Paramount Office of the CEO Plan Includes Streaming Partnerships, Cost Cuts and Divesting Assets SuperNayr

Paramount’s Office of the CEO laid out its highly anticipated long-term strategic plan on Tuesday designed to help the struggling media conglomerate reduce its $14.6 billion in long-term debt and drive revenue and earnings growth.

The plan, which was unveiled by Chris McCarthy, Brian Robbins and George Cheeks at Paramount’s annual shareholder meeting, focuses on three pillars: transforming streaming, streamlining the organization to reduce non-content costs and “optimizing” its asset mix to pay down debt.

“Our plan looks forward by building back the best of Paramount, delivering higher revenue with lower costs, which translates to higher earnings and better returns,” Robbins said. “We will be thoughtful in how we deploy capital, with our world class content always being the first priority. That’s the way we can maximize shareholder value and return Paramount to delivering consistent earnings growth.”

Leadership revealed that they have already identified $500 million in near term cost reduction opportunities, including real estate, technology, marketing and other corporate overhead, and are already in talks to divest some assets to unlock value.

When it comes to accelerating streaming profitability, executives said they would integrate the company’s teams more closely and eliminate redundancies, take an “alternative” international strategy to boost profits and increase content licensing. Management has previously said they expect Paramount’s streaming business to reach domestic profitability in 2025.

“At the same time we’re working on exploring options with both SVOD players and the leading technology platforms with the goal of forming a joint venture or a long term strategic partnership to maximize our momentum and take advantage of our combined strengths,” McCarthy said. “Now let me be clear, I’m not talking about marketing bundles either. This is a deep and expansive relationship, one that would make the most of our hit content while improving the customer offering, which together will help reduce churn and reduce expenses, which will accelerate profits.”

In addition to their presentation at the Paramount’s annual shareholder meeting on Tuesday, the trio will hold a town hall with employees on Wednesday.

Skydance Media CEO David Ellison and National Amusements President Shari Redstone

The Office of the CEO’s presentation comes as controlling shareholder Shari Redstone is currently reviewing an offer from David Ellison’s Skydance Media that would see the latter acquire her holding company National Amusements, which controls 77% of Paramount’s voting stock. The second step of the plan would then see Skydance merge with Paramount to create a combined company.

Redstone could also decide to pursue a deal with Sony Pictures Entertainment and Apollo Global Management, who submitted a joint, non-binding $26 billion all-cash offer for Paramount, or she could decide to have Paramount go it alone under the Office of the CEO’s strategy.

“We recognize that this is not a traditional management structure,” Redstone acknowledged during the annual meeting. “We are confident that it will enable them to move quickly to implement best practices throughout the company and to drive improved performance.”

More to come…

Source link

Leave a Comment