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Paramount leadership team outlines job cuts, streaming JV plans at annual meeting

Paramount leadership team outlines job cuts, streaming JV plans at annual meeting
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A view of Paramount Studios’s water tank as SAG-AFTRA members walk the picket line outside during their ongoing strike, in Los Angeles, California, U.S., September 26, 2023. 

Mario Anzuoni | Reuters

The current leadership of Paramount Global presented a go-forward plan at the company’s annual shareholder meeting Tuesday in the event a sale of the company doesn’t happen.

CBS CEO George Cheeks, Paramount Media Networks CEO Chris McCarthy and Paramount Pictures CEO Brian Robbins — collectively the company’s “Office of the CEO” — laid out strategic priorities, including exploring streaming joint venture opportunities with other media companies, eliminating $500 million in costs and divesting noncore assets.

The presentation comes at an awkward time. Paramount has agreed to the framework of merger terms with a consortium comprised of David Ellison’s Skydance Media and private equity firms RedBird Capital and KKR, CNBC reported Monday. The deal is still awaiting approval of Paramount’s controlling shareholder, Shari Redstone, who owns National Amusements, which owns 77% of Class A Paramount shares.

Redstone has been supportive of the Office of the CEO leadership team that has run the company since former CEO Bob Bakish stepped down in late April.

The plan that Paramount Global shareholders are hearing on Tuesday will essentially serve as Redstone’s alternate option if she chooses not to sell.

The strategies are being mapped out with an eye toward lowering Paramount’s debt and getting the company back to an investment-grade rating. Earlier this year the company’s credit rating with S&P Global Ratings was cut to junk status.

Paramount had roughly $14.6 billion in long-term debt as of March 31.

Shares of Paramount fell about 2% in early trading Tuesday.

At the start of Tuesday’s presentation, Redstone noted the unorthodox structure of the CEO office.

During their presentation, each executive noted that their future plans would emphasize growing content and franchises, but with a focus on cutting spending and lowering debt.

“We’ll be thoughtful with how we deploy capital, with our world-class content being the priority,” said Robbins during the presentation Tuesday.

Cheeks said Tuesday the company is “prepared to move quickly on cost reductions,” which will focus on “duplicative teams and functions across the organization, real estate, marketing and other corporate overhead categories.”

“To be clear, $500 million in cost savings is just the beginning,” said Cheeks, adding that more details, including timing, will be provided on the company’s next earnings call in August.

Cheeks added that they will explore various strategic initiatives that help to “optimize the asset mix and use the proceeds to pay down debt.”

On Tuesday, Robbins said the company has been “aggressively exploring all options” when it comes to partnerships with other streamers. He noted Paramount has already received “a great deal of inbound interest” from other potential streaming partners for a joint venture that would include the company’s flagship service, Paramount+, which has more than 70 million subscribers but continues to lose money.

“Let me be clear, we’re not talking about marketing bundles. This is a deep and expansive relationship,” Robbins said.

The company is also open to more licensing of content, he said.

McCarthy said Paramount is also weighing whether to divest assets.

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