Paramount Global unveils business plan and job cuts as sale looms
What options does the deal endorsed by Paramount's special board committee offer to investors?
The deal endorsed by Paramount's special board committee offers investors two options. The first option is to cash out, allowing them to sell their shares in Paramount Global. The second option is to hold on to their shares, essentially betting on David Ellison's ability to rebuild the media giant through his production company, Skydance Media. This potential merger is awaiting the approval of Shari Redstone, who is weighing whether to sell her family's stake in Paramount.
Why does the deal involving Skydance Media still require the approval of Shari Redstone?
The deal involving Skydance Media still requires the approval of Shari Redstone because she is the controlling shareholder of Paramount Global5. Her family's holding company, National Amusements, Inc., holds a controlling interest in Paramount with 77% of the voting stock. Therefore, her sign-off is necessary for the merger to proceed.
What strategies have the new "office of the CEO" at Paramount outlined to improve the company's financial situation?
The new "office of the CEO" at Paramount has outlined several strategies to improve the company's financial situation:
- Cost Cuts: The trio unveiled a plan that centers on $500 million in cost cuts, including an undisclosed number of layoffs.
- Asset Sales: They plan to sell assets to help reduce debt and improve the company's balance sheet1.
- Joint Venture for Paramount+: They are exploring a joint venture for the company's Paramount+ streaming service to accelerate its path to profitability.
- Streamlining the Organization: They aim to reduce non-content costs by streamlining the organization, making it leaner and more nimble.
- Focus on Core Brands: They plan to focus on the company's core brands and build on their existing strengths.
These strategies are intended to help Paramount Global reduce its $14.6 billion in long-term debt, return to investment grade metrics, and drive revenue and earnings growth.