Still can’t believe in calendar 2024 at least one knucklehead here wa confidently lecturing others about not understanding the power of the cable sub model and how it protects and insulates Rutgers. No awareness of the real world at all.
Paramount Writes Down Value of Cable-TV Business by $6 Billion
Move comes one day after rival Warner Bros. Discovery lowered valuation of its cable networks by $9.1 billion
Isabella SimonettiAug. 8, 2024 at 4:37 pm
The announcements from two of the country’s largest TV conglomerates come as cable-TV networks are suffering from the acceleration of cord-cutting, declining ratings and a weak advertising market. Streaming platforms are taking audiences and subscribers away from what was once the engine powering the media industry.
The decision by Paramount, home of channels including Comedy Central, MTV and Nickelodeon, to reassess the value of its cable-TV business is tied to its recently announced deal to merge with Skydance Media, according to a person familiar with the matter.
“The challenges of the linear ecosystem are becoming even more apparent especially given the pressure on linear advertising and the competition for ad budgets with connected TV and streaming players and the increasing pressure with cord-cutting,” said Robert Fishman, an analyst with MoffettNathanson.
Programmers are also facing pressure from distributors increasingly willing to play hardball when the time comes to renew carriage agreements. Earlier this year, customers of Charter Communications’ Spectrum TV service got free access to Paramount’s ad-supported streaming services with their cable packages under a new distribution deal between the two companies. That agreement followed a similar model adopted after a high-profile feud between Charter and Disney last year.
Shares of Paramount were up roughly 5.7% in after-hours trading.
Paramount, which also owns the namesake movie studio and the streaming services including Paramount+, said it lost $5.41 billion in the second quarter, largely due to the goodwill impairment charge it booked for its cable-networks unit. Revenue fell 11% to $6.81 billion.
The company said its streaming business—which beyond Paramount+ also includes Pluto TV—reported its first-ever quarterly profit. But Paramount+ lost 2.8 million subscribers in the quarter, which the company attributed to the exit from a hard bundle agreement in South Korea.
‘Yellowstone,’ another CBS series. Photo: CBS
Disney DIS 0.00%, one of Paramount’s rivals, also reported streaming profitability for the first time earlier this week, one quarter ahead of schedule.
Revenue in Paramount’s filmed entertainment business fell by 18%, the company said. Theatrical revenues suffered from the comparison with the year-earlier quarter, when “Transformers: Rise of the Beasts” was released.
Paramount is currently being run by “the office of the CEO” made up of its three divisional heads—Chris McCarthy, George Cheeks and Brian Robbins. The CEOs earlier this year said the company’s goal was to reach $500 million in annual cost savings. On Thursday, they said the company would continue to “aggressively execute” that strategic plan.
In July, David Ellison’s Skydance Media agreed to a two-step deal under which it will buy National Amusements, the privately held movie theater company through which Shari Redstone controls Paramount. In the second step of the deal, Skydance will merge with Paramount.
The deal is subject to a “go-shop period,” where other potential buyers can make bids for both businesses, which ends later this month. The company said it expects the deal to close in the first half of 2025.
Write to Isabella Simonetti at
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