Paramount which once boasted about its unfailing media ownership has since inception of the streaming world pivoted towards business uncertainty – tightening its grip to relaunch itself for at-the-home audiences which failed to meet the likes of its then CEO Mr. Bob Bakish
Paramount – a name every movie-maniac associated with “hit” has ironically underwent a failing journey to keep itself afloat in the very treacherous entertainment industry. Keeping himself professionally attached to the company he became the Chief Executive Officer of in 2016, Mr. Bob Bakish has faced every tsunami that came in way of his work, until on Monday, when he stepped down from the office.
His announcement came as a reflection of the company’s failure to reinvent its business relevance to stay inside the conversational block without harming its conventional principles. The media empire over the last decade has undergone the death of cable TV and the juggernaut of streaming platforms. Mr. Bob Bakish had reservations about the company’s future which rested with Shari Redstone, the controlling shareholder of Paramount with 77% voting rights.
Her long time colleague and a trustworthy companion, Mr. Bob ran out of choices to keep the company on ground – pacing ahead. Thereby, leaving the company under Ms. Redstone’s governance who has already signed a deal to liquidate her shares, arousing merger speculations. The company has been in discussions to merge with Skydance – a media company run by Hollywood executive David Allison.
Paramount surfing over a wave of “shareholder-divide” concerning the merger
As the merger speculations ran in full-speed, the special committee of board members of Paramount became increasingly disconcerted over the future the company was heading towards. Ms. Shari Redstone has already signed off on a potential deal for her stake, but the company’s director are still contemplating over reaching an agreement for the whole company.
Resisting a possible merger are majority shareholders who have publicly announced their distaste for this idea and chose an all-cash bid as the best route for the company’s future. Private equity firms like Apollo Global Management and Sony have discussed offers which would entail a complete acquisition of the company and give it its much needed alternative. But any discussions foreign to Skydance cannot process ahead until the exclusive negotiation period with Skydance expires, in early May.
To reaffirm shareholder confidence in Skydance, few “pleasantries” were exchanged. A proposal to infuse $3 billion cash to help the company pay down debt and buy back the shares was tabled by Skydance’s financial executive. In a bold move, a larger stake was guaranteed to the shareholders if they comply with the merger. These accommodations promised by Skydance does not necessary imply the commissioning of the merger plans. The two companies are still under talks before they finalize the proposal.
Paramount CEO had “conflict-of-interest” with its biggest stakeholder
Ms. Shari Redstone’s growing business conflicts with Mr. Bob Bakish had somewhere made him loose his sense of competency in an extremely overwhelming industry. Bob Bakish who was a long time employee of Paramount – since 1997 was officially designated executive position in 2016. Up until 2019 him and Ms. Redstone shared a compatible business model which began to deteriorate as profit began to stagger.
Bob Bakish who had failed to strike lucrative business opportunities if had been successful could have injected abundance of monetary support in a company who was in a long term decline. In 2021, Blackstone, a private equity firm expressed interest in the company’s Showtime cable network for an astounding %5.5 billion, which Bob failed to pursue.
These momentary lapses fractured there fragile business relations. Mr. Bakish’s departure has ended a decade long chapter of his ingenious contributions to pave way for Paramount to continue breathing in an environment overly crowded by competitors. He was the pioneer behind the creation of Paramount+ streaming service and behind the acquisition of Pluto Tv – an ad supported free service.
These revolutionary insights have left an indelible mark over the company’s this year’s first-quarter performance, surpassing over the predicted threshold. Fetching super bowl broadcasting rights have drastically improved viewership on its streaming platform along with the fee it charged from various advertisement labels. A revenue growth of 5.7% was recorded taking the overalls to $7.69 billion. Per share price inflated by 62 cents, way more than the 36 cents average prediction.
In spite of investors showing reluctance to finance projects considering the uncertain state the global markets are under. Paramount’s stunning financial report must have further boosted Skydance’s motivation for merger but also must have subsided shareholder enthusiasm – carving an inner divide exacerbating its future in the business which continues to hang in uncertainty.
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