Yahoo Finance Paramount Global Co-CEOs Have Hired Bankers to Evaluate Asset Sales, Tell Employees They’ve Identified Areas for Job Cuts
Paramount Global’s trio of co-CEOs provided an update Tuesday at a town hall for the company’s more than 20,000 employees on where things stand with their plan to cut costs, boost revenue and pare down debt after a potential merger with Skydance was called off.
The three execs — George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO, Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, president and CEO of Paramount Pictures and Nickelodeon — were installed as co-CEOs after Bob Bakish’s dismissal in late April.
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At the June 25 town hall, which kicked off at 10 a.m. Pacific at the Paramount Theatre on the studio’s lot in L.A., the execs addressed a key topic of concern among the rank and file: layoffs and other measures aimed at achieving $500 million in annualized costs, which the trio laid out at the June 4 annual shareholder meeting. According to the co-CEOs, since then, they have made progress to eliminate duplicative job functions, with work well under way across corporate functions like legal and corporate marketing, sources tell Variety.
In their prepared remarks, however, the execs did not discuss timing of when mass layoffs might hit across the company or how large the cutbacks will be. During the Q&A portion of the town hall, the co-CEOs were asked if they had a timeline for job cuts but they didn’t provide one.
As the trio of execs previously disclosed, Cheeks said the Paramount leaders are “looking at selling certain Paramount-owned assets” and said, “in fact, we’ve already hired bankers to assist us in this process — and we’ll use the proceeds to help pay down debt and strengthen our balance sheet.” He didn’t itemize which Paramount Global assets may be on the block, but those could include BET Media, the VidCon creator tradeshow division and the Paramount Pictures lot.
The town hall meeting had originally been set for June 5 but the co-CEOs rescheduled it for June 25, citing “ongoing speculation regarding potential M&A.” On June 11, Shari Redstone, Paramount Global’s controlling shareholder, ended talks about merging the company with David Ellison’s Skydance Media.
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At this point, Redstone may still be looking to sell her stake in National Amusements Inc., which owns 77% of the voting shares in Paramount. Parties that have come forward to express interest in a deal for NAI have included ex-Warner Music and Seagram boss Edgar Bronfman Jr. together with Bain Capital as well as producer and filmmaker Steven Paul.
At the beginning of the town hall, Robbins spoke about the ongoing M&A chatter. “We’d like to take a moment to acknowledge the challenges of all the M&A speculation surrounding our company. We know what a difficult and disruptive period it has been,” Robbins said. “And while we cannot say that the noise will disappear, we are here today to lay out a go-forward plan that can set us up for success no matter what path the company chooses to go down.”
The co-CEOs addressed the fact that Paramount’s overall revenue grew by 13% between 2018-23 while adjusted operating income declined 61% over that period. “Let me be clear… a 61% decline in profits is simply unacceptable,” McCarthy told employees. “We need to act now to reverse this trend.”
Another key pillar of the three execs’ strategy is to boost the profitability of its Paramount+ streaming business to make up for linear declines. McCarthy told staffers that on the international front, “we are advancing talks with potential partners that will significantly transform the scale and economics of the service making it profitable and driving long-term value. This approach could also serve as a model for the U.S.”
At the June 4 shareholders meeting, Cheeks, Robbins and McCarthy provided an outline of their go-it-alone strategy. The expected job cuts will result in a “leaner and more nimble” company, Cheeks said, adding that layoffs will target “duplicative teams and functions across the organization, real estate, marketing and other corporate overhead categories.”
Tuesday’s town hall at the Paramount Theatre drew a crowd of some 500 employees, with several thousand more watching via livestream. The co-CEOs spoke for about an hour, including a Q&A session during which they fielded questions from staff after their prepared remarks.
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