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Bob Bakish, president and chief government officer of Viacom, attends the fourth day of the annual Allen & Firm Solar Valley Convention, July 11, 2023 in Solar Valley, Idaho.
David A. Grogan | CNBC
Paramount World CEO Bob Bakish is stepping down, the corporate introduced Monday, as merger negotiations with Skydance Media proceed.
Bakish climbed the company ladder after becoming a member of Viacom in 1997, till he turned CEO of the corporate in 2016. Following the merger of Viacom and CBS, he turned CEO of the mixed firm in 2019, which was later renamed Paramount World. He’s additionally leaving the corporate’s board of administrators, Paramount stated Monday.
Bakish can be changed by what the corporate referred to as an “Workplace of the CEO.” Paramount will now be led by CBS president and CEO George Cheeks; Chris McCarthy, president and CEO of Showtime/MTV Leisure Studios and Paramount Media Networks; and Brian Robbins, the top of Paramount Photos and Nickelodeon. The corporate stated the three executives will work intently with Paramount CFO Naveen Chopra and the board.
Within the launch Monday, Paramount stated the brand new management is “working with the board to develop a complete, long-range plan to speed up progress and develop widespread content material, materially streamline operations, strengthen the stability sheet, and proceed to optimize the streaming technique.”
Paramount additionally reported its first-quarter earnings after the bell Monday and held an earnings name throughout which the newly appointed firm heads gave a short assertion and stated they might be again “in brief order” to share particulars on future plans.
Chopra led the decision, which lasted beneath 10 minutes and did not embrace questions from analysts.
Streaming increase
The corporate posted blended outcomes for the primary quarter, beating on earnings however lacking on income. Paramount reported 62 cents per share for the interval, excluding objects, versus estimates of 36 cents a share, based on analysts polled by LSEG. For income the corporate posted $7.69 billion versus analyst estimates of $7.73 billion, based on LSEG.
Total income was up 6% in contrast with the identical interval final 12 months, propelled by streaming and the Tremendous Bowl.
The corporate’s direct-to-consumer streaming phase, which incorporates flagship service Paramount+, Pluto TV and BET+ noticed income rise 24% to about $1.88 billion.
Paramount stated it added 3.7 million Paramount+ subscribers through the quarter, bringing the full to 71 million. Losses associated to streaming narrowed to $286 million in contrast with losses of $511 million throughout the identical interval final 12 months.
Promoting income within the streaming phase was up, largely as a result of Tremendous Bowl, which aired in February on CBS, cable TV channel Nickelodeon and Paramount+.
Equally, promoting income in Paramount’s TV media unit, which incorporates broadcaster CBS and cable TV channels equivalent to MTV and Nickelodeon, grew 14% as a result of Tremendous Bowl.
The highest NFL occasion offered a lift throughout what has been a sluggish promoting atmosphere for conventional TV networks. Nonetheless, streaming platforms and digital firms have reported promoting income progress, indicating the market is rebounding, not less than for these areas.
Total, TV Media income was up 1% to $5.23 billion. Affiliate and subscription income fell 3% as cord-cutting continued, and licensing and different income dropped 25%, together with the influence of the Hollywood writers’ and actors’ strikes on content material out there for licensing.
Income for Paramount’s filmed leisure unit elevated 3% to $605 million as a result of releases of “Imply Ladies” and “Bob Marley: One Love.”
Bakish departure
Bakish’s ouster comes as Paramount and Skydance Media inch nearer to a doable merger, CNBC beforehand reported. The businesses are in unique talks to pursue the deal till Could 3, and a particular committee is already in place.
Bakish has privately dissented in opposition to the merger, claiming it can dilute frequent shareholders, CNBC reported. As a part of the proposed deal, practically 50% of the merged firm could be owned by Skydance and its non-public fairness backers, whereas frequent shareholders would personal the rest of Paramount, which might stay publicly traded.
On Saturday CNBC reported Bakish may very well be out as CEO as quickly as Monday, and forward of the earnings name, after dropping the belief of Paramount World controlling shareholder Shari Redstone, who might see his removing as a way to speed up a Skydance deal, CNBC reported Monday.
The departure additionally comes as Paramount has been in negotiations with cable firm Constitution Communications for the carriage of its TV networks together with CBS and MTV. The deadline for these negotiations is Tuesday.
The particular committee — which is in command of accepting or rejecting transactions — and Skydance, which is backed by non-public fairness companies KKR and RedBird Capital Companions, have been narrowing in on the right way to worth Skydance’s belongings as a part of a merger, in addition to how a lot fairness so as to add to the corporate, CNBC beforehand reported.
Skydance intends to call its CEO, David Ellison, as head of Paramount if the deal occurs, CNBC beforehand reported.
— CNBC’s Alex Sherman contributed to this report.
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