The key executive team at Paramount Global has unveiled a plan to move forward with a streaming-focused joint venture, as well as job cuts if its planned merger with Skydance Media fizzles out.
The plans call for expense reductions that would shave $500 million from Paramount’s budget, as well as the divestiture of “non-core assets,” according to CNBC. Where Paramount does spend on content and marketing, executives said the funds would have to be disbursed strategically and carefully.
“We’ll be thoughtful with how we deploy capital, with our world-class content being the priority,” said Paramount Pictures CFO Brian Robbins, who is one of three executives serving in the Office of the CEO.
“To be clear, $500 million in cost savings is just the beginning,” said George Cheeks, another Office of the CEO stakeholder and the top executive at CBS, adding that more details will be offered on a future earnings conference call.
Robbins said Paramount has drawn “a great deal of inbound interest” from other media companies that would be willing to partner with the company on a streaming joint venture. He didn’t specify which, but said it would be a “deep and expansive relationship” and not a bundle arrangement. Paramount already operates a streaming JV overseas with Comcast called SkyShowtime. It wasn’t clear if Comcast was one of the media companies involved in discussions closer to home.
On Monday, financial news outlets reported Paramount and Skydance had reached an agreement on a revised framework on a proposed merger.
The deal would see Skydance acquire National Amusements from Shari Redstone for around $2 billion, then buy out nearly 50 percent of Paramount’s Class B stock at $15 per share, according to CNBC. The transaction, if approved, would allow Paramount’s shareholders to retain equity in the newly-formed company once the merger is approved, with Skydance and other partners owning two-thirds of Paramount and shareholders owning the rest.
The revised framework values Paramount at $8 billion, up from $5 billion under the proposed terms of Skydance’s initial offer. It is aimed at satisfying some institutional and retail investor concerns that Redstone would benefit substantially from the arrangement.
The proposed deal does not require shareholder approval, according to CNBC. If Paramount’s board approves the deal, it could be announced in the coming days.
