Paramount Global has made a bold move by replacing CEO Bob Bakish with a trio of executives amid ongoing discussions with David Ellison's Skydance Media regarding a potential merger. The decision, announced on Monday, comes as Paramount reported better-than-expected earnings for the quarter ending in March.
The trio leading the new Office of the CEO includes CBS President and CEO George Cheeks, Paramount Pictures studio chief Brian Robbins, and Chris McCarthy, who heads Showtime, MTV, and other networks within the company. Paramount's shares saw a nearly 1% increase to $12.36 in after-hours trading following the announcement.
Paramount is currently engaged in exclusive talks with Skydance as it seeks to strengthen its streaming business amidst fierce competition from industry giants like Netflix and Walt Disney. Chris McCarthy emphasized the company's commitment to developing a long-term strategic plan to thrive in a rapidly evolving landscape.
Analysts have expressed concerns about the timing of the executive shakeup, with some questioning the decision to replace the CEO with three executives during such a critical period. Paolo Pescatore of PP Foresight described the move as appearing divisive among key stakeholders.
Bob Bakish had led the company since the 2019 merger with CBS, which formed ViacomCBS, later rebranded as Paramount Global. McCarthy highlighted the collaborative relationship among the new leaders, emphasizing their extensive history of working together.
In terms of financial performance, Paramount reported adjusted earnings per share of 62 cents for the first quarter, surpassing analysts' consensus of 36 cents. However, revenue fell slightly short of expectations at $7.69 billion. Paramount+ showed promising growth, adding 3.7 million subscribers for a total of 71 million.
As Paramount continues to navigate the streaming landscape, discussions with Skydance about a potential merger have stirred controversy among shareholders. Some have raised concerns about the deal's potential impact on their interests, urging Paramount to explore alternative suitors, including Apollo Global Management.
Recent reports suggest that concessions have been offered by both the Redstone family and Skydance in an effort to enhance the attractiveness of the proposed merger. Despite these developments, Paramount Global executives declined to take questions from analysts during the earnings call, which concluded with the theme song from the iconic Paramount movie franchise "Mission: Impossible."
Source: Reuters
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