Bob Bakish Officially Ousted as Paramount CEO; Trio of Executives to Take Over

Paramount Global CEO Bob Bakish is officially out at the company.

The entertainment conglomerate — in the middle of a sales process — is turning to a handful of top executives to run the company.

Chris McCarthy, George Cheeks and Brian Robbins will make up an “Office of the CEO,” running Paramount on a day-to-day basis for now. The three executives will work with the Paramount board and CFO Naveen Chopra.

According to Paramount’s quarterly report, Bakish will officially step down on Tuesday, and has agreed to remain employed by the company through Oct. 31 as a “senior advisor.”

The dramatic change comes as Paramount is in the middle of an exclusive negotiating window with a potential buyer group consisting of David Ellison’s Skydance, RedBird Capital and KKR, with talks circling a plan that would keep Paramount public but with Skydance and RedBird executives effectively running things and executing a new strategy.

At the same time, the private equity firm Apollo has held discussions with Sony Pictures about possibly doing a joint bid in a deal that would take Paramount private in a merger with Sony and Apollo.

On the company’s earnings call, McCarthy said of working with Robbins and Cheeks that “it’s a true partnership. We have a deep respect for one another and we’re going to lead and manage this company together.

“On that note, we’re finalizing a long-term strategic plan to best position this storied company to reach new and greater heights in our rapidly changing world. The plan is focused on three pillars: First, make the most of our hit content; second, strengthen our balance sheet; and third, optimize our streaming strategy.”

Added Robbins, “We look forward to coming back to you in short order to share our plan and discussing it all in detail at that time.”

The company did not take any questions on the call, with the executives instead delivering only prepared remarks.

Bakish received a compensation package valued at $31.3 million in 2023, a difficult year for the industry given the dual Hollywood strikes. He has this year encouraged his staff to focus on “execution” amid deal chatter surrounding the company and called “managing costs” and earnings growth the key priority for 2024.

While Bakish has largely declined to comment on the deal chatter, he told analysts on the company’s fourth-quarter earnings call that he was focused on creating value for all shareholders (emphasis his), suggesting some daylight between him and Shari Redstone, Paramount’s controlling shareholder.

“Paramount Global includes exceptional assets and we believe strongly in the future value creation potential of the Company,” Redstone said in a statement. “I have tremendous confidence in George, Chris and Brian. They have both the ability to develop and execute on a new strategic plan and to work together as true partners. I am extremely excited for what their combined leadership means for Paramount Global and for the opportunities that lie ahead.”

Wall Street analysts have said in recent weeks that Paramount has lost investors amid worries that controlling shareholder Redstone would benefit from a Skydance deal, while regular shareholders would be diluted.

But Wolfe Research analyst Peter Supino recently changed his rating from “underperform” to “peer perform,” while dropping the use of a stock price target. “While fundamentally, there remain real risks to Paramount’s business in the form of declining linear profitability and a direct-to-consumer segment that we expect to remain unprofitable over the next few years, the rising prospect of a sale of the company to an owner more likely to exploit Paramount’s intrinsic value outweighs near-term financial concerns,” he argued.

The ouster of the CEO comes after days of recurring chatter about Bakish’s future at the company and ahead of Paramount’s first-quarter earnings conference call after the market close on Monday.

Bakish has long had a reputation for being popular at Paramount due to his more collaborative leadership style that empowered his executives and was open to new ideas. He was also lauded for focusing on striking distribution agreements that went beyond traditional pay TV deals to include streaming, mobile and other platforms earlier than his peers. And Bakish encouraged a global mindset with local execution.

He also seemed to have for a long time a constructive relationship with Redstone, whose father, Sumner Redstone, had trusted the CEO title at Paramount predecessors CBS Corp. and Viacom to Leslie Moonves and to the controversial Philippe Dauman, respectively.

“I’d like to take a moment to thank Bob for his leadership of the company through a period of immense change for us and the industry,” Chopra said on the call. “Not only did Bob help navigate a number of challenges, but I’m proud of all we’ve accomplished and it’s been my privilege working together with him.”

“With employees in limbo for years as Redstone battled with Dauman and Moonves, there is no doubt that Bob Bakish was the right CEO to helm Viacom in 2016,” LightShed Partners analyst Rich Greenfield and colleagues wrote in a March report. “Bakish has been at Paramount and predecessor Viacom for 27 years and played a critical role in improving Viacom’s relationships with distributors that Dauman had largely destroyed, while also significantly improving internal morale.”

But the LightShed team then called for new leadership. “Unfortunately, after making meaningful progress and shepherding the merger over the goal line in 2019, Bakish and his management team made a critical strategic mistake in spring 2020 that has ultimately crippled the company financially,” they argued, talking about the creation of streamer Paramount+.