and the company’s stock price has continued to fall as investors have become increasingly cautious towards traditional media.
Because of these challenges, Paramount has long been seen as an acquisition target by competitors seeking to expand their content libraries and maximize their influence in cable negotiations. Things began to heat up late last year when Ms. Redstone brought Skydance’s stake in Paramount to the company’s board, which formed a special committee to review the deal.
Paramount is currently in talks with Skydance to shape what would be a complex deal. Ms. Redstone controls Paramount through National Amusements and has signed a potential deal. But Paramount’s special committee must also give its approval.
The deal under discussion would give Ms. Redstone a big payout and shares from Paramount shareholders in a new company. This structure, along with the fact that private equity firm Apollo Global Management has discussed the possibility of partnering with Sony in an alternative all-cash offering, has led to objections to a sale of the share of certain shareholders.
A 30-day period of exclusive talks between the two sides is set to expire in early May.
Paramount also plans to report earnings on Monday, putting the company in a difficult position with analysts looking for an explanation for Mr. Bakish’s sudden departure. The loss of its chief executive will likely prompt questions from investors about how the sales process is being handled. It could also weaken Paramount’s hand in these negotiations.
News Source : www.nytimes.com
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