Paramount Global’s new trio of co-CEOs laid out their vision for the Hollywood studio as the controlling shareholder, Shari Redstone, mulls a sweetened takeover offer from a buyer consortium led by Skydance and RedBird Capital.
Redstone addressed the investors as the meeting began, indicating the company’s most important goal was “driving value for all our shareholders,” as she put her support behind the studio’s new leadership.
“While we recognize that this is not a traditional management structure, we are confident that it will enable them to move quickly to implement best practices throughout the company to drive improved performance,” Redstone added.
The opened the way for the trio of executives – George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios; and Brian Robbins, president and CEO of Paramount Pictures – to outline a “shared vision” for the studio.
“Our plan looks forward to build back the best of Paramount by delivering higher revenue with lower costs, which translates to higher earnings and better returns,” Robbins told shareholders. He added the studio had a strength in franchises that did not rely on superheroes.
“What sets Paramount’s franchises apart from the rest of the industry is that we aren’t dependent on any one genre. We saw the downsides of betting on a single genre like superheroes and comic books. So we built our billion dollar brand strategy with a focus on real life heroes,” Robbins told investors.
Cheeks added Paramount would be “transforming streaming,” to get closer to profitability, “reduce non-content costs,” by eyeing around $500 million in annual cost cutting. He added Paramount was “in talks to divest some of our assets to unlock value,” which includes earlier negotiations to sell BET Networks to a management-led consortium.
The meeting took place against the backdrop of Redstone and her National Amusements vehicle looking at a revised deal for the studio, and her own options. Cheeks, McCarthy and Robbins have led the studio since the previous CEO, Bob Bakish, left Paramount in April when Paramount first began exclusive merger talks with Skydance.
If Redstone rejects the revised offer from Skydance, she could continue to have the new triumvirate run the company, look at other deals (like Sony/Apollo), or sell National Amusements outright to someone else and let the buyer figure out what to do with Paramount.
Jamie Morris, head of investor relations at Paramount, addressed the current takeover talks during the AGM. “We cannot comment on the speculation. What I can tell you is that the presentation that you just saw was built to best set (the company) up for growth and to drive shareholder value, regardless of the speculation,” he said.
McCarthy added during the Q&A portion of the meeting: “We’re aggressively pursuing all options to make the most of our content and drive the greatest value for the company, in both the short and long term.”
And Cheeks addressed the proposal for $500 million in annual savings. “Look, we’re prepared to move quickly on the cost reductions, we’re confident that the business can be run much more efficiently,” as he pointed to a management streamlining and reducing costs in real estate, technology, marketing and other studio roles.