Paramount Global’s co-CEOs to lay out strategy for shareholders

By Dawn Chmielewski

(Reuters) – Paramount Global’s newly appointed co-CEOs are expected to discuss their vision for the media conglomerate with shareholders on Tuesday, even as the company’s controlling shareholder evaluates merging the company with Skydance Media.

The trio of executives – George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios; and Brian Robbins, president and CEO of Paramount Pictures – have led the company since the exit of former boss Bob Bakish in April. Bakish left amid growing tensions with Shari Redstone, Paramount’s controlling shareholder.

Redstone also is expected to speak.

The company’s annual shareholder meeting will mark the first time the triumvirate publicly addresses investors as a group. They are expected to announce strategic initiatives, including their streaming strategy.

Discussions about Paramount’s future come against a backdrop of sale negotiations that could dramatically alter the company’s trajectory. In April, Paramount entered into exclusive merger talks with Skydance, but allowed that period of exclusivity to lapse as it evaluated a rival non-binding offer letter from Sony (NYSE:) Pictures Entertainment and Apollo Global Management (NYSE:).

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, the source said.

Skydance, in a related transaction, would acquire privately held National Amusements, which owns movie theaters in the U.S., U.K. 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.

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. Like other media companies, Paramount’s fortunes waned as the traditional television business declined while the streaming video service it launched to capture audiences has yet to recover lost revenue.

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.