Shari Redstone, the owner of Paramount, has faced challenges over the last decade due to the changing landscape of the media industry, including the decline of cable TV and the rise of streaming services. Bob Bakish, Paramount’s CEO, has been a loyal ally to Redstone, but their relationship deteriorated as the company struggled financially. Despite being patient with Bakish, Redstone decided to replace him with an “office of the CEO” consisting of three executives as the company considers a major merger. Paramount has been in discussions to merge with Skydance, but shareholders have raised concerns about the potential deal.
Skydance has recently sweetened its proposal to acquire Paramount by offering a $3 billion cash infusion to pay debt and buy back shares. However, it remains unclear if this will be enough to convince the special committee of board members evaluating the merger to accept the deal. The departure of Bakish has added pressure on the committee to negotiate the best deal for shareholders and may open the door for other potential bidders like Apollo and Sony. Bakish, who has been with Paramount since 1997, is entitled to a severance package of $50.6 million.
Bakish was a pioneer in offering streaming entertainment directly to consumers by creating Paramount+ and acquiring Pluto TV. His approach to negotiations with cable companies helped stabilize Viacom, Paramount’s predecessor, during a challenging period. However, Paramount’s share price has continued to decline as investors remain skeptical about the cable TV business. After more than 25 years at the company, Bakish’s departure was unceremonious, with his replacement being announced on a first-quarter earnings call.
Redstone’s relationship with Bakish deteriorated over the last year as she believed he did not move quickly enough to address the company’s financial challenges. Bakish also expressed reservations about the potential merger with Skydance, adding to the strain in their relationship. The company’s top executives, including Brian Robbins, George Cheeks, and Chris McCarthy, had misgivings about the direction of the company under Bakish’s leadership, further leading to his replacement. The shake-up in Paramount’s leadership comes as the company faces uncertainty about its future in a rapidly changing media landscape.
The departure of Bakish marks the end of an important chapter in Paramount’s history as he was instrumental in developing the company’s streaming strategy and acquiring Pluto TV. Despite his contributions, Bakish’s exit comes as Paramount continues to struggle amid the decline of the cable TV business. The company’s future remains uncertain as it considers a potential merger with Skydance and faces challenges in getting its streaming business off the ground. Shareholders, including Redstone, are evaluating different offers to determine the best path forward for Paramount.
