With the Skydance Media deal talks dead, the three executives leading Paramount Global’s Office of the CEO said they remain focused on a cost-cutting and growth plan for the media conglomerate as a standalone entity.
The trio — George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO, Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, president and Chief Executive Officer of Paramount Pictures and Nickelodeon — addressed the current situation in a companywide memo Wednesday. On Tuesday, Shari Redstone’s National Amusements, the controlling shareholder of Paramount Global, said it had ended merger talks with Skydance because it was unable “to reach mutually acceptable terms regarding the potential transaction with Skydance Media for the acquisition of a controlling stake in NAI.”
“As you heard yesterday, the proposed transaction with Skydance Media is not moving forward. So, what does this mean for Paramount?” the execs wrote. “While the Board will always remain open to exploring strategic alternatives that create value for shareholders, we continue to focus on executing the strategic plan we unveiled last week during the Annual Shareholder Meeting, which we are confident will set the stage for growth for Paramount.”
At Paramount Global’s 2024 meeting of shareholders on June 4, the troika talked about their strategic “vision” going forward and outlined the plans as if Paramount will not be sold.
At the meeting, they spoke at a high level about how they plan to cut upwards of $500 million in costs annually through layoffs and other cost-reduction measures, pursue a joint venture with Paramount+ and potentially sell some assets (which they didn’t specify).
“To be clear, $500 million in cost savings is just the beginning,” Cheeks said, adding that the three co-CEOs expect to provide more details on the Q2 2024 earnings call in August.
The trio had planned to host a town hall June 5 to answer employee questions about the future of Paramount Global but, citing “ongoing speculation regarding potential M&A,” they rescheduled it for June 25.
“We recognize that the last several months have not been easy as we manage through ongoing change and speculation,” the three co-CEOs wrote in the memo. “And, we should all expect some of this to undoubtedly continue as the media industry and our business continue to evolve.”
On Monday (June 10), Paramount extended change-in-control severance benefits to Cheeks, McCarthy and Robbins that kick in if the company transacts a sale or merger — guaranteeing each of them severance packages of two times their annual salary plus target bonus, among other perks — and also will grant them cash bonuses for the time during which they serve as co-CEOs. Redstone gave former CEO Bob Bakish the boot on April 30, reportedly over Bakish’s clash with Redstone over pursuing the deal with Skydance.
Read the full memo from the three execs:
Hi Everyone,
As promised, we want to be as transparent as possible and share information whenever we can.
As you heard yesterday, the proposed transaction with Skydance Media is not moving forward. So, what does this mean for Paramount? While the Board will always remain open to exploring strategic alternatives that create value for shareholders, we continue to focus on executing the strategic plan we unveiled last week during the Annual Shareholder Meeting, which we are confident will set the stage for growth for Paramount.
Work is already underway, as we focus on three pillars:
• Transforming our streaming strategy to accelerate its path to profitability
• Streamlining the organization and reducing non-content costs
• Optimizing our asset mix, by divesting some of our businesses to help pay down our debt
As we advance each of these initiatives, we will continue to prioritize investment in our world class franchises, films, series and sports, which are the core of our business.
Importantly, we want to thank you for your hard work and your continued focus. We recognize that the last several months have not been easy as we manage through ongoing change and speculation. And, we should all expect some of this to undoubtedly continue as the media industry and our business continue to evolve.
As we look ahead, we are confident about what’s in store for Paramount. We believe in you and we believe in Paramount. We have the content, the people, and the right plan to ensure a strong future. And, we look forward to discussing our strategy in more detail at our Global Town Hall on June 25.
In the meantime, we hope you’re able to participate in Community Day and spend time with colleagues while giving back to local communities around the world.
Thank you again for all that you do.
Best,
George, Chris and Brian
Pictured above (l. to r.): George Cheeks, Chris McCarthy, Brian Robbins
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