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Paramount earmarks $3 billion in cuts

Paramount bosses have earmarked close to A$3 billion in cost savings following this week’s announcement that Skydance Media will acquire Paramount’s owner, National Amusements, and merge Skydance with Paramount Global to form New Paramount.

In a transaction presentation seen by Mumbrella, Paramount outlined “significant opportunities for value creation across the enterprise following a comprehensive review and reframing of the legacy business”, writing that “detailed, bottom-up initiatives have ability to produce $2bn+ [$2.96 billion] run-rate cost efficiencies”, with an “accelerated delivery of savings” that will see half of these savings delivered within the first year. This means A$1.5 billion in cost cuts within 12 months.

Paramount’s current co-CEOs, George Cheeks, Chris McCarthy, and Brian Robbins, sent a memo to staffers that outlined their intentions to “modernise our organisation by streamlining teams, eliminating duplicative functions and reducing the size of our workforce”, as well as exploring opportunities to “optimise our asset mix by divesting some of our assets”.

This leaves Network 10, which was bought by Paramount’s CBS in 2017, in a precarious position.

According to Capital Brief, which cites “three sources familiar with the meeting”, Network 10 president Beverley McGarvey held a town hall last week, although this was before the sale was announced.

New Paramount will be led by David Ellison as chairman and CEO, and ex-NBCUniversal CEO Jeff Shell as president.

The two executives spoke to analysts earlier this week. “There are assets here which we think are not strategic to where we’re going that, if we were to get a buyer to pay a price that we thought was compelling, we would absolutely do that,” Shell said, according to Bloomberg.

“I know current management is also talking about a couple of transactions that, if they get the right price, we’ll be supportive of.”

Shell also told analysts the team has taken “a bottom up approach to the business” when squirreling out savings.

Network 10 declined to comment on how the cost cutting will impact local operations.

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