KEY TAKEAWAYS
- Paramount Global wrote down the value of its cable-TV networks by nearly $6 billion, a day after Warner Bros. Discovery also took a massive charge.
- It also announced plans to save at least $500 million in annualized costs, and will cut about 2,000 jobs, or 15% of its U.S. workforce.
- Paramount shares surged in premarket trading Friday.
Paramount Global (PARA) wrote down the value of its cable-TV networks by nearly $6 billion, a day after Warner Bros. Discovery (WBD) also took a massive charge, as streaming services like Netflix (NFLX) continue to disrupt traditional networks.
It also announced plans to save at least $500 million in annualized costs, and will cut about 2,000 jobs, or 15% of its U.S. workforce, the owner of CBS, MTV, and Nickelodeon said in its earnings call.
Still, investors welcomed the news of the cuts, with Paramount’s shares rising 5% before the opening bell Friday.
Paramount’s Q2 Sales Drop 11%
Paramount, whose controlling shareholder, Shari Redstone’s National Amusements, struck a deal after months of talks to merge with Skydance Media last month, also reported an 11% year-over-year decline in second-quarter sales to $6.81 billion.
That included a 17% revenue drop in its TV Media unit, which was “primarily driven by fluctuations in licensing revenues.”
Paramount+ Streaming Subscribers Fall
Subscribers of its Paramount+ streaming service also fell by 2.8 million to 68 million during the second quarter, “principally reflecting the planned exit from a hard bundle agreement in South Korea.”
The company said, however, that it is on track for Paramount+ to reach domestic profitability in 2025.