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Paramount is preparing to fire chief executive Bob Bakish, adding more uncertainty at the Hollywood group controlled by Shari Redstone as it holds merger discussions with Skydance Media and prepares for another potential bid, according to three people familiar with the matter.
The company is expected to receive a counterbid from Sony and Apollo as soon as this week, according to people familiar with the situation.
Bakish has worked for Paramount and its predecessor, Viacom, for more than two decades. Redstone installed Bakish as CEO of Viacom in 2016, and he took over as head of the whole company after it merged with CBS in 2019.
However Bakish, previously viewed as a loyalist to Redstone, has clashed with her over the Skydance offer, which has been opposed by common shareholders who say its structure benefits her but leaves them out. Bakish had been “uncooperative” during the sales process, said one person familiar with the matter.
Bakish’s future at the company was set to be determined at a board meeting on Sunday. His expected ousting would be the latest twist in a messy and prolonged drama at Paramount, the storied Hollywood company behind films and television shows such as The Godfather, Titanic and Star Trek.
Paramount, which is competing against larger rivals such as Netflix, is losing billions of dollars on its streaming service while struggling with the long-term decline of its television channels.
Paramount’s stock valuation has halved over the past year, to about $8bn, as investors soured on the company’s prospects.
David Ellison, the Skydance CEO who is backed by his billionaire father, Oracle founder Larry Ellison, and private equity groups RedBird and KKR, is pursuing a complicated deal in which his company would buy National Amusements, which holds almost 80 per cent of Paramount’s voting shares, for $2bn. Paramount would then acquire Skydance for $5bn in a stock deal.
Some Paramount shareholders have come out in opposition to the proposed structure of the Skydance deal and have threatened to sue if it goes ahead. An all-cash $26bn bid by Apollo for Paramount was rejected recently, and since then four members of the Paramount board have withdrawn their names for re-election in June.
John Rogers, chair and co-CEO of Ariel Investments, said on Friday that “a deal that favours Shari at the expense of the rest of us [is] extremely problematic”.
“It does feel like a company in disarray,” he told the Financial Times.
Skydance has been engaged in exclusive discussions with Paramount that are expected to end on May 3, according to people familiar with the situation, but could be extended. Sony and Apollo were seeking to submit their joint offer as close to that expiration date as possible, those people added. Skydance is hoping to wrap up negotiations by early June.
Apollo is still studying the structure of its bid and whether it will involve Legendary Entertainment, the movie studio it bought a partial interest in early 2022. The studio has seen a string of hits this year, including Dune: Part Two, which has bolstered its finances.
Some analysts say an acquisition by Japan’s Sony and Apollo deal could have problems being approved by regulators.
Paramount is set to report earnings after market close on Monday.
Ellison has had a close relationship with Paramount: Skydance has co-produced a number of hits with Paramount, including Top Gun: Maverick and Mission Impossible, and Ellison has expanded his studio into animation, TV and sports.
Skydance’s plan is to recapitalise the company, which Ellison would lead. He also would install new management, including Jeff Shell, the former NBCUniversal executive who now works for RedBird.
Paramount and Sony declined to comment.
Paramount shares rose last autumn amid the speculation that it could be acquired, but are down 18 per cent this year.
