Paramount Global is undergoing significant leadership changes with CEO Bob Bakish officially stepping down and an "Office of the CEO" formed comprising Chris McCarthy, George Cheeks, and Brian Robbins. As per Paramount's quarterly report, Bakish will formally resign on Tuesday, April 30th, and has agreed to continue serving the company in the capacity of a "senior advisor" until October 31st. The trio of executives will collaborate closely with both the Paramount board and CFO Naveen Chopra. The first time we heard the vision of the trio of executives was during the brief earnings call on Monday when Brian Robbins stated, “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.” These three high-level strategies represent the approach the trio of CEOs aim to adopt to foster further growth within the streaming company.
The major leadership change at Paramount comes amid talks with a group of potential buyers led by David Ellison's Skydance, RedBird Capital, and KKR. They're discussing a plan to keep Paramount public while letting Skydance and RedBird executives take charge and implement a new strategy. Meanwhile, private equity firm Apollo is in discussions with Sony Pictures about a joint bid to take Paramount private through a merger with Sony and Apollo. These discussions with potential buyers took the spotlight away from the relatively positive earnings that were reported.
Paramount's earnings report highlighted a 17% growth in advertising revenue, attributed to events like Super Bowl LVIII and sports content, alongside a significant influx of subscribers to its Paramount+ streaming platform which reached 71.2 million for the period. These positive figures led to Paramount exceeding analyst expectations, reporting revenue of $7.69 billion and approximately $0.87 cents per share, compared to forecasts of $7.65 billion and $0.34 cents per share, respectively. The announcement of Bob Bakish's resignation, potential buyer negotiations, and positive earnings led to a 2.9% increase in the stock price on Monday, according to Michael Larkin, a writer for Investors Business Daily. On Tuesday, the stock experienced a significant decline, plummeting over 7% as investor sentiment turned negative.