Paramount Global ousted chief Bob Bakish as the media conglomerate’s future hangs in the balance

Paramount Global ousted chief Bob Bakish as the media conglomerate’s future hangs in the balance

Paramount Global on Monday parted ways with its chief executive, Bob Bakish, in a seismic move that sent reverberations through the media conglomerate as it actively engaged in acquisition talks with Skydance Media.

In place of Bakish, who has led the company since controlling shareholder Shari Redstone reunited Viacom and CBS Corporation under one roof in 2019, will be three leaders: Brian Robbins, chief executive of Paramount Pictures; Chris McCarthy, chief executive of Showtime and MTV Entertainment Studios; and George Cheeks, chief executive of CBS.

“The board and I are grateful to Bob for his many contributions throughout his long career, including in the formation of the combined company and his successful efforts to rebuild the great culture that Paramount has long been known for. We wish him the best,” Redstone said in a statement.

The three-leader team will guide the company in the interim as Paramount’s board negotiates a deal with Skydance, led by David Ellison, son of billionaire Larry Ellison, ending the Redstone family’s control of the company, which has produced blockbuster franchises including “Top Gun,” Star Trek” and “Transformers.”

Relations between Redstone and Bakish have cooled in recent months, people familiar with the matter told CNN. Redstone and other board members took issue with Bakish’s strategic decisions, including not picking up premium cable channel Showtime and making a deal to sell BET.

Bakish’s critical view comes as Paramount, with its heavy reliance on its cable television business, finds it increasingly difficult to maintain profitability amid the industry’s rapid shift to streaming. Shares of Paramount (PARA) stock have fallen nearly 50% over the past year.

While legacy media companies have struggled mightily in recent years, Paramount, with its broad portfolio of cable channels including Nickelodeon, MTV and Comedy Central, is particularly vulnerable to changing consumer habits with millions of people ditching cable each year for services like Netflix.

In an effort to stave off declining cable revenue, Paramount has spent billions of dollars building its own streaming service, Paramount+. But like other legacy media company platforms, it has struggled to gain the traction it needs to make up for linear losses. Part of the challenge for Paramount is that its content library isn’t deep enough to persuade enough customers to buy monthly subscriptions in what has become a crowded space. On Monday, the company reported its paid subscriber base had grown to 71.2 million subscribers.

Backers of the Skydance deal hope Paramount’s merger with Ellison’s company will change its fortunes. Skydance has pledged to invest heavily in the combined company, putting in at least $3 billion in cash to pay down debt and buy stock, a person familiar with the matter told CNN.

Skydance made its “best and final” offer to Paramount on Sunday, the person said. The deal values Skydance at about $5 billion.

The offer is intended to appease shareholders who have expressed concerns with the deal on the table. Those shareholders have argued that the deal primarily benefits Redstone and they have encouraged Paramount’s board to evaluate other options. The offer from Skydance would see the company buy most of Paramount’s stock at a premium, people familiar with the matter said.

If approved, Paramount’s executive committee will then lead the company until the deal is completed and a new permanent leadership team will take the helm. Besides Ellison, the likely top executive for the combined Paramount-Skydance company is Jeff Shell, the former chief executive of NBCUniversal who was fired last year after sexual harassment claims were filed against him.