Paramount is preparing to announce the retirement of CEO Bob Bakish as early as next week, according to three people familiar with the matter, and the sudden announcement comes even as Paramount is exploring a merger. The development was as follows.
The impending move is the result of a deterioration in relations between Mr. Bakish and the company's controlling shareholder, Shari Redstone, the people said, asking not to be identified discussing sensitive issues. Mr. Redstone had grown frustrated with his inability to get major deals across the finish line, including the sale of the Showtime and BET cable channels, people familiar with the matter said.
Mr. Bakish's position with Mr. Redstone has worsened as several Paramount executives have expressed reservations about the company's direction to board representatives in recent weeks, two people familiar with the matter said.
The company is in talks to merge with Skydance, the media company run by tech heir and Hollywood producer David Ellison. It is also negotiating lucrative deals to keep channels like Nickelodeon and MTV on the charter cable system.
Paramount's owner, National Amusements, is considering various options to replace Bakish, 60, who has led Paramount and its predecessor company Viacom since 2016 and has been with the company since 1997. . One possibility is that Paramount will be run by someone. The “CEO's Office” is led by department heads such as Brian Robbins, head of Paramount Picture Studios. George Cheeks, a top executive at CBS. and Chris McCarthy, president of entertainment and youth brands at Paramount. The company could also choose to have an acting chief executive officer.
Paramount declined to comment. The Wall Street Journal previously reported that Paramount's board of directors is considering replacing Bakish.
Like many media companies, Paramount has struggled in recent years to get its streaming business off the ground as viewership for its cable channels has declined. Paramount has been losing hundreds of millions of dollars a year on its streaming business, Paramount+, but the losses are narrowing and the company's stock price continues to fall as investors grow wary of traditional media. There is.
Because of these challenges, Paramount has long been considered a takeover target by rivals looking to expand their content libraries and maximize their leverage in cable negotiations. Things started to heat up late last year when Ms. Redstone informed the company's board of directors of Skydance's interest in Paramount, which created a special committee to consider the deal.
Paramount is currently in talks with Skydance to finalize what will be a complex deal. Ms. Redstone controls Paramount through National Amusements and has signed a potential deal. However, a special committee at Paramount would also have to approve it.
The deal being discussed would give Mr. Redstone a large dividend and Paramount shareholders a stake in the new company. This structure, coupled with the fact that private equity firm Apollo Global Management is in talks to partner with Sony in an alternative all-cash bid, has led to opposition to the sale by some shareholders.
A 30-day exclusive negotiation period between the two countries is scheduled to end in early May.
Paramount is scheduled to report earnings on Monday, putting the company in a difficult position as analysts seek an explanation for Bakish's sudden departure. Losing the chief executive is likely to raise questions from investors about how the sales process will be handled. It also could weaken Paramount's hand in these negotiations.