Paramount Global shares fell on Tuesday after its chief executives announced a major restructuring plan that included $500 million in annual cost cuts. The company’s future remains uncertain amid talks of a possible merger with Skydance Media.
The executives — CBS President and CEO George Cheeks, Showtime/MTV Entertainment Studios President and CEO Chris McCarthy and Paramount Pictures President and CEO Brian Robbins — have led the company since previous president Bob Bakish stepped down in April amid growing tensions with Paramount’s controlling shareholder Shari Redstone.
Mr. Redstone and his co-CEOs have backed a plan to better leverage the company’s vast content base, cut costs and shore up its balance sheet, which could include asset sales and potentially a joint venture or other partnership for its Paramount+ streaming service, executives said.
“They are each experienced and respected leaders within our company and industry who have been instrumental in some of our greatest successes over the years,” she said Tuesday.
The annual meeting marked the first time the three parties had come together to publicly address investors.
The company’s shares fell more than 3% following the executive’s comments.
Like other media companies, Paramount’s fortunes have been declining as its traditional TV business declines and revenue from the streaming video services it launched to attract viewers has yet to recover.
Paramount’s market capitalization has fallen by about $18 billion since December 2019, when Redstone reunited CBS and Viacom, the two halves of his family’s media empire.
Paramount entered exclusive merger talks with Skydance Media in April but allowed that exclusivity to lapse as it considered competing non-binding proposals from Sony Pictures Entertainment and Apollo Global Management.
Under the terms of Skydance’s latest proposal, Paramount would acquire the independent studio in a stock swap valued at $4.75 billion, according to people familiar with the negotiations.
Skydance and its deal partners, RedBird Capital and KKR, will offer to inject at least $1.5 billion in new capital into Paramount to help pay down debt and to buy 40 percent of Paramount’s non-voting Class B shares at $15 a share, the sources said, asking not to be identified discussing the matter.
In a related transaction, Skydance will acquire privately held National Amusements, which owns cinemas in the U.S., U.K. and Latin America and owns 77% of Paramount’s Class A voting stock, which is controlled by the Redstone family.
The $2 billion deal gives Skydance CEO David Ellison voting control over the media giant, setting the stage for a merger.
National Amusements said it is evaluating the terms of its acquisition offer for Skydance, as well as the terms of two other acquisition offers for privately held cinema operators.
Redstone had not yet made a decision as of Monday night, according to a source familiar with the matter.
