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Paramount co-CEOs outline long-term vision amid rumours of imminent sale

L-R: George Cheeks, Chris McCarthy and Brian Robbins

Paramount Global’s new trio of co-CEOs took centre stage at the annual shareholder meeting on Tuesday, laying out a long-term vision for the embattled media company despite the fact a merger deal with Skydance Media appears to be close.

George Cheeks, Chris McCarthy and Brian Robbins, who were tapped to lead Paramount in late April following the firing of former CEO Bob Bakish, outlined a three-pronged strategy that will involve “transforming” its streaming business, finding at least US$500m in annual savings and divesting several assets to pay off debt.

On the streaming front, Cheeks, who also serves as president and CEO of CBS, said the company needs to “accelerate our path to profitability.”

To do that, he said the company would reduce its streaming expenses, further integrate its teams and eliminate duplicate functions. McCarthy, whose other role is president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks, also said it would take an “alternative strategy to international” as well as “opening the door for increased licensing revenue.”

At the same time, the execs said they are “exploring options with both SVoD players and leading technology platforms with the goal of forming a joint venture or a long-term strategic partnership.”

McCarthy clarified that he was not talking merely about bundling Paramount+ with another streaming service but rather a “deep and expansive relationship.” The company has already received a “great deal of inbound interest” from other parties, according to McCarthy.

On the cost savings front, the co-CEOs said they had identified “near-term cost reduction opportunities with an annualised impact of US$500m, with much more to come,” while they said the company is “already in talks” to divest some of its assets.

“The combination of a streaming strategy reset, cost reductions and asset sales will set us up to deliver consistent earnings growth and return the company to investment-grade metrics over time and we’re 100% committed to executing with urgency,” said McCarthy.

Elsewhere, the execs talked up the success of its programme franchises, claiming Paramount had 14 billion-dollar franchises under its umbrella, including Star Trek, Yellowstone, SpongeBob SquarePants, Teenage Mutant Ninja Turtles, Top Gun and NCIS.

Of the latter property, McCarthy said the crime procedural franchise generated revenue of US$8bn across its first six series. Even now, it generates around US$500m annually, said the execs.

The shareholder meeting came as Paramount continues talks with David Ellison-led Skydance over a potential merger. As it stands, Skydance has made an offer, which has been agreed by Paramount’s special committee, but Paramount’s controlling shareholder, Shari Redstone, has the final say on whether a deal goes through.

Ever since the departure of Bakish, the company has been keen to demonstrate to investors, and potentially its suitors, that it is willing and able to continue operating as a standalone company if it wishes. Whether that is true remains to be seen, although the co-CEOs added that they will flesh out the strategy during the company’s second-quarter earnings in August.

A Paramount town hall meeting, which Cheeks, McCarthy and Robbins had been scheduled to lead on Tuesday, was postponed at short notice until June 25. In a note to employees, the company said it hoped the date change meant it could “speak to you with as much candour and transparency as possible.”

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