• Shari Redstone's National Amusements stopped deal talks for the proposed merger of Paramount Global and Skydance in the eleventh hour and after weeks of negotiations.
• Paramount Global is now left under the direction of the so-called Office of the CEO — made up of three leaders who replaced Bob Bakish when he stepped down in April.
• On top of a nearly $15 billion debt load, the media giant is facing a competitive streaming environment, a slowdown in advertising, and rapidly shrinking cable bundle. What's next for Paramount now?

National Amusements stopped merger discussions between Paramount Global and Skydance this week — throwing into question what's next for the legacy media giant during a tumultuous period for the industry.

Paramount, like many of its peers, is grappling with how to make streaming a profitable business as it faces peak competition, a rapidly shrinking universe of cable-TV customers and a slowdown in the advertising market that has especially weighed on the bundle.

Now it's up to the three leaders at the helm of Paramount to figure out the company's best path forward.

Bob Bakish stepped down from the top post in April and was replaced by the so-called Office of the CEO: CBS CEO George Cheeks, Paramount Media Networks CEO Chris McCarthy and Paramount Pictures CEO Brian Robbins. The executives are trying to steer Paramount out of a rocky period while working under a structure that few companies have tried.

"It's very difficult for a trio of CEOs to work on a long term basis. It's almost unheard of. How will they make decisions on allocating capital and strategic priorities?" said Jessica Reif-Ehrlich, an analyst at BofA Securities.

On Wednesday, the leaders sent a memo to Paramount employees saying they would focus on their plan to turn the company around after the proposed deal didn't move forward.

"So, what does this mean for Paramount? While the Board will always remain open to exploring strategic alternatives that create value for shareholders, we continue to focus on executing the strategic plan we unveiled last week during the Annual Shareholder Meeting, which we are confident will set the stage for growth for Paramount," the trio said in the memo that CNBC obtained Wednesday.

No deal

After months of negotiations in a sale process that included various twists, National Amusements informed Paramount's special committee and the buying consortium that included Skydance and private equity firms RedBird Capital and KKR minutes before a vote that it was stopping the sale process.

The move came a little more than a week after Skydance and Paramount had agreed to financial terms of a merger that would have been valued at $8 billion.

The deal had been awaiting signoff from Redstone, who owns National Amusements, the controlling shareholder of 77% of class A Paramount shares.

In a statement Tuesday, National Amusements said that while it had "agreed to the economic terms that Skydance offered, there were other outstanding terms on which they could not come to agreement." National Amusements also voiced its support for Paramount's current leadership.

While those near the deal have offered conflicting reasons for why it was called off, a person familiar with the matter said Redstone turned down the offer after Skydance lowered the amount of money she would receive with the altered bid in order to shift some of it to the class B shareholders.

In the last iteration of the deal, Redstone would have received $2 billion for National Amusements and Skydance would have bought out roughly 50% of class B shares at $15 apiece, or $4.5 billion, leaving the holders with equity in the new company.

In recent days, other potential bidders for National Amusements emerged, according to reports. Redstone plans to explore selling her controlling stake in Paramount Global without an associated transaction involving merging studio assets, as Skydance had proposed.

While Apollo Global Management and Sony had formally expressed interest in "a full acquisition" of the company for $26 billion, Redstone favored a deal that kept Paramount whole, which was not the plan for these bidders, CNBC previously reported.

Path forward

Paramount's Office of the CEO acknowledged the company faces more uncertainty after the deal dissolved.

"We recognize that the last several months have not been easy as we manage through ongoing change and speculation," the leadership trio said in Wednesday's memo to employees. "And, we should all expect some of this to undoubtedly continue as the media industry and our business continue to evolve."

Though the company reached financial terms on the proposed deal with Skydance, Paramount's new leadership team outlined a plan at last week's shareholder meeting in the event a transaction didn't take place.

The strategic priorities that were highlighted included exploring streaming joint venture opportunities with other media companies, eliminating $500 million in costs through measures such as layoffs and divesting noncore assets.

The memo noted more would be discussed at a company town hall June 25. The leaders are also expected to flesh out more details of the plan during August's earnings call.

The executives set those priorities with an eye toward lowering Paramount's debt load and returning the company to investment grade status after it was downgraded earlier this year. Paramount has $14.6 billion in debt.

In the memo to employees Wednesday, Paramount's leadership team said it would focus on executing this plan.

"Work is already underway, as we focus on three pillars: Transforming our streaming strategy to accelerate its path to profitability; Streamlining the organization and reducing non-content costs; Optimizing our asset mix, by divesting some of our businesses to help pay down our debt," the leaders said in the memo.

Redstone has backed the trio of CEOs since they took over in late April, and voiced that support before introducing them during the shareholders' meeting presentation.

In Wednesday's memo, the leadership once again emphasized growing content and franchises while also focusing on slashing costs and lowering debt, a priority the executives outlined during their presentations.

But the unorthodox nature of the CEO office — which Redstone acknowledged during the shareholders call — has industry analysts wondering if the plan can succeed.

"The company needs to focus on a couple of things, like fixing the balance sheet so it gets flexibility back and focus on the businesses that really profit; also, possibly selling assets or changing the asset mix," said Reif-Ehrlich. "But this is a very difficult situation. Uncertainty is the worst thing."

Whether it's these CEOs putting this plan to work, or an acquirer that takes over, they have to contend with various challenges, said Robert Fishman, an analyst at MoffettNathanson, in a research note.

Among those, Paramount's earnings are driven by its traditional TV networks, which are primarily general entertainment — possibly the most challenged content in media, as Disney's Bob Iger said last year. A weak advertising market could also weigh on the company in the coming months.