Bob Bakish is formally out as CEO of leisure powerhouse Paramount, after biting the hand that fed him. Bakish alienated Shari Redstone, chair of Paramount and CEO of Nationwide Amusements, which controls 77% of Paramount’s voting inventory.
The legacy studio behind blockbusters Prime Gun and Mission: Unattainable and classics together with The Godfather and former cable standbys Comedy Central, MTV in addition to CBS itself ousted Bakish in the course of a destiny-determining takeover battle. There is no such thing as a particular person CEO ready within the wings to interchange him on the high of the $8 billion firm. As a substitute the CEO position can be helmed by three Paramount division heads working as co-CEOs. The trio presumably can be among the many lead strategic negotiators for the corporate whereas it navigates a messy takeover battle with billions at stake and a number of suitors lined as much as purchase it.
Bakish misplaced Redstone’s loyalty in a approach that echoes the remedy she endured by the hands of her father, the late billionaire media mogul Sumner Redstone. The elder Redstone was recognized to belittle her in conferences in entrance of executives, badmouth her within the press, and undercut her probabilities at succeeding him within the CEO position. The Wall Street Journal reported Bakish went behind Redstone’s again in floating a possible streaming partnership with Comcast earlier this yr, which Redstone stated was a nasty deal for the corporate and will complicate a possible sale. Redstone additionally complained after Bakish balked at a number of gives for the corporate’s Showtime division, one among which reportedly approached $6 billion. Bakish slashed dividends by virtually 80% final yr, slicing off a key income for Redstone (Paramount World’s largest voting shareholder.)
In the meantime, Paramount is mired in one of the vital dramatic company takeover battles in current reminiscence: dueling offers from a group led by Oracle founder Larry Ellison’s son David’s Skydance Media, and a $26 billion cash joint bid from Sony and private equity firm Apollo. The differing constructions of the 2 offers pitted Redstone’s and Bakish’s pursuits towards one another. Skydance’s proposal would pay Redstone a hefty premium for her voting shares, permitting it to take management of the enterprise with out having to supply non-voting shareholders something besides fairness within the enterprise—the entire deal would be for less than $10 billion. Apollo’s proposal would supply each shareholder a smaller premium, extra in style with Bakish and with Paramount’s broader investor base—however it would result in a much smaller windfall for Redstone, who also controls enough of a voting stake in the company that she could potentially block it.
Bakish resigned yesterday, proper earlier than Paramount hosted an unusually short earnings call, spending solely 9 minutes with analysts and refusing to take any questions earlier than taking part in the Mission: Unattainable theme music. Bakish is slated to cash in on a severance package worth over $50 million.
Fallout
Chaos on the high for Paramount goes again nicely past the takeover battle of current months. Its inventory has misplaced roughly 50% of its worth over the previous 12 months, nevertheless it’s been a turbulent funding since even earlier than Bakish’s 2016 appointment as CEO. Beneath the Redstone household, its majority house owners, Paramount has been suffering from scandal and company mismanagement for many years, and Bakish’s resignation is simply the most recent twist.
Bakish has spent his total profession within the media trade, becoming a member of Paramount in 1997 and dealing his approach up the ranks. In 2007, he was named CEO of Viacom, the Redstone holding firm that after included Paramount Studios, and he oversaw the corporate by means of its merger with CBS in 2019, after which he was named Paramount CEO.
Extra importantly, Bakish rose at Paramount with the help and loyalty of Shari Redstone, who had a front-row seat as Sumner Redstone dominated the gathering of media properties till nicely into his 90s. As Sumner Redstone aged and his relationship along with his daughter soured, Bakish’s position supporting her would ultimately show pivotal. His departure with Paramount’s inventory floundering and the corporate getting ready to a takeover is due to this fact simply the most recent twist in a long-running saga, seemingly ripped straight from HBO’s “Succession,” which was allegedly impressed a minimum of partly by the Redstone household.
A legacy studio’s tangled internet
Paramount was founded in 1912, making it the longest-operating studio in Hollywood. In 1994, it was bought for just over $10 billion by Sumner Redstone, a former drive-in-movie-theater operator who constructed an empire shopping for up main stakes in leisure corporations together with Viacom, MGM, and Time, Inc. Nearly six years later, Redstone paid close to $40 billion for CBS, solidifying a bona fide media empire, named Nationwide Amusements after his preliminary drive-in fortune.
Merely put, Redstone’s varied properties dominated the media panorama of the Nineteen Nineties and early 2000s. Though housed in separate publicly traded corporations, his Viacom properties included a number of of cable tv’s crown jewels, whereas CBS dethroned NBC in 2006 to change into America’s most-watched community, a title it nonetheless holds at present. As Sumner Redstone aged, although, issues started to unravel.
The elder Redstone, who turned 90 in 2013, was a mercurial chief recognized for his tense relationship along with his household (notably his daughter, Shari, who has since taken over management of his enterprise) and an extended string of relationships with youthful ladies nicely into his later years that drew questions on who managed his private life, in keeping with New York Occasions reporters Rachel Abrams and James B. Stewart’s 2023 account of Redstone and his enterprise, “Unscripted.”
Sumner’s relationships had been costly. Abrams and Stewart report that Sumner paid over $7 million in whole to Terry Holbrook, a former mannequin and cheerleader who he dated in 2001. A supply conversant in Sumner’s belief stated that he amended it greater than 40 occasions to incorporate ladies he was seeing, and that many ladies obtained hundreds of thousands of {dollars} apiece. Towards the end of his life, Sumner was constantly accompanied by Sydney Holland and Manuela Herzer, two ladies each greater than 40 years his junior who managed who might entry him. That was a key issue within the deepening rift between Sumner and Shari, who weren’t on talking phrases for quite a few years, in keeping with Abrams and Stewart.
Redstone’s psychological state deteriorated as he entered his late nineties, coming to a head in a 2016 case the place an independent medical advisor concluded that Redstone was incapacitated and needed a legal representative to protect his interests. That very same yr, Redstone stepped again from operating his $40 billion enterprise day-to-day, handing the reins to his daughter, Shari. Sumner Redstone died in 2020.
Shari Redstone ruffled feathers when she backed Bakish as CEO of the joint ViacomCBS venture after the 2019 merger, selecting him over then-CBS CEO Les Moonves, a longtime ally of her father who was thought-about the possible choose for the position. Extreme backlash from Moonves and a lawsuit from CBS prompted Redstone, CBS’ majority shareholder, to submit amendments to the corporate’s bylaws to pressure Bakish’s appointment by means of. (Moonves was fired in 2019 after reports emerged that he had sexually harassed quite a few ladies.) The messy ordeal allied Bakish with Shari in main the brand new joint firm.
Over the next years, although, Paramount beneath Bakish—with Shari Redstone’s help—failed to fulfill traders’ expectations. Paramount World’s inventory is down round 80% from its 2019 excessive, and despite initial enthusiasm about Bakish’s plans for international expansion, his large wager on rolling out Paramount+ in 2020 has consistently lost hundreds of millions of dollars per quarter and struggled to earn the company a foothold in the streaming wars.
