The persistent chatter surrounding Paramount Global has not quieted following the end of sales discussions with Skydance Media, but the company now faces the challenge of addressing profit declines and crafting a strategy for future success. Management announced during a town hall meeting in Los Angeles that bankers have been hired to facilitate asset sales to help mitigate debt.
At this critical town hall, Brian Robbins, Chris McCarthy, and George Cheeks voiced their concerns and outlined their plans to about 500 employees at Paramount Theatre.
Before we begin today’s presentation, we’d like to take a moment to acknowledge the challenges of all the M&A speculation surrounding our company,
Robbins stated. We know what a difficult and disruptive period it has been. And while we cannot say that the noise will disappear, we are here today to lay out a go-forward plan that can set us up for success no matter what path the company chooses to go down.
Challenging Profit Declines
McCarthy, noting that Paramount’s revenue has grown by 13% from 2018 to 2023, highlighted a troubling 61% decline in operating income before depreciation and amortization (OIBDA) over the same period. He emphasized, Let me be clear: a 61% decline in profits is simply unacceptable. We need to act now to reverse this trend.
Transforming Streaming Strategy
The triumvirate’s plan aims first at reshaping Paramount’s streaming model. Noteworthy progress was mentioned since the company’s shareholder meeting on June 4. Paramount+ subscribers reached 71 million in the latest quarter.We are advancing talks with potential partners that will significantly transform the scale and economics of the service, making it profitable and driving long-term value,
McCarthy noted, suggesting these partnerships could serve as models for U.S development.
Selling Assets to Optimize Operations
We’re looking at selling certain Paramount-owned assets — we’ve already hired bankers to assist in this process — and will use proceeds to help pay down debt and strengthen our balance sheet.
, Cheeks explained further.This indicates significant upcoming changes.
Laying Off Employees
The third strategy centers around modernizing operations through $500 million in annual cost savings. This involves eliminating duplicative roles, which means more job cuts. Executives avoided providing a precise timeline but highlighted ongoing transformations across legal and corporate marketing functions.
The Future of Leadership
CEO Bob Bakish exited on April 29 amid adjustments for future deals. Though Shari Redstone was absent from Tuesday’s town hall, she remains a pivotal decision-maker. The potential remains for transactions involving Apollo and Sony or bids from notable figures like Steven Paul and Edgar Bronfman Jr., despite recent fluctuations in Paramount’s stock value.
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