Paramount Global’s current leadership recently unveiled their go-forward plan at the annual shareholder meeting, outlining strategic priorities in the event that a sale of the company does not materialize. The Office of the CEO, comprised of CBS CEO George Cheeks, Paramount Media Networks CEO Chris McCarthy, and Paramount Pictures CEO Brian Robbins, presented a detailed plan that includes exploring streaming joint venture opportunities with other media companies, cutting costs by $500 million, and divesting noncore assets.
The presentation comes at a critical time for Paramount, as the company has agreed to the framework of merger terms with a consortium led by David Ellison’s Skydance Media, along with private equity firms RedBird Capital and KKR. The deal is currently pending approval from Paramount’s controlling shareholder, Shari Redstone, who owns the majority of Class A Paramount shares through National Amusements. Redstone has been supportive of the Office of the CEO leadership team, led by McCarthy, Cheeks, and Robbins, since former CEO Bob Bakish stepped down in April.
The strategies outlined in the go-forward plan serve as an alternate option for Redstone if she decides against selling the company. The focus is on reducing Paramount’s debt and restoring the company to an investment-grade rating, after a recent credit rating downgrade by S&P Global Ratings to junk status. With approximately $14.6 billion in long-term debt as of March 31, Paramount is under pressure to showcase financial stability and growth potential to investors.
During the presentation, Cheeks emphasized the need for swift cost reductions, targeting duplicative teams, real estate, marketing, and other corporate overhead categories. The $500 million in cost savings is just the starting point, with further details to be provided during the company’s upcoming earnings call in August. The executives highlighted the importance of prioritizing world-class content while being mindful of capital deployment and debt reduction.
Robbins discussed Paramount’s focus on exploring partnerships with other streaming platforms to optimize the company’s asset mix and generate revenue for debt repayments. The executives expressed openness to deep and expansive relationships with potential streaming partners, emphasizing the need for sustainable revenue streams beyond traditional content licensing. Paramount’s flagship service, Paramount+, with over 70 million subscribers, continues to incur losses, prompting the company to consider innovative business models and strategic alliances.
In addition to cost-cutting and debt management, McCarthy mentioned that Paramount is evaluating the possibility of divesting certain assets to streamline operations and improve financial performance. The company’s leadership is committed to maximizing shareholder value while navigating a rapidly evolving media landscape characterized by intense competition and shifting consumer preferences.
Overall, Paramount Global’s go-forward plan represents a proactive approach to addressing the company’s financial challenges and positioning itself for long-term success in an increasingly digital and competitive market environment. The strategic priorities outlined by the Office of the CEO underscore a commitment to growth, innovation, and financial discipline as Paramount Global charts a new course in the dynamic media industry.