(Reuters) -Paramount Global’s top executives on Tuesday laid out a sweeping restructuring plan that includes $500 million in annualized cost cuts, potential asset sales and a possible joint venture or other partnerships for its Paramount+ streaming service.
Like other media companies, Paramount’s fortunes has waned as the traditional television business declined while the streaming video service it launched to capture audiences has yet to recover lost revenue.
The executives – CBS President and CEO George Cheeks; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios; and Paramount Pictures President and CEO Brian Robbins, – have led the company since the exit of former boss Bob Bakish in April, who left amid growing tensions with Shari Redstone, Paramount’s controlling shareholder.
Redstone endorsed the co-CEOs and their plan to better capitalize on the company’s wealth of content and reduce costs to strengthen its balance sheet.
“They are each experienced, respected leaders within our company, in our industry, and they have been behind our biggest successes for years,” she said on Tuesday.
The annual shareholder meeting was the first time the triumvirate publicly addressed investors as a group.
The company’s shares fell 1.9% in early trading following the executives’ remarks.
Paramount has shed about $18 billion in market value since December 2019, when Redstone reunited two halves of the family’s media empire, CBS and Viacom.
In April, Paramount entered into exclusive merger talks with Skydance Media, but allowed that period of exclusivity to lapse as it evaluated a rival nonbinding offer letter from Sony Pictures Entertainment and Apollo Global Management.
Under the terms of the latest offer from Skydance, Paramount would acquire the independent studio in an all-stock transaction valued at $4.75 billion, according to one person familiar with the negotiations. Skydance and its deal partners, RedBird Capital and KKR, would infuse Paramount with at least $1.5 billion in fresh capital to be used to pay down debt, and offer to purchase 40% of Paramount’s nonvoting class B stock at $15 a share, said the source, who spoke on condition of anonymity.
In a related transaction, Skydance would acquire privately held National Amusements, which owns movie theaters in the U.S., the UK and Latin America, and holds 77% of Paramount’s class A voting stock, representing the Redstone family’s controlling interest in the company.
That $2 billion deal would give Skydance CEO David Ellison voting control over the larger media company, setting the stage for the merger.
National Amusements has said it is reviewing terms of the Skydance offer, as well as two other bids for the privately held movie theater operator. As of Monday night, Redstone had not reached a decision, according to a source familiar with the matter.
(Reporting by Dawn Chmielewski in Los Angeles; Additional reporting by Noel Randewich in San Francisco; Editing by Chris Reese and Jonathan Oatis)
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