Business

/

ArcaMax

Shari Redstone was poised to make Paramount a Hollywood comeback story. What happened?

Meg James, Los Angeles Times on

Published in Business News

It was supposed to be a blockbuster Hollywood comeback: Shari Redstone, who had long struggled to prove herself, was determined to orchestrate a dramatic turnaround of her family’s lagging entertainment company, Paramount Global.

“We are on the ascent ... reaching for new heights,” Redstone, Paramount’s controlling shareholder and non-executive chairperson, confidently told investors in February 2022 during a virtual event from a soundstage in Queens, New York.

Rather than leading Paramount to reclaim its place among industry titans, Redstone’s tenure atop the company has been marred by miscalculations and setbacks. She’s trying to sell the company known for its fabled film studio, the venerable CBS broadcast network, TV stations and cable channels.

But Redstone’s willingness to hand Paramount to tech scion David Ellison in a complicated two-phase transaction has infuriated investors, caused months of tensions in the boardroom and contributed to the ouster of Chief Executive Bob Bakish, according to knowledgeable people who were not authorized to speak publicly.

Now the sale could be derailed.

“In 41 years of being in business, I’ve never seen a scenario quite like this,” said John W. Rogers Jr., founder and chairman of Ariel Investments, one of Paramount’s largest shareholders, in an interview.

 

How did Redstone and Paramount get into such a jam?

“It’s just been one terrible decision after another,” said corporate governance expert Nell Minow.

Years of under-investment, mismanagement, a titanic shift in audience behavior, a shotgun marriage of Viacom and CBS five years ago, the COVID-19 pandemic and a costly push into streaming have diminished the standing of the once-formidable Hollywood player, according to interviews with media industry executives, company insiders and financial experts.

Paramount’s stock has plunged 60% since Redstone’s upbeat assessment in early 2022. (Shares closed under $12 on Thursday.) Shareholders have bolted, including legendary investor Warren Buffett, who this month acknowledged that buying Paramount stock (63 million shares) was a mistake, saying: “We lost quite a bit of money.”

...continued

swipe to next page

©2024 Los Angeles Times. Visit at latimes.com. Distributed by Tribune Content Agency, LLC.

Comments

blog comments powered by Disqus