A view of the Paramount Studios water tank as SAG-AFTRA members walk the picket line outside during their ongoing strike, in Los Angeles, California, USA, September 26, 2023.
Mario Anzuoni | Reuters
The current leadership of Paramount Global presented a future plan at the company's annual shareholder meeting on Tuesday in the event that a sale of the company does not occur.
CBS CEO George Cheeks, Paramount Media Networks CEO Chris McCarthy, and Paramount Pictures CEO Brian Robbins (collectively, the company's “Office of the CEO”) established strategic priorities, including exploring streaming joint venture opportunities with other media companies, eliminating $500 million in costs. and divest from non-strategic assets.
The presentation comes at an awkward time. Earlier this week, Paramount agreed to outline merger terms with a consortium comprised of David Ellison's Skydance Media and private equity firms RedBird Capital and KKR, CNBC reported Monday. The deal is still awaiting approval from Paramount's majority shareholder, Shari Redstone, owner of National Amusements, which owns 77% of Paramount's class A shares.
Redstone has supported the “Office of the CEO” leadership team that has run the company since former CEO Bob Bakish resigned in late April.
The plan that Paramount Global shareholders will hear on Tuesday will essentially serve as Redstone's fallback option if it decides not to sell.
Strategies are being laid out with a view to reducing Paramount's debt and returning the company to an investment grade rating. Earlier this year, the company's credit rating with S&P Global Ratings was downgraded to junk status.
Paramount had approximately $14.6 billion in long-term debt as of March 31.
Paramount shares fell about 2% in early trading Tuesday.
At the beginning of Tuesday's presentation, Redstone highlighted the unorthodox structure of the CEO's office.
During their presentation, each executive noted that their future plans would emphasize content and franchise growth, but with a focus on cutting expenses and reducing debt.
“We will be thoughtful about how we deploy capital, with our world-class content being the priority,” Robbins said during Tuesday's presentation.
Cheeks said Tuesday that the company is “prepared to move rapidly on cost reduction,” which will focus on “duplicated teams and functions across the organization, real estate, marketing and other broad corporate categories.”
“To be clear, $500 million in cost savings is just the beginning,” Cheeks said, adding that more details, including the timeline, will be provided on the company's upcoming earnings conference call in August.
Cheeks added that they will explore several strategic initiatives that help “optimize the asset mix and use proceeds to pay down debt.”
On Tuesday, Robbins said the company has been “aggressively exploring all options” when it comes to partnerships with other streaming services. He noted that Paramount has already received “strong interest” from other potential streaming partners for a joint venture that would include the company's flagship service, Paramount+, which has more than 70 million subscribers but continues to lose money.
“Let me be clear: We are not talking about marketing packages. This is a deep and expansive relationship,” Robbins said.
The company is also open to more content licensing, he said.
McCarthy said Paramount is also weighing the possibility of selling assets.
