As controlling shareholder Shari Redstone weighs bids to buy Paramount Global, the management team currently running the company laid out plans to cut costs by $500 million annually and partnerships aimed at growing the media giant’s streaming business.
Company executives noted that they could not talk about merger and acquisitions activity at the meeting, but reports suggest that a deal in which Skydance Media would buy the Redstone family holding company for $2 billion is nearly complete. Holders of Paramount’s class-B stock, which has less voting power, will also get paid for a portion of their shares.
Paramount’s three-man office of the CEO — Brian Robbins, Chris McCarthy and George Cheeks — was installed after former CEO Bob Bakish stepped down. Bakish had been seeking alternatives to Redstone’s plan to sell the company to Skydance.
Redstone said reducing costs was a Paramount concern. “This will then enable us to decrease debt, strengthen our balance sheet and continue to invest in the best-in-class content that has always been at our core,” she said.
She added that “our confidence in the office of the CEO stems from what this team has been able to accomplish with a reduced budget.”
The three executives in the office of the CEO spelled out their plans for the company as long as they’re running it in a video shown at the meeting.
They talked about Paramount’s content and how franchises and original programming has boosted Paramount Plus, which, despite losing money, has grown to be a Top 5 streaming service in the U.S., they said.
“We're incredibly proud of the success that we've driven together over the last few years, but we know we need to do more,” McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks, said. “We need to accelerate our path to profitability, and that’s why we’re hard at work on a plan that's going to do exactly that by first reducing our expenses, integrating our teams more closely and eliminating redundancies.”
Paramount also plans to take an “alternative strategy” to growing internationally and increase licensing revenue by making more content available to competitors.
“At the same time, we’re working on exploring options with both SVOD players and the leading technology platforms with the goal of forming a joint venture or a long-term strategic partnership to maximize our momentum and take advantage of our combined strength,” Robbins, said.
He added that Paramount was not talking about the bundling going on in the industry, in which companies package their streamers together to make them more appealing.
“This is a deep and expansive relationship, one that would make the most of our hit content while improving the customer offering which, together, will help reduce churn and reduce expenses, all of which will accelerate profits,” Robbins, president and CEO of Paramount Pictures and Nickelodeon, said. “And here’s the best news: We’ve already had a great deal of an inbound interest coming in and people wanted to partner with us because of the strength of that big, broad hit content.”
In addition to cost cuts, Paramount is in talks to divest some of its assets, Cheeks, president and CEO of CBS, said.
“The combination of a streaming strategy reset, cost reductions and asset sales will set us up to deliver consistent earnings growth and will return the company to investment-grade metrics over time, and we are 100% committed to executing with urgency,” he said.
At the meeting, the company’s directors were reelected and, while there were a few shareholder proposals on the agenda regarding executive pay and the use of artificial intelligence, none were approved.
