May 30, 2024

Paramount Global CEO Bob Bakish has stepped down from his role, the company announced Monday, after the bell.

He is being succeeded by an “office of the CEO” made up of three division heads at the company. This new office includes CBS CEO George Cheeks, CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks, and Paramount Pictures and Nickelodeon CEO Brian Robbins.

His exit comes as Paramount continues merger talks with Skydance Media, the movie studio behind Top Gun: Maverick and Mission: Impossible — Dead Reckoning Part One.

Here is everything you need to know about Bakish’s sudden exit.

What role do the company’s merger talks with Skydance have in Bakish’s exit?

Paramount, the parent company of CBS and MTV, is in exclusive talks — with a deadline of May 3 — with Skydance regarding a potential merger.

Skydance, led by David Ellison, the son of Oracle co-founder and billionaire Larry Ellison, has agreed to pay a “little more” than $2 billion for National Amusements, the holding company behind Paramount, Bloomberg News reported. Its current head, Shari Redstone, led Viacom and CBS’s 2019 merger into what is now Paramount Global.

If the merger succeeds, Ellison would become CEO of the new merged company.

Sources familiar with the matter told CNBC that Bakish has privately expressed concerns with the deal, claiming it could dilute common shares of the company. Bakish and his team have been seeking alternatives to the deal, the Wall Street Journal reports.

Why Paramount’s top shareholder is in favor of the merger and Bakish’s exit

The Wall Street Journal reported that Redstone has been contemplating selling National Amusements for about a year. Last May, Paramount cut its dividend by 79% from 24 cents to 5 cents. This was a big hit to National Amusements’s revenue.

Redstone, who owns 77% of Paramount’s voting rights, will get a premium price for the shares held by National Amusements under the deal, according to Bloomberg.

The Wall Street Journal also reported that Redstone has become dissatisfied with Bakish’s leadership. The company’s stock has fallen 48% over the past 12 months.

Bakish could be replaced by an “office of the CEO” comprised of the Paramount’s division heads, according to the Journal.

How are other shareholders responding?

The merger plans have left shareholders deeply displeased — and they’re voicing it with a mailbag of indignant letters. Among the notes landing on Paramount’s doorstep: the entertainment giant is puppeteering “organized schemes,” the merger is doomed under a “silver-spooned” nepo-hire, and an “avalanche of litigation” could soon be careening the company’s way. The main complaint is the dilution of their shares under these deal.

People familiar with the talks told CNBC today that Skydance’s latest offer addresses shareholders’ concerns by providing “what is essentially a premium that would be paid at least to B shareholders for some percentage of their shares.”

-William Gavin contributed to this article.

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