Paramount Global downgraded by Needham, analysts flag worries over CEO departure

Investing.com -- "Rising uncertainty" is swirling around Paramount Global after an announcement that Chief Executive Bob Bakish has stepped down, analysts at Needham said in a note downgrading their rating of the Hollywood media giant to "Hold" from "Buy."

Bakish's departure from Paramount comes amid ongoing talks over a potential tie-up with David Ellison's production house Skydance Media.

George Cheeks, CEO of CBS, Chris McCarthy, CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks and Brian Robbins, Chief Executive Officer of Paramount Pictures and Nickelodeon were all appointed to the newly created Office of the CEO to "lead and oversee the company moving forward," the company said.

The Needham analysts cast doubt over the change, arguing that Paramount needs stable leadership to navigate the discussions with Skydance and combat fierce competition to its crucial Paramount+ streaming service.

"We've never heard anyone argue that a committee of 3 is better at creating value for shareholders or employees than a single leader with Board accountability," they said. "None of this leadership drama, so close to selling the company, increases value for shareholders."

Various media sources reported on Monday that Skydance has sweetened its bid to take control of Paramount, offering to inject $3 billion in the combined company that can used to pay down debt and repurchase stock.

Yasin Ebrahim contributed to this report.