Paramount says CEO Bob Bakish is stepping down, will be replaced by a trio of executives

Paramount Global CEO Bob Bakish is stepping down, the company announced Monday, as merger negotiations with Skydance Media continue.

Bakish climbed the corporate ladder after joining Viacom in 1997, until he became CEO of the company in 2016. Following the merger of Viacom and CBS, he became CEO of the combined company in 2019, which was later renamed as Paramount Global. He is also leaving the company’s board of directors, Paramount said Monday.

Bakish will be replaced by a so-called “Office of the CEO.” Paramount will now be led by CBS president and CEO George Cheeks; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, the head of Paramount Pictures and Nickelodeon. The company said the three executives will work closely with Paramount CFO Naveen Chopra and the board.

In the release on Monday, Paramount said the new leadership is “working with the board to develop a comprehensive, long-range plan to accelerate growth and develop popular content, materially streamline operations, strengthen the balance sheet, and continue to optimize the streaming strategy.”

Paramount also reported its first-quarter earnings after the bell on Monday and held an earnings call during which the newly appointed company heads gave a brief statement and said they would be back “in short order” to share details on future plans.

Chopra led the call, which lasted under 10 minutes and didn’t include questions from analysts.

The company posted mixed results for the first quarter, beating on earnings but missing on revenue. Paramount reported 62 cents per share for the period, excluding items, versus estimates of 36 cents a share, according to analysts polled by LSEG. For revenue the company posted $7.69 billion versus analyst estimates of $7.73 billion, according to LSEG.

Overall revenue was up 6% compared to the same period last year, propelled by streaming and the Super Bowl.

The company’s direct-to-consumer streaming segment, which includes flagship service Paramount+, Pluto TV and BET+ saw revenue rise 24% to about $1.88 billion.

Paramount said it added 3.7 million Paramount+ subscribers during the quarter, bringing the total to 71 million. Losses related to streaming narrowed to $286 million compared with losses of $511 million during the same period last year.

Advertising revenue in the streaming segment was up, largely due to the Super Bowl, which aired in February on CBS, cable TV channel Nickelodeon and Paramount+.

Similarly, advertising revenue in Paramount’s TV media unit, which includes broadcaster CBS and cable TV channels like MTV and Nickelodeon, grew 14% due to the Super Bowl.

The top NFL event provided a boost during what has been a sluggish advertising environment for traditional TV networks. Still, streaming platforms and digital companies have reported advertising revenue growth, indicating the market is rebounding, at least for those areas of the market.

Overall, TV Media revenue was up 1% to $5.23 billion. Affiliate and subscription revenue fell 3% as cord cutting continued, and licensing and other revenue dropped 25%, including the impact of the Hollywood writers’ and actors’ strikes on content available for licensing.

Revenue for Paramount’s filmed entertainment unit increased 3% to $605 million due to the releases of “Mean Girls” and “Bob Marley: One Love.”

Bakish’s ouster comes as Paramount and Skydance Media inch closer to a possible merger, CNBC previously reported. The companies are in exclusive talks to pursue the deal until May 3, and a special committee is already in place.

Bakish has privately dissented against the merger, claiming it will dilute common shareholders, CNBC reported. As part of the proposed deal, nearly 50% of the merged company would be owned by Skydance and its private equity backers, while common shareholders would own the remainder of Paramount, which would remain publicly traded.

On Saturday CNBC reported Bakish could be out as CEO as soon as Monday, and ahead of the earnings call, after losing the trust of Paramount Global controlling shareholder Shari Redstone, who could see his removal as a means to accelerate a Skydance deal, CNBC reported Monday.

The departure also comes as Paramount has been in negotiations with cable company Charter Communications for the carriage of its TV networks including CBS and MTV. The deadline for those negotiations is Tuesday.

The special committee — which is in charge of accepting or rejecting transactions — and Skydance, which is backed by private equity firms KKR and RedBird Capital Partners, have been narrowing in on how to value Skydance’s assets as part of a merger, as well as how much equity to add to the company, CNBC previously reported.

Skydance intends to name its CEO David Ellison as head of Paramount if the deal were to happen, CNBC previously reported.

— CNBC’s Alex Sherman contributed to this report.