Paramount Global’s controlling shareholder, Shari Redstone, has expressed confidence in the new management structure at a recent annual investor meeting despite the company’s potential sale.
Redstone hinted at further cost cuts, while executives declined to discuss ongoing sale talks with David Ellison’s Skydance Media.
Paramount’s special board committee has endorsed a deal offering investors the choice to cash out or hold shares, betting on Ellison’s ability to revitalize the media giant.
The deal still requires Redstone’s approval, who is considering selling her family’s stake in Paramount.
Meanwhile, the new “office of the CEO” — George Cheeks, Brian Robbins, and Chris McCarthy — outlined a strategy to run Paramount independently and improve its financial health.
The trio, who took over after Bob Bakish’s ouster in April, announced a plan centered on $500 million in cost cuts.
This includes layoffs, asset sales, and exploring a joint venture for the Paramount+ streaming service.
“We all agree that Paramount is not where we want it to be,” McCarthy said, emphasizing the potential to unlock significant value given the company’s assets and talent.
However, news of a potential deal with Ellison’s Skydance, joined by RedBird Capital Partners and KKR, had previously boosted the stock.
Paramount has struggled in recent years, falling behind competitors like Disney and Comcast and tech giants such as Amazon and Netflix.
Challenges have included underinvestment, management issues, shifts in audience behavior, the COVID-19 pandemic, and a costly streaming push.
Cable channels like Comedy Central, MTV, and Nickelodeon have seen declines and missed opportunities to sell assets exacerbated debt issues.
Bosses aim to reduce non-content costs, streamline the organization, and build a leaner, more agile company
Last year’s Writers Guild of America and SAG-AFTRA strikes further slowed content production.
In response, S&P Global downgraded Paramount’s credit to “junk” status and investor Warren Buffett sold shares at a loss.
During the 44-minute shareholder meeting, several investor proposals were rejected, including measures to clarify artificial intelligence use and restrictions on executive golden parachutes.
Six board members, including Redstone, were reelected.
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The cost-cutting plan follows previous asset sales, such as those of Simon & Schuster and CBS real estate.
George Cheeks highlighted the importance of transforming streaming to accelerate profitability and offset declines in the linear business.
The goal is to reduce non-content costs, streamline the organization, and build a leaner, more agile company.
Despite the challenges, Redstone expressed confidence in the new executive team.
McCarthy, Cheeks, and Robbins have been instrumental in past successes, and Redstone believes their leadership will drive improved performance.
The sweetened Ellison proposal includes $4.5 billion to buy out non-voting stockholders and a $1.5-billion cash infusion to reduce debt.
The deal, favoring Ellison over potential buyers like Sony and Apollo Global Management, would also give the Redstone family over $2 billion for their holding company and voting shares in Paramount.
