Paramount CEO Bob Bakish is stepping down, to be replaced by 3 executives

By Bill Peters

Amid reported merger talks, media giant doesn't take questions during earnings call, which lasted less than nine minutes and ended with a recording of the 'Mission Impossible' theme

Media and entertainment giant Paramount Global on Monday said that Chief Executive Bob Bakish was stepping down and would be replaced by a three-person office intended to help "materially streamline operations."

The announcement follows reports of Bakish's potential ouster and his opposition to a possible merger between Paramount (PARA) and Skydance Media, the company behind films like "Top Gun: Maverick" and some films in the "Mission: Impossible" franchise. And it came on the same day that Paramount reported mixed first-quarter results, amid the industry's broader retrenching.

The company did not take questions during its earnings call, which lasted less than nine minutes and ended with a recording of the "Mission Impossible" theme song. Shares ticked 0.4% higher after hours on Monday.

Paramount - which among other things oversees CBS, Comedy Central, Paramount Pictures and streaming service Paramount+ - said that Bakish would step down from the role of chief executive and from the company's board. The company said it had formed an Office of the CEO in his place.

That new office is made up of George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, president and CEO of Paramount Pictures and Nickelodeon.

The three will work closely with Paramount's board and its chief financial officer, Naveen Chopra, to "develop a comprehensive, long-range plan to accelerate growth and develop popular content, materially streamline operations, strengthen the balance sheet and continue to optimize the streaming strategy," Paramount said in a statement.

The announcement closes out the tenure of Bakish, who joined Viacom in 1997 and became that company's chief executive in 2016. He eventually became the chief executive of the combined company when Viacom merged with CBS in 2019, forming the company now known as Paramount Global.

But Paramount, like its peers, has struggled at times to keep investors happy. The entertainment industry has consolidated, laid off employees and taken a more cautious approach to new films and TV shows as investors seek a firmer path to profit growth within streaming. In the wake of last year's writers and actors strikes, TV production has been slow to return. Shares of Paramount have fallen 47.7% over the past 12 months.

Speculation had grown about Bakish's possible departure as Paramount reportedly holds exclusive merger talks with Skydance. The exclusivity window on those talks ends on May 3, according to reports.

CNBC reported that Bakish was opposed to the merger with Skydance, arguing that it would be detrimental to shareholder value. The news outlet said Bakish would not be on Monday's first-quarter earnings call. It also said that Shari Redstone, whose company National Amusements controls most of Paramount's shareholder voting power, had lost confidence in Bakish.

"I have tremendous confidence in George, Chris and Brian," Redstone said in a statement Monday, referring to the three executives in the new Office of the CEO.

"They have both the ability to develop and execute on a new strategic plan and to work together as true partners," she said. "I am extremely excited for what their combined leadership means for Paramount Global and for the opportunities that lie ahead."

Paramount on Monday reported a first-quarter net loss of $544 million, or 87 cents a share, compared with a loss of $1.12 billion, or $1.74 a share, in the same quarter last year.

Adjusted for cutbacks in programming and severance costs related to layoffs, Paramount (PARA) earned 62 cents a share. That was better than FactSet estimates for 35 cents a share.

Revenue rose to $7.69 billion from $7.27 billion in the prior-year quarter. The sales figure was below expectations for $7.73 billion.

Paramount+ increased revenue by 51% and hit more than 71 million global subscribers, helped by the NFL and the Super Bowl. Total advertising revenue rose 17%.

Chopra, in Paramount's earnings release, said that CBS benefited from sports programming and the return of a delayed fall television slate.

"The team delivered another quarter of strong operational and financial performance - including significant growth in total company earnings and free cash flow - despite the dynamic environment we continue to operate in," Chopra said in Paramount's earnings release.

During the call, both Cheeks and Chopra acknowledged Bakish's departure.

"I'd like to take a moment to thank Bob for his leadership of the company through a period of immense change for us and the industry," Chopra said. "Not only did Bob help navigate a number of challenges, but I'm proud of all we've accomplished, and it's been my privilege working together with him."

-Bill Peters

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04-29-24 2053ET

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