By | October 27, 2023
Paramount CEO Bob Bakish could be out next week

Paramount is preparing to announce the departure of its CEO, Bob Bakish, as soon as next week, according to three people with knowledge of the matter, a sudden development even as the company explores a merger.

The impending move is a result of Bakish’s deteriorating relationship with Shari Redstone, the company’s controlling shareholder, the people said, asking not to be identified discussing a sensitive matter. Redstone grew frustrated with what she saw as his inability to get key deals across the finish line, including a sale of cable channels Showtime and BET, the people said.

Two people familiar with the matter said several of Paramount’s top executives had expressed reservations about the company’s direction to a board representative in recent weeks, further eroding Mr. Bakish’s position with Redstone.

The company is in talks to merge with Skydance, a media company controlled by David Ellison, the technology and Hollywood producer. It is also negotiating a lucrative deal to keep channels like Nickelodeon and MTV on the Charter cable system.

National Amusements, Paramount’s owner, is considering various options to replace Mr. Bakish, 60, who has led Paramount and its predecessor, Viacom, since 2016 and has worked at the company since 1997. In one possibility, Paramount would be run by an “office of the CEO” led by division heads such as Brian Robbins, the head of Paramount’s film studio; George Cheeks, the top executive of CBS; and Chris McCarthy, president of Paramount’s entertainment and youth brands. The company can also choose to put an acting CEO in place.

Paramount declined to comment. The Wall Street Journal previously reported that Paramount’s board was considering replacing Mr. Bakish.

Like many media companies, Paramount has struggled in recent years to get its streaming business off the ground as audiences for its cable channels have declined. Paramount loses hundreds of millions of dollars annually on its streaming business, Paramount+, although its losses have eased and the company’s stock price has continued to fall as investors have grown wary of traditional media.

Because of these challenges, Paramount has long been considered an acquisition target by rivals looking to expand their content libraries and maximize their leverage in cable negotiations. Things began to heat up late last year when Redstone referred Skydance’s interest in Paramount to the company’s board, which formed a special committee to consider the deal.

Paramount is now deep in talks with Skydance to shape what would be a complex deal. Redstone controls Paramount through National Amusements and has signed a potential deal for his stake. But Paramount’s special committee must also sign off on a deal for the company.

The deal being discussed would give Ms. Redstone a big payout and Paramount shareholders in a new company. That structure, along with the fact that private equity firm Apollo Global Management has been talking about collaborating with Sony in an alternative cash bid, has led to objections to a sale by certain shareholders.

A 30-day period of exclusive talks between the two sides will expire in early May.

Paramount also plans to report earnings on Monday, putting the company in a tricky spot with analysts who will seek an explanation for Mr. Bakish’s sudden departure. Losing its chief executive is likely to invite questions from investors about how the sale process is being handled. It could also weaken Paramount’s hand in these negotiations.

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