Outspoken media analyst Rich Greenfield is calling on Paramount Global controlling shareholder Shari Redstone to fire the company’s CEO, Bob Bakish.
According to Greenfield, creating and trying to build Paramount Plus into a streaming service that can compete with Netflix and Disney Plus has been a costly strategic mistake.
Because Bakish has continued to double down on streaming, Greenfield sees firing Bakish as the surest way to change that strategy.
Greenfield believes Paramount would be better off as an “arms dealer,” profitably supplying programming to companies competing in the streaming wars.
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The launch of Paramount Plus “left Paramount with a subscale streaming platform, a weakened relationship with its MVPD/vMVPD partners and an over-levered balance sheet as linear TV headwinds grow stiffer,” Greenfield said in a report Monday.
“To make matters worse, it is not even clear what the best course of action is now given the aforementioned strategic missteps that are now hard or impossible to quickly reverse,” Greenfield said.
One of Bakish’s other missteps, as far as Greenfield is concerned, was the decision not to sell Showtime in a deal worth $3 billion.
“After Redstone came up with the idea to sell Showtime, Bakish convinced the Board that keeping the asset was a better idea to financially engineer improved profitability at Paramount Plus and increase the subscriber base of Paramount Plus by giving Paramount Plus to existing Showtime subscribers,” Greenfield noted.
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The $3 billion a sale could have brought in would have helped Paramount Global’s balance sheet. Plus, it would have cleared up an awkward situation with distributors.
“So now there are millions of Showtime subscribers who are getting a streaming service that includes the linear CBS network and a wide array of the content found on Paramount’s linear cable networks, while ALSO paying for that same content as part of their basic cable subscription,” according to Greenfield.
Greenfield said before Viacom was combined with CBS to form Paramount Global, “there is no doubt that Bob Bakish was the right CEO to helm Viacom in 2016.” Greenfield credits Bakish with playing a critical role in improving Viacom’s relationships with distributors and improving internal morale at the company.
Greenfield also endorses Redstone’s decision to combine Viacom with CBS as being prescient in seeing that scale would be important in the media business and consolidation would continue.
But he noted that Viacom was worth $12 billion and CBS was worth $18 billion five years ago. Now the combined company is worth only $7.5 billion.
“Given our belief that Bob Bakish does not agree with our stated strategy and is directly responsible for what is today Paramount Plus, we believe Shari Redstone and National Amusements must terminate Bob Bakish and seek new leadership at Paramount immediately," Greenfield concluded. "It may already be too late to save Paramount, but a new strategic direction is the best hope Redstone and National Amusements have for saving what is left of the company.”
