With Skydance Media deal talks winding down, the three top executives in Paramount Global’s CEO’s office said they remain focused on a plan to cut costs and grow the media conglomerate as an independent entity.
The trio – George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO, Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, the president and chief executive of Paramount Pictures and Nickelodeon — addressed the current situation in a company memo Wednesday. On Tuesday, Shari Redstone’s National Amusements, the controlling shareholder of Paramount Global, said it had ended merger talks with Skydance because it was unable to “reach mutually acceptable terms regarding the potential transaction with Skydance Media for the acquisition of a controlling interest in NAI.
“As you heard yesterday, the proposed transaction with Skydance Media is not moving forward. So what does this mean for Paramount?” the leaders wrote. “While the Board will always remain open to exploring strategic alternatives that create value for shareholders, we remain focused on implementing the strategic plan we unveiled last week during the Annual Meeting of Shareholders, which we are confident will set the stage for for growth for Paramount. ”
SEE ALSO: After Paramount merger talks collapse, Skydance CEO David Ellison tells staff: ‘We’re stronger because of this process’
At the Paramount Global 2024 shareholder meeting on June 4, the troika talked about their strategic “vision” going forward and outlined plans as if Paramount is not going to be sold.
At the meeting, they talked at a high level about how they plan to cut more than $500 million in costs annually through layoffs and other cost-cutting measures, pursue a joint venture with Paramount+ and potentially sell some assets. (which they did not specify).
“To be clear, the $500 million in cost savings is just the beginning,” Cheeks said, adding that the three co-CEOs expect to provide more details on the second-quarter 2024 earnings call in August.
The trio had planned to hold a June 5 town hall to answer employee questions about Paramount Global’s future, but, citing “continued speculation regarding potential M&A,” rescheduled it for June 25 .
“We understand that the last few months have not been easy as we cope with constant changes and speculation,” the three co-CEOs wrote in the memo. “And, we should all expect that some of that will undoubtedly continue as the media industry and our business continue to evolve.”
On Monday (June 10), Paramount extended change-of-control benefits to Cheeks, McCarthy and Robbins that kick in if the company completes a sale or merger — guaranteeing each a severance package of twice their annual salary plus a target bonus. among other benefits — and will also give them cash bonuses for the time they serve as co-CEOs. Redstone gave former CEO Bob Bakish the boot on April 30, reportedly over Bakish’s clash with Redstone over pursuing the Skydance deal.
Read the full note from the three executives:
Hello to everyone,
As promised, we want to be as transparent as possible and share information whenever we can.
As you heard yesterday, the proposed transaction with Skydance Media is not moving forward. So what does this mean for Paramount? While the Board will always remain open to exploring strategic alternatives that create value for shareholders, we remain focused on implementing the strategic plan we unveiled last week during the Annual Meeting of Shareholders, which we are confident will set the stage for growth for Paramount.
Work is already underway, as we focus on three pillars:
• Transforming our broadcast strategy to accelerate its path to profitability
• Organization growth and reducing non-content costs
• Optimizing our asset mixdivesting some of our businesses to help pay down our debt
As we advance each of these initiatives, we will continue to prioritize investments in our world-class franchises, films, series and sports, which are the core of our business.
Most importantly, we want to thank you for your hard work and continued focus. We understand that the last few months have not been easy as we cope with the constant changes and speculation. And, we should all expect some of that to undoubtedly continue as the media industry and our business continue to evolve.
As we look ahead, we’re confident about what Paramount has in store. We believe in you and we believe in Paramount. We have the right content, people and plan to ensure a strong future. And, we look forward to discussing our strategy in more detail at the Global Town Hall on June 25.
In the meantime, we hope you are able to participate in Community Day and spend time with colleagues giving back to local communities around the world.
Thanks again for all you do.
The best,
George, Chris and Brian
Pictured above (l. to r.): George Cheeks, Chris McCarthy, Brian Robbins