Paramount expected to fire CEO Bob Bakish after clash with Shari Redstone

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Paramount is preparing to fire its chief executive Bob Bakish, adding even more uncertainty within the Shari Redstone-controlled Hollywood group as it holds merger talks with Skydance Media and prepares for another potential bid, according to three people close to the file.

The company is expected to receive a counteroffer from Sony and Apollo as early as this week, according to people familiar with the matter.

Bakish has worked for Paramount and its predecessor, Viacom, for more than two decades. Redstone named Bakish as CEO of Viacom in 2016, and he took over leadership of the entire company after its merger with CBS in 2019.

But Bakish, previously seen as a Redstone loyalist, clashed with her over Skydance’s bid, which was opposed by common shareholders who say its structure benefits him but leaves them out. Bakish was “uncooperative” during the sale process, a person familiar with the matter said.

Bakish’s future with the company was to be determined Sunday at a board meeting. His expected ouster would be the latest twist in a complicated and protracted drama within Paramount, the famous Hollywood company behind films and television shows such as The Godfather, Titanic And Star Trek.

Paramount, which competes with larger rivals such as Netflix, is losing billions of dollars on its streaming service while battling the long-term decline of its television channels.

Paramount’s stock valuation has halved over the past year, to about $8 billion, as investors have soured on the company’s prospects.

Skydance CEO David Ellison, backed by his billionaire father, Oracle founder Larry Ellison, and private equity groups RedBird and KKR, is pursuing a complex deal in which his company would buy National Amusements, which owns nearly of 80 percent of Paramount’s voting rights. shares, for 2 billion dollars. Paramount would then acquire Skydance for $5 billion in a stock transaction.

Some Paramount shareholders have spoken out against the proposed structure of the Skydance deal and threatened legal action if the deal goes through. A $26 billion all-cash offer from Apollo for Paramount was rejected recently, and since then, four Paramount board members have withdrawn their candidacy for re-election in June.

John Rogers, chairman and co-CEO of Ariel Investments, said Friday that “a deal that favors Shari over the rest of us (is) extremely problematic.”

“It looks like a business in disarray,” he told the Financial Times.

Skydance is engaged in exclusive discussions with Paramount that are expected to end on May 3, according to people familiar with the matter, but which could be extended. Sony and Apollo were seeking to submit their joint offer as close to that expiration date as possible, these sources 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 acquired a partial stake in early 2022. The studio has enjoyed a string of successes this year, including Dune: part twowhich strengthened its finances.

Some analysts say an acquisition by Japan’s Sony and Apollo could have difficulty being approved by regulators.

Paramount is expected to report earnings after the market close on Monday.

Ellison has enjoyed a close relationship with Paramount: Skydance has co-produced a number of hits with Paramount, including Top Gun: Maverick And Impossible missionand Ellison expanded his studio into animation, television and sports.

Skydance’s plan is to recapitalize the company, which Ellison would run. It would also install new management, including Jeff Shell, the former NBCUniversal executive who now works for RedBird.

Paramount and Sony declined to comment.

Paramount’s shares rose last fall on speculation that it might be acquired, but are down 18 percent this year.