Bob Bakish, chairman and CEO of Viacom, attends the fourth day of the annual Allen & Company Sun Valley Conference July 11, 2023 in Sun Valley, Idaho.
David A. Grogan | CNBC
Paramount Global CEO Bob Bakish steps down, the company announced on Mondayas merger negotiations with Skydance Media continue.
Bakish worked his way up the corporate ladder after joining Viacom in 1997, until he became the company’s CEO in 2016. After Viacom and CBS merged, he became CEO of the combined company in 2019, which was later renamed Paramount Global. He is also stepping down from the company’s board, Paramount said Monday.
Bakish will be replaced by what the company called the “Office of the CEO.” Paramount will now be led by CBS chairman and CEO George Cheeks. Chris McCarthy, chairman and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, the head of Paramount Pictures and Nickelodeon. The company said the three executives will work closely with Paramount CFO Naveen Chopra and the board.
In the release Monday, Paramount said the new leadership is “working with the board to develop a comprehensive, long-term plan to accelerate growth and develop popular content, substantially streamline operations, strengthen the balance sheet and continue to optimize the flow strategy. “
Paramount also reported the first quarter earnings after the bell on Monday and held an earnings call in which the company’s newly appointed chiefs gave a brief statement and said they would return “shortly” to share details about future plans.
Chopra led the call, which lasted less than 10 minutes and did not include questions from analysts.
Flow enhancement
The company posted mixed results for the first quarter, beating earnings but missing revenue. Paramount reported 62 cents a share for the period, excluding items, compared with estimates of 36 cents a share, according to analysts polled by LSEG. For revenue, the company posted $7.69 billion versus analyst estimates of $7.73 billion, according to LSEG.
Total revenue was up 6% compared to the same period last year, driven by streaming and the Super Bowl.
The company’s direct-to-consumer streaming division, which includes flagship services Paramount+, Pluto TV and BET+, saw revenue rise 24% to about $1.88 billion.
Paramount said it added 3.7 million Paramount+ subscribers during the quarter, bringing its total to 71 million. Flow-related losses narrowed to $286 million compared to losses of $511 million in the same period last year.
Advertising revenue in the streaming segment increased, primarily due to the Super Bowl, which aired in February on CBS, cable channel Nickelodeon and Paramount+.
Likewise, advertising revenue at Paramount’s TV media unit, which includes the CBS television network and cable channels such as MTV and Nickelodeon, rose 14% due to the Super Bowl.
The NFL’s premier event has given a boost to what has been a subdued advertising environment for traditional television networks. However, streaming platforms and digital companies have reported growth in ad revenue, indicating that the market is rebound, at least for these areas.
Overall, TV Media revenue rose 1% to $5.23 billion. Affiliate and subscription revenue fell 3% as cord-cutting continued, and licensing and other revenue fell 25%, including the impact of the Hollywood writers’ and actors’ strikes on content available for licensing.
Revenue for Paramount’s motion picture entertainment unit rose 3 percent to $605 million due to the releases of “Mean Girls” and “Bob Marley: One Love.”
Departure Bakish
Bakish’s ouster comes as Paramount and Skydance Media inch closer to a potential merger, CNBC previously reported. The companies are in exclusive talks to extend the deal until May 3 and a special committee has already been set up.
Bakish has privately argued against the merger, arguing it would dilute common shareholders, CNBC reported. As part of the proposed deal, nearly 50% of the combined company will be owned by Skydance and its private equity backers, while common shareholders will own the remainder of Paramount, which will remain publicly traded.
On Saturday, CNBC reported that Bakish could step down as CEO as early as Monday, and before the earnings announcement, after losing the confidence of Paramount Global shareholder Shari Redstone, who could see the removing him as a means of speeding up a Skydance deal, CNBC reported. Monday.
The departure also comes as Paramount is in negotiations with cable company Charter Communications to carry its television networks, including CBS and MTV. The deadline for these negotiations is Tuesday.
The special committee — which is responsible for accepting or rejecting transactions — and Skydance, which is backed by private equity firms KKR and RedBird Capital Partners, have narrowed down how to value Skydance’s assets as part of a merger, as well as how much equity they should add to the company, CNBC previously reported.
Skydance plans to name its CEO, David Ellison, as head of Paramount if the deal goes through, CNBC previously reported.
— CNBC’s Alex Sherman contributed to this report.