Paramount International wrote down the worth of its cable networks by practically $6 billion and introduced it could lower 15% of jobs on Thursday, at the same time as the corporate’s streaming enterprise reported its first quarterly revenue. Paramount inventory rose greater than 5% in prolonged buying and selling.
The impairment displays a shrinking viewers for cable TV networks reminiscent of Nickelodeon, MTV and Comedy Central, a decline that interprets to decrease promoting income. The announcement comes a day after Warner Bros Discovery took a $9 billion write-down on its TV property.
The pending merger with Skydance Media compelled Paramount to reassess the worth of every of its models to higher mirror their price to the corporate, ensuing within the write-down. The magnitude of the reconciliation dragged Paramount into an working lack of $5.3 billion for the second quarter.
The job cuts might be carried out in coming weeks and concentrate on market, finance and authorized positions, executives stated on a convention name with buyers and analysts. That will quantity to shut to three,200 positions, primarily based on the 21,900 full- and part-time staff Paramount reported on the finish of final yr, and executives stated it could result in costs of $300-400 million within the third quarter.
Furthermore, Paramount is quite a lot of extra cost-reduction plans, Chief Monetary Officer Naveen Chopra stated.
Paramount additionally reported second-quarter adjusted working revenue forward of Wall Road targets, with earnings of $867 million, or 54 cents a share, topping the consensus of 12 cents a share, in line with LSEG.
The corporate’s streaming enterprise, which incorporates the Paramount+ subscription service and its free, ad-supported sibling, PlutoTV, posted its first quarterly revenue, fueled by progress in subscription and advert income. The direct-to-consumer unit reported an working earnings of $26 million within the second quarter, in contrast with a lack of $424 million a yr in the past.
“We’re on observe to succeed in home profitability for Paramount+ in 2025,” Paramount co-CEOs George Cheeks, Chris McCarthy and Brian Robbins stated in a joint assertion.
The corporate reported income of $6.8 billion, down 11% from the identical interval a yr in the past. That missed analyst forecasts of $7.2 billion for the quarter ended June 30.
The tv unit, which incorporates prime time’s top-rated community, CBS, in addition to the corporate’s cable networks, reported quarterly income of practically $4.3 billion. The 17% decline in income from a yr in the past displays a decrease advert income and charges paid to license its exhibits. Working earnings for the tv group fell 15% to $1 billion.
“Paramount and Warner Bros Discovery’s writedowns this week add nails to (conventional) TV’s coffin,” stated Ross Benes, tv and streaming analyst at Emarketer. “Paramount’s finest likelihood for an exit is thru Skydance. The longer they wait, the much less the corporate might be price.”
Paramount’s movie enterprise reported a lack of $54 million, regardless of releases like “IF” topping the field workplace in its home debut, and “A Quiet Place: Day One” recording the very best monetary efficiency for the horror franchise.