Apr 29, 2024 - Business

Bakish out as Paramount CEO, with deal talks simmering

Paramount Global CEO Bob Bakish

Bob Bakish. Photo: Kevin Dietsch/Getty Images

Bob Bakish is stepping down as Paramount Global's CEO, a move that comes as the company negotiates a major deal with film and TV studio Skydance Media.

Why it matters: Bakish's resistance to the Skydance deal was a source of friction with controlling shareholder Shari Redstone, sources told Axios, and his exit may allow those talks to escalate.

Zoom in: Paramount, owner of CBS, MTV and Nickelodeon, said on Monday that the company has established an Office of the CEO, consisting of three senior company executives:

  • 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.
  • Cheeks, McCarthy and Robbins will work closely with Naveen Chopra, CFO, and the board, the company said.
  • Paramount has been on shaky financial ground under Bakish's leadership, which has complicated Redstone's efforts to stabilize the business.

Zoom out: Shares in the company, which includes its movie studio and library that includes "Titanic" and "The Godfather," have fallen nearly 70% since Viacom and CBS merged in late 2019.

  • Paramount's streaming efforts remain unprofitable and its linear channels are losing ad dollars and viewers.

Catch up quick: National Amusements, the Redstone family business that controls 80% of Paramount's voting power, began talking with Skydance back in December.

  • Paramount is now in exclusive talks with Skydance about a complex deal that would see a merged company led by CEO David Ellison.
  • Skydance is funding the deal with help from Skydance investors, including RedBird Capital and KKR.
  • The original framework of the Skydance deal drew immediate pushback from Paramount Class B shareholders who said the offer would enrich Redstone and leave them holding the bag.
  • Skydance is now offering to buy some Paramount Class B shares at a premium. Redstone is moving toward letting non-voting shareholders "have a say on whether any transaction should be approved," Bloomberg reported Sunday.
  • Skydance made its best and final offer last week, a source confirmed to Axios. Its exclusive window to negotiate with Paramount is set to expire Friday.

Between the lines: RedBird executives, including former NBCU chief Jeff Shell and former CNN chief Jeff Zucker, are expected to lead the combined company, along with CEO Ellison, the son of Oracle founder Larry Ellison.

Meanwhile, private equity giant Apollo has made multiple bids for Paramount assets and is talking with Sony about teaming up on a new bid should the exclusive window expire.

  • Apollo is pursuing a takeover of all of Paramount Global.
  • The Skydance deal would allow Redstone to keep the company intact, according to a source familiar with the deal, a key factor behind her favoring that transaction over Apollo's.

The big picture: The relationship between Bakish, Redstone and the Paramount board had deteriorated over the past year.

  • One piece of tension came from Bakish being against the Skydance deal in fear it would dilute shareholders too much, a source said.
  • Another pain point: lingering resentment from the board that Bakish failed to sell Showtime and BET, the source added.

Context: Bakish had been with the company since 1997, when it was known as Viacom. He took over as Viacom's CEO in 2016 and kept the role after Viacom and CBS were reunited in 2019.

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