The saga of Paramount Global’s future is more exciting than a lot of the studio’s films. And with the bombshells in Monday’s earnings report, things are becoming even more dramatic. After multiple reports swirled early Monday, Paramount announced that CEO Bob Bakish is leaving the company. This comes after David Ellison’s Skydance, which has been in negotiations to take over the entertainment giant, made its “best and final offer” Sunday. 

Shares of Paramount closed up more than 2% Monday on the reports. After the bell, the company reported Q1 revenue of $7.7 billion, up 51% year over year. Here’s where things stand.

Who will run Paramount now?

For now, the company will be run by an “Office of the CEO,” consisting of three executives, says the company. Paramount Pictures CEO Brian Robbins, CBS chief executive George Cheeks, and MTV Entertainment Group President Chris McCarthy will all assume elements of the CEO position in the interim as part of a leadership committee.

Should the Skydance deal close, Ellison is expected to assume the CEO role.

Why is Bakish leaving?

Bakish has been with the company for decades and was named Paramount CEO in 2019, with the strong backing of Shari Redstone. The relationship between the two has suffered, though, with Skydance’s $2 billion offer for her National Amusements, which has a 77% voting share in Paramount.

Bakish opposes that deal—and by removing him from his position, Redstone could be herding other investors toward supporting it, as the company would effectively be destabilized without a CEO. S&P, in late March, downgraded Paramount’s debt to junk, citing “accelerating declines” in its traditional TV business and continued uncertainty about the streaming unit. Without a CEO, the company’s future could be thrown into question.

Was Bakish on Monday’s earnings call?

Bakish was not on the earnings call Monday. On the call, Robbins, Cheeks, and McCarthy thanked Bakish for his leadership told investors they were finalizing a strategic plan.

“George, Chris, and I have been collaborating with each other for years, transforming our businesses, and most importantly, making hit films and television, which is the core of Paramount Global,” said Robbins. “Each of us has deep industry knowledge, relationships, and experience as business leaders and creative executives. We will bring all of that to bear as we chart a course forward for our company. We look forward to coming back to you in short order to share our plan and discussing it all in detail at that time.”

The executives did not take any questions from analysts, and the call lasted under 9 minutes.

Does this mean a deal is imminent with Skydance?

Not necessarily. Paramount agreed, on April 4, to pause talks with all suitors for 30 days to focus on negotiations with Skydance. That period of exclusivity is about to end, which is why the “best and final” language was added to the last round of concessions made by Ellison. (The exclusivity window could be extended by the board.)

Redstone is now reportedly open to a “majority of the minority” vote, meaning minority shareholders will have a say in what happens next. If they overwhelmingly say they don’t want this merger with Skydance, it could scuttle the deal.

Why do some shareholders object to a deal with Skydance?

The Skydance offer, argue some shareholder groups, will negatively impact the value of Paramount shares for common shareholders. Skydance’s offer, technically, is solely focused on buying National Amusements, but the company is also insisting it will be allowed to merge that company and Paramount, which requires permissions from an independent committee of directors.

If the deal goes through, Skydance would be valued at about $5 billion. Ellison plans to raise between $4.5 and $5 billion in new equity, according to some reports, which opponents say would devalue the stock owned by current shareholders.   

To appease those critics, Skydance has proposed a stock buyback of $3 billion, paying a premium to Paramount’s current share price, Bloomberg reports.

If the Skydance deal falls through, who else could buy Paramount?

Warner Bros. is still out of the running, but Sony and Apollo Global are said to be standing on the sidelines, ready to jump in if given the opportunity. The companies have discussed a joint bid, but have not made an official offer yet, given the period of exclusivity Skydance currently enjoys. That bid, the New York Times reports, would be an all-cash offer, which would take Paramount private. The Sony/Apollo deal does not include a buyout of National Amusements. 

Update, April 29, 2024: This article has been updated with Paramount’s Q1 earnings information, updates on the CEO’s departure, and the company’s earnings call.