WHEN: Today, Friday, February 9, 2024
WHERE: CNBC’s “Squawk on the Street”
Following is the unofficial transcript of a CNBC interview with Paramount President & CEO Bob Bakish on CNBC’s “Squawk on the Street” (M-F, 9AM-11AM ET) today, Friday, February 9. Following is a link to video on CNBC.com:
All references must be sourced to CNBC.
DAVID FABER: If ever it was the case, it is now all eyes on Las Vegas this weekend as Super Bowl LVIII heads to the Strip. We’re also keeping an eye as well on the state of advertising market, as the cost for a 30-second commercial tops 7 million bucks. Joining us now first on CNBC and live from Las Vegas, with his outlook, of course, ahead of the big game is Paramount CEO Bob Bakish. Bob, good to see you. Give me a rundown —
BOB BAKISH: Good to see you, David.
FABER: Good to see you.
Give me a rundown on — you know, you sold out on ads at this point and you’re getting, what, about $7 million for every 30 seconds?
BAKISH: So, look, Vegas is electric. Coming up to the biggest game of the year, and that’s coming off our highest-rated NFL season since CBS got the NFL back in 1998, a record for the divisional playoff game, all-time record. And to your point on the Super Bowl, we’ve already set the high watermark for advertising for a Super Bowl, and it’s quite likely we’ll set the high watermark for viewership. So, a lot of good things going on here in Vegas, and it’s great to be on CBS.
FABER: Yeah. You’re going to have it on CBS. It’s been many times, of course, in the past. I think you broadcast the game more than any other network. That said, Bob, I’d love to take you back a few days this week because there was something else in the sports world that happened which is this joint venture that was announced between Disney and Warner Bros. Discovery and Fox. And I would love to get your reaction to it, whether CBS was asked to be a part of it? And if not, why not?
BAKISH: Yeah. So, obviously, the sports development you talk earlier in the year, a lot of questions on that, by the way, and a lot of differences of opinion, but for us, you know, what we focus on is a broad strategy. And we’ve looked at sports only plays, including in digital, both on standalone basis and in the partners, but we continue to believe broad is better — you know, Paramount Plus, news, sports and amount of entertainment. If you look at the sports consumer, on Paramount Plus, believe it or not, 90 percent of their time, their engagement is with non-sports programming. So, sports is a great vehicle for bringing people in and for engaging them. But to make it work for the consumer and for the streaming platform if you will, we believe in that hybrid of sports and entertainment, and that’s why, by the way, you’ll see us launching a great entertainment show, “Halo”, coming out of the Super Bowl, on Paramount Plus —
FABER: Right.
BAKISH: — as well as, of course, we’re launching the CBS fall slate.
FABER: Yeah.
BAKISH: So, we like the broader play, and it’s continuing to work for us.
FABER: You know, I wonder, though, Bob, the presence of this new service, it will be priced fairly high. But nonetheless, do you not think it’s going to continue to put pressure on what we’ve been talking about for years, namely the cable bundle and linear cable networks? Because it would seem to me, young men perhaps would gravitate towards it, instead of getting a cable subscription and the like. Are you concerned it will have pressure on the overall bundle?
BAKISH: Look, I think there are lots of choices in the marketplace, both the bundle and off bundle. We continue to be a supplier to the MVPDs, VMVPDs, in close partnership. We’re not only providing linear feeds but streaming product, as well as advanced ad sales. So it will be part of the equation. Again, a lot of questions with this product, including related to pricing, etc. But it’s just another faction. Again, we look at, moving forward, continuing to program CBS with sports being a slice of the wheel and Paramount Plus, and we’re feeling very good about that trajectory.
FABER: Yeah. You know, you — I think you did a carriage deal already with our parent company Comcast recently, but I believe you got a couple more coming up with Charter and Dish. Charter in particular, I wonder, given what they did with Disney last year, does that put pressure on you? Again, the same idea being that you got a consumer who already has Paramount Plus, so why are they double paying? And how are you going to work with cable providers who say, yeah, we don’t want our customer double paying and they should get Paramount Plus for free?
BAKISH: So, look, we’ve been — we’re a cornerstone provider to the distributors in the U.S. and frankly around the world. We have evolved our product line along with the industry and the transformation as I said, adding streaming product, by the way, both free Pluto and paying Paramount Plus, as well as partnering in ad sales. I’ve been doing this at the CEO level for eight years now, and we’ve gotten every deal done. We’ve lapped them all. We’ve done it without going dark. And so, look, these negotiations, if you will, aren’t getting simpler, but we continue to get business done because we provide high quality content that American consumers want to view, including, by the way, the NFL, but also more broadly speaking, Grammys last weekend, 16 million people watched that. So again, our content connects with consumers and we have a model that has different levers to pull with distributors to get deals done.
FABER: Yes, you’re confident. I mean, of course, you can get the deals done, but the question is, at what price? You’re confident you can continue to deliver value on these deals, that your shareholders will actually be happy with?
BAKISH: I’m confident that our content continues to matter to them. I’m confident that we will continue to provide solutions. I’m confident that we can evolve our specific structure to meet their needs and move in different directions. By the way, different distributors have different points view of on what they want to do in terms of moving forward, and again, we’re adapting to that, and I feel quite good about it.
FABER: You know, Bob, you mentioned you’ve been CEO for eight years. I don’t know if you’ll be in the seat another eight. But your NFL deal goes almost that long. I wonder, though, given the incredible popularity of the NFL, how you see the next go-round in terms of negotiation, particularly with the presence and growing presence of the Amazons and the Apples and even the Netflixes with seemingly endless ability to pay for this? You know, is getting to get hard for a company like yours to afford the NFL one day?
BAKISH: Look, we have a great partnership with the NFL, with Roger, with Hans, with Brian, et cetera. And as you point out, that deal goes through the next decade, so it’s through like 2032. So, it will be a while until we negotiate with them again. But it’s a great partnership. They love us. And again, we just set the viewing bar for CBS since we last picked it up in 1998. We had the record divisional playoff games. So broadcast platforms, CBS, continues to be extremely important to the NFL, and I think all the leagues look at that and if they don’t have broadcast, they regret it. Add to that, we do illuminate on streaming and Paramount Plus, fastest growing service in terms of net ads since we rebranded.
FABER: Right.
BAKISH: It’s a powerhouse combination and we’re very strong with the NFL.
FABER: Yeah. You mentioned attending the Grammys. Our Julia Boorstin spoke recently to Byron Allen who says he made a bid for Paramount. He said or he told Julia that he ran into Bob Bakish at the Grammys and reported that you said, thank you for the offer. We’re happy you submitted. Is that true?
BAKISH: It is true I was at the Grammys. It is true I saw him. I’m not going to get into what we talked about, but it was, again, a great show, over 16 million people, really, and that was up 30 percent from prior year, highest since 2020.
FABER: I hear you on the Grammys, Bob, but I wanted to know about Byron Allen and/or all the speculation surrounding the company, including Redbird and David Allison, Byron Allen making — well, it’s unclear what he made. You know, is Paramount conceivably going to be sold?
BAKISH: Look, job one for the management team and the board quite frankly of Paramount is maximizing shareholder value. We’re focused on day-to-day execution because that is the most predictable creator of value. But, of course, we look more broadly at options, and we look at a lot of things. As to what direction we’re going to go, we’ll see. But what it really tells you is there’s extraordinary value in Paramount Global. This is an unmatched content collection in the world, our studios, our libraries, really —
FABER: Yeah.
BAKISH: — incredible value creators in content, so — again, a lot of value here.
FABER: What — you know, you said recently in a memo to employees that we’ve learned a lot since we launched Paramount Plus nearly three years ago. So, what have you learned that’s going to inform your ability to get that thing to profitability?
BAKISH: Well, as we last said on our third quarter call, and we’re coming up to our fourth quarter call in two weeks, so I have to be careful about how I answer this question, but we are very much focused on building Paramount Plus into a robust profitable business. We always have been. As we said on our third quarter call, we believe that 2022 was actually our peak investment year versus ’23 which we guided to.
We feel very good about ’24 and we’ll have more to talk about that at the end of the month on our call.
FABER: Yeah. All right. Just to come back quickly to Byron Allen, was it a real bid he made?
BAKISH: I’m not going to comment on speculation as you might guess, David.
FABER: Yeah.
BAKISH: Other than to say, we are — our focus on creating shareholder value even through execution or through alternate means, and —
FABER: Got it.
BAKISH: — that’s our focus.
FABER: Bob, we’re going to end on Taylor Swift, because how could we not? How are you guys going to cover her at the game? Do we have a betting line? And how many times CBS is going to show her? And will she get there?
BAKISH: I’m sure she’ll get here, and I’m sure there are lines out there. I’ll just say that she is an extraordinary talent, obviously, creates a lot of excitement in the music space and has brought incremental value to the game. As I said, you know, I’m sure she hasn’t hurt ratings. As to what we’re going to do in terms of coverage, you are just going to have to watch and see, and I’m sure, you like the rest of the world, will be watching.
FABER: Without a doubt I will be watching. You think you under priced your ads to come back to where we started given Taylor Swift is going to bring in more viewers?
BAKISH: You could debate that. But, again, we just set the high watermark for a Super Bowl for all time for advertising. So I think we’re doing pretty well.
FABER: Bob, always appreciate it. Enjoy the game. And I’m sure we’ll see you soon. Thank you.
BAKISH: Thanks, David. Take care.
FABER: You, too.
