Paramount Global Reports Mixed Q2 Results, Announces Layoffs and Skydance Media Transaction

Leadership Reports $5.99bn Write-Down of Cable Business

Paramount Global leadership reported a $5.99bn write-down of the cable business as they acknowledged the ongoing decline in linear TV and prepared for the transaction with Skydance Media.

Q2 Results

In a mixed second quarter that brought an overall 11% revenue drop, the streaming business swung into its first quarterly profit during the period ended June 30. Co-CEOs Brian Robbins, George Cheeks, and Chris McCarthy said they will start to lay off 15% of the US-based workforce in the coming weeks, equating to approximately 2,000 people.

Layoffs and Cost Savings

The layoffs are part of previously announced $500m in cost savings, which are part of $2bn in savings identified by Skydance Media. Staff in marketing and communications, finance, legal, technology, and other support functions will be affected. The lay-offs are expected to be completed by the end of the year. The company laid off approximately 800 staff in February.

Streaming Segment

In the streaming segment, subscriptions tumbled by 2.8m to 68m, which the company attributed mostly to its planned exit from a hard bundle agreement in South Korea. However, the direct-to-consumer business was profitable for the quarter, with numbers swinging $450m year-on-year to $26m due to revenue growth and lower costs for marketing and content.

Paramount+ Revenue Growth

Paramount+ revenue grew 46%, driven by year-over-year subscriber growth and a 26% increase in average revenue per user expansion. The co-CEOs said they are exploring partnerships for the platform, adding that in Q3 and Q4 they expect streaming to revert to a loss and subscriptions to grow due to the timing of upcoming releases. They expect Paramount+ to become profitable in the US in 2025.

Other Business Segments

Revenue at the filmed entertainment division fell 18% to $679m, while theatrical revenues dropped 40%, reflecting a tough comparison to the release of Transformers: Rise Of The Beasts in the prior year. The well-documented linear television woes continued as revenues at the TV media division fell by 17% to $4.3bn, and advertising revenue fell 11% to $1.7bn.

Conclusion

Paramount Global’s mixed Q2 results reflect the ongoing challenges in the linear TV industry and the company’s efforts to adapt to changing consumer habits. While the company reported a net loss, it also made significant progress in its streaming business and announced a major transaction with Skydance Media.

FAQs

* What is the reason for the $5.99bn write-down of the cable business?
The write-down is due to the ongoing decline in linear TV and the company’s preparation for the transaction with Skydance Media.
* How many people will be laid off as part of the cost savings plan?
Approximately 2,000 people will be laid off, which is 15% of the US-based workforce.
* What is the expected timeline for the completion of the Skydance Media transaction?
The transaction is expected to close in the first half of 2025, subject to customary closing conditions and regulatory hurdles.