Paramount Global is reportedly considering getting rid of its longtime CEO Bob Bakish and replacing him with a group of executives as the entertainment giant moves closer to a deal with Skydance Media.
Bakish, who has privately criticized the company’s discussions of a merger with Skydance, would be replaced on an interim basis by a “CEO office” made up of the company’s division heads, the Wall Street Journal reported Friday .
No decision has been made on the future of Bakish, who may remain in place, but the speculation comes at a pivotal time for the conglomerate, controlled by media heiress Shari Redstone through her family business National Amusements.
Paramount – home to Showtime, CBS, MTV, film studio Paramount Pictures and streaming service Paramount+ – has worked out details of a merger with Skydance that it hopes to finalize next month, sources told CNBC.
But Redstone and some board members have “soured” about Bakish, the Journal said, adding that they questioned whether the CEO had pursued strategic opportunities for the company “aggressively enough,” including a potential sale of the Showtime channel.
Special committee spokespeople for Paramount Global, Paramount Global and Skydance declined to comment.
Bakish, who was considered Redstone’s right-hand man, was named CEO of Viacom in 2016.
He was elevated to the top job after his late father, Sumner Redstone, merged the company with CBS in 2019.
Its critics have pointed to the erosion of Paramount’s television business, its loss-making streaming business and its debt-laden balance sheet.
The Journal said Redstone blamed Bakish for the difficult situation the company finds itself in and what it sees as missed opportunities to strike strong deals.
Sources close to Redstone said the mogul was willing to sell premium channel Showtime, home to “Billions,” Dexter” and “Yellowjackets,” but that Bakish had turned down offers — even rejecting a $3 billion offer from former Showtime CEO David Nevins last year. Instead, Bakish integrated Showtime and its content into Paramount+
Bakish’s supporters disagree, saying the executive put the company on the map with streaming through its Paramount+ launch, the acquisition of Pluto TV, an ad-supported TV streaming service, as well as maintaining CBS’ strong position in the industry, among other things.
Paramount’s market value fell to $8.4 billion from $25.3 billion in 2019.
Bakish’s removal could add even more chaos to an already turbulent time for Paramount as it explores a merger deal with Skydance, led by David Ellison, son of Oracle co-founder Larry Ellison.
Paramount’s special bid committee and Skydance are studying how to value Skydance’s assets, as well as how much equity to add to the company in a recapitalization, they said Friday. sources at CNBC.
Privately held Skydance would be valued at $5 billion and would merge with Paramount, sources told the outlet. The independent studio has produced blockbusters for Paramount like “Mission: Impossible – Dead Reckoning” and “Top Gun: Maverick.”
Ellison, along with private equity firms KKR and Redbird, plan to raise about $4.5 billion to $5 billion in new equity capital, the sources said.
Of that, about $2 billion would be used to buy Redstone and another substantial portion would be used to pay down debt, the sources said.
The two companies are engaged in exclusive negotiations that expire on May 3, but Skydance is seeking an extension because Paramount was slow to provide data during due diligence, CNBC reported.
If the companies pull off a merger, Ellison will be named CEO of Paramount Global and former NBCUniversal CEO Jeff Shell as chairman, CNBC said.
This leaves no future for Bakish in the company.
Skydance, meanwhile, is calling on all the press to get the deal done before the exclusivity window closes. Investment firm Apollo Global and Sony are reportedly waiting in the wings after discussing a partnership to buy out all of Paramount Global.
CNBC said Paramount’s special committee had not received “concrete details of this offer and did not consider it a competitive offer for Skydance’s interests.”
The committee has details on Apollo’s initial $26 billion offer, which was rejected by Paramount’s board over concerns about Apollo’s financing, The Post previously reported.
CNBC said Paramount’s board preferred Skydance’s offer over Apollo’s, in part because it offered shareholders future growth potential by keeping the company public with a cleaner balance sheet.
But Bakish privately opposed the Skydance deal because it dilutes common shareholders, CNBC reported, citing unnamed sources familiar with the matter.
The Journal added that Bakish had quietly pursued other deal discussions, even as Redstone moved forward with negotiations with Skydance.
One of those deals included a potential streaming partnership with Comcast, parent company of NBCUniversal, without keeping Redstone or the board informed, the Journal said.
Bakish and Comcast had discussed a possible joint venture between Paramount+ and Comcast’s streamer Peacock, the Journal reported in February.
Meanwhile, several shareholders – including Mario Gabelli whose company, thanks to its super voting shares and Paramount common stock, is the second-largest voting shareholder after Redstone – are also hoping that the Skydance deal will will collapse.
They argue that this gives Redstone a massive premium for controlling shares of Redstone while leaving common shareholders out.
Under the terms of the Paramount-Skydance merger, nearly 50% of the company would be owned by Skydance and its private equity partners, CNBC reported on April 5.
The rest of the company would be owned by common shareholders and the company would continue to be publicly traded.
Gabelli told the Post he would prefer to see Paramount walk away from all negotiations.
“There’s no question that I would prefer that there be no sale,” Gabelli told the Post two weeks ago, adding that he would prefer to see Bakish stick to his turnaround strategy.
New York Post
