Paramount CEO’s Message to Staff: Emphasize “Cost Management” and Prioritize Earnings Growth Amidst Deal Speculation

As rumors intensify regarding a potential sale, Bob Bakish penned a memorandum outlining tactics such as “working towards streaming profitability.” This entails a reduction in the production of local and international originals to attain the set objective.

Paramount Global president and CEO Bob Bakish on Thursday urged his staff to concentrate on “execution” amidst discussions about a potential deal involving the company. He emphasized that earnings growth is the primary focus for 2024.

The CEO delineated three strategies to achieve this goal, including “working towards streaming profitability” and “optimizing content with the most significant impact.” This implies a reduction in the production of local and international originals. Bakish provided a comprehensive overview of the strategic priorities for the new year during the initial “Bob Live” of 2024, a routine internal event resembling a town hall meeting.

Later in the day, he summarized key takeaways in a staff memorandum, acquired by The Hollywood Reporter. Bakish highlighted, “It’s no surprise that Paramount remains a topic of speculation. We’re a storied public company in a closely followed industry.” He emphasized, “But I have always believed the best thing we can do is concentrate on what we can control — execution.” This involves “leaning into what’s working while continually adjusting to current realities,” he explained. The memo comes amid recent reports of impending additional job reductions at Paramount.

For 2024, the Paramount CEO underscored, “Our priority is to drive earnings growth.” He stated, “And we’ll get there by growing our revenue while closely managing costs — a balance that will require every team, division, and brand to be aligned.”

His memorandum then outlined the three primary strategies to achieve that.

Firstly, he prioritized “maximizing content with the most significant impact,” emphasizing Paramount’s historical prowess in delivering mass, popular content. Bakish highlighted the appeal of Hollywood hits and stressed the need to focus on “the most powerful, resonant franchises, films, and series that perform across platforms globally.”

In the day-to-day operations, he clarified that this entails producing fewer local and international originals for their platforms, with exceptions for leading free-to-air networks in specific regions. Bakish specified a robust pipeline of local content for networks in Australia, Argentina, Chile, and the U.K. Additionally, the strategy involves maximizing global hits across various platforms and revenue streams, such as streaming, film, TV, and licensing, to ensure the highest return on investment.

The second strategy involves “driving to streaming profitability.” Bakish reminded the staff that during the third-quarter earnings call, the management team had indicated that “2022 was our year of peak investment,” positioning the company a year ahead of schedule in achieving this crucial metric.

For 2024, this signifies that “we will lean even further into large markets like the U.S., U.K., Canada, and Australia, where we have a strong multiplatform presence, our U.S. studio content resonates best, and where there is the greatest revenue potential.” Bakish emphasized the focus on key markets where Paramount has a substantial presence and highlighted the revenue potential in these regions.

In other significant markets across Europe, Latin America, and Asia, the approach involves a market-by-market strategy, leveraging the strength of local partnerships. This ensures the operation of the best model to drive local scale and viewership while effectively managing costs, according to Bakish. He added, “Globally, increasing subscriber engagement and retention across our platforms will also be critical priorities on our path to streaming profitability.”

Part of this strategy involves driving revenue across advertising, subscriptions, and licensing, “including through our recently announced Paramount+ branded destinations — while we continue to operate as efficiently as we can and reduce costs,” as stated by Bakish.

The final strategy revolves around “further unlocking the power of One Paramount,” according to the CEO. He acknowledged the progress made in this regard but emphasized the potential for more leveraging of the collective strength of the company. This entails ongoing collaboration across teams, time zones, and functions, focusing on initiatives like cross-promotion, innovative partnerships, data and insights utilization, and more. The aim is to optimize the assets and expertise within the company.

In his memo, Bakish also underscored industry challenges such as a soft ad market, a volatile macroeconomic environment, and two historic strikes in the past year. Additionally, he acknowledged the ongoing evolution of the streaming business, with industry sentiment and success metrics continuously shifting.

Bakish concluded by urging his staff to maintain their focus, stating, “In many ways, 2024 will be the next great step in our transformation, and we must evolve how we work to support that.”

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