What are the next steps for Paramount after botched Skydance deal?

After news that the Paramount–Skydance merger fell apart, the company’s three leaders, collectively referred to as the “Office of the CEO,” have reached out to staff to outline a plan for moving forward, acknowledging that the past several months had been full of “speculation” and “ongoing change.”

George Cheeks, Brian Robbins and Chris McCarthy sent a companywide memo noting that the board of directors will “always remain open to exploring strategic alternatives that create value for shareholders.” 

The memo also mentions three specific pillars, some of which had already been hinted at in prior announcements: Working on getting its streaming assets to be profitable, “streamlining” and “reducing” costs other than content and “optimizing” the company’s asset mix by “divesting some of our businesses to help pay down our debt.”

Of those three points, two of them are likely concerning to employees: The mention of streaming and reducing costs could include either cutting more staff or reducing costs elsewhere within its operations, which could create less-than-ideal working conditions. A possible divesture of company businesses could also spell upheaval for staffers working in those units. 

It’s important to note that it’s still early in the process and no firm plans have been announced. 

Meanwhile, analysts told The Hollywood Reporter that the company still has options to explore, though perhaps the most likely options appear to be an outright sale of its family holding company National Amusements or simply staying the current course outlined by leadership.

“Without the proposed merger with Skydance as part of the deal, Paramount appears increasingly likely to go it alone,” Guggenheim analyst Michael Morris told THR.

Hi Everyone,

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As promised, we want to be as transparent as possible and share information whenever we can.

As you heard yesterday, the proposed transaction with Skydance Media is not moving forward. So, what does this mean for Paramount? While the Board will always remain open to exploring strategic alternatives that create value for shareholders, we continue to focus on executing the strategic plan we unveiled last week during the Annual Shareholder Meeting, which we are confident will set the stage for growth for Paramount.

Work is already underway, as we focus on three pillars:

• Transforming our streaming strategy to accelerate its path to profitability
• Streamlining the organization and reducing non-content costs
• Optimizing our asset mix, by divesting some of our businesses to help pay down our debt

As we advance each of these initiatives, we will continue to prioritize investment in our world class franchises, films, series and sports, which are the core of our business.

Importantly, we want to thank you for your hard work and your continued focus. We recognize that the last several months have not been easy as we manage through ongoing change and speculation. And, we should all expect some of this to undoubtedly continue as the media industry and our business continue to evolve.