Paramount Board Considers CEO Ouster Amid Sale Talks

Paramount Board Considers CEO Ouster Amid Sale Talks

Paramount Global’s board is deliberating the potential ouster of CEO Bob Bakish and may place the film and television company under the interim leadership of a senior executive committee while evaluating a potential sale, according to a source familiar with the matter.

The company, parent to CBS, MTV, and other media properties, is controlled by chairwoman Shari Redstone, which means any decision to remove Bakish would require her approval. Discussions are ongoing about selling a majority stake in Paramount to Skydance Media, owned by David Ellison, with exclusive talks expected to conclude by May 3.

Paramount’s debt was downgraded to “junk” status due to declines in cable television profitability. Should Bakish be removed, the interim committee proposed would include Paramount’s film chief Brian Robbins, Chris McCarthy of Showtime/MTV, and George Cheeks, head of CBS. Charles Phillips, a board member and former president of Oracle Corp., would serve as the lead independent director.

It’s reported that Bakish might deliver a message during the company’s earnings call on April 29 but will not take questions.

The board has yet to decide Bakish’s fate, and it’s possible he may retain his position. The company has declined to comment on the matter.

Some board members have reportedly been dissatisfied with Bakish’s decisions, including rejecting offers for the company’s cable channels Showtime and BET, which could have lessened Paramount’s exposure to the traditional television industry and reduced its debt.

Paramount’s independent directors are considering a deal in which Skydance would pay over $2 billion for Redstone’s 77% voting stake in the company. Subsequently, Paramount would merge with Skydance in a deal that would give Ellison and his backers control over the combined business. This arrangement has sparked complaints from some investors, claiming it favors Redstone while diluting the stakes of other Paramount shareholders.

On an investor call in February, Bakish stated, “We are always looking for ways to create value for shareholders. And to be clear, that is for all shareholders.”

Paramount shares have fallen about 19% this year as investors expressed their dissatisfaction with the potential terms of a deal with Ellison. On Friday, Matrix Asset Advisors sent a letter to the board urging them to reject Ellison’s offer and consider other options. This was the second letter the investor sent to the company this month.

Paramount shares dropped 2.2% to $11.91 at the close on Friday in New York. Other potential suitors for Paramount include Apollo Global Management Inc. and Sony Group Corp., who are considering a joint bid for the company.

In a letter to their fund investors, Ariel Investments co-CEOs John Rogers and Mellody Hobson expressed concern about the impending departures of four board members and the lack of explanation from the company. They also voiced concerns about reports that Ellison would buy out Redstone’s stake at a premium and then merge his company with Paramount in a way that dilutes other investors.

“In our opinion, it is unacceptable for a majority shareholder to benefit at the expense of everyone else,” they wrote.

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