Confirming media reports that top leadership changes at Paramount Global were imminent, the media company on Monday announced the departure of long-time CEO Bob Bakish and named a trio of executives taking the helm in the interim.
In addition to the CEO and president exit, Bakish is stepping down from the company’s Board of Directors. The leadership shake-up comes as Paramount’s board is working to secure a merger deal with Skydance Media.
In the interim, Paramount has created an Office of the CEO, comprised of three senior executives including: George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, president and CEO of Paramount Pictures and Nickelodeon. Cheeks, McCarthy and Robbins will work closely with Paramount CFO Naveen Chopra and the Board of Directors.
Controlling shareholder and Board Chair Shari Redstone in a statement said "Paramount Global includes exceptional assets and we believe strongly in the future value creation potential of the Company. I have tremendous confidence in George, Chris and Brian. They have both the ability to develop and execute on a new strategic plan and to work together as true partners. I am extremely excited for what their combined leadership means for Paramount Global and for the opportunities that lie ahead."
Bakish had been CEO of Paramount since 2019 after the completed merger of CBS and Viacom – the latter where he held the CEO position since 2016 after joining Viacom in 1997 and serving in roles of increasing seniority.
"The Board and I thank Bob for his many contributions over his long career, including in the formation of the combined company as well as his successful efforts to rebuild the great culture Paramount has long been known for. We wish him all the best,” Redstone said in the announcement.
Some in the industry had become critical of Bakish’s stewardship of Paramount following the CBS-Viacom, including analysts at LightShed Partners. In March, LightShed analysts described the 2020 decision to create the Paramount+ SVOD as a “critical strategic mistake…that has ultimately crippled the company financially.” And the analysts urged Paramount controlling owners National Amusements Inc. and Shari Redstone to make an immediate leadership change to address what the firm viewed as Bakish’s failed strategic moves.
The leadership shake-up was officially disclosed Monday as Paramount also reported Q1 2024 earnings.
During the earnings call, Paramount decided not to take questions from the investment community, instead using the time for brief prepared remarks from the senior executives now making up the Office of the CEO and quarterly financial results delivered from Chopra.
Cheeks, who has held his current role since March 2020, emphasized Paramount’s content saying the company has “incredible assets…both in what we produce and the amazing people who make it all possible.”
McCarthy, meanwhile, noted that the three new leaders have worked collaboratively and known each other for decades.
“It’s a true partnership,” McCarthy said. “We have a deep respect for one another, and we’re going to lead and manage this company together.”
According to McCarthy, long-term strategic plans are still being finalized but are focused on three pillars including: making the most of hit content, strengthening the balance sheet and optimizing the streaming strategy.
Robbins noted that the three have all played roles in making hit TV and films, which he categorized as the “core of Paramount Global.”
“Each of us has deep industry knowledge, relationships and experience as business leaders and creative executives,” Robbins continued. “We will bring all of that to bear as we chart a course forward for our company.”
The leaders intend to come back “in short order” to share their plan and discuss in more detail, Robbins said.
Q1 2024 earnings results
As for earnings, Paramount Global reported total company revenue growth of 6% year over year to reach $7.68 billion, while the company’s improved operating losses to $417 million. Adjusted OBIDA increased to $987 million.
Chopra called out advertising as a highlight of the quarter, where total company ad revenue grew 17%– boosted by this year’s Super Bowl LVIII, which broke viewership records across CBS, Paramount+ and Nickelodeon.
And direct-to-consumer advertising saw gains, growing 31% yoy in the quarter to $520 million, driven by both the Pluto TV FAST service and Paramount+, including a Super Bowl bump. Beyond the Super Bowl, Chopra said revenue growth represented a mix of increased sell-through and higher CPMs.
On the DTC side Paramount also saw subscriber and subscription revenue gains. Chopra said subscription revenue growth of 22%, to reach $1.35 billion in Q1, was anchored by growth in Paramount+ subscriptions.
In Q1 Paramount+ added 3.7 million subscribers, for a total base of 71.2 million. Again, sports played a role, as Chopra said subscriber growth benefitted from the NFL and Super Bowl. Last quarter, Chopra had said it was “very excited about the magnitude of starts” the company saw form the Super Bowl, which aired on CBS and was also available on Paramount+, but noted it was too early to assess how many would stick around after the game.
Total DTC revenue grew 24% year over year to reach $1.87 billion in Q1, led by 51% revenue growth and 26% global ARPU expansion at Paramount+. The finance chief attributed ARPU rise to a full quarter of domestic price increases, as well as more international subscribers in higher ARPU markets.
DTC Adjusted OBIDA improved 44% to a loss of $286 million.
Total company affiliate and subscription revenue grew 6% in Q1, while in TV media affiliate revenue declined 3% year over year to $2 billion amid overall pay TV declines.