Paramount Global missed Wall Street expectations in its fourth quarter of 2024, after its results were weighed down by operating losses in its direct-to-consumer and filmed entertainment divisions and lower revenue and operating profit in its TV/Media segment.
Here are the top-line results:
Net loss: $224 million, compared to a profit of $514 million a year ago.
Earnings Per Share: A loss of 33 cents per share. On an adjusted basis, the company posted a loss of 11 cents per share, compared to a profit of 10 cents per share expected by analysts surveyed by Zacks Investment Research.
Revenue: $7.98 billion, up 5% year over year, compared to $8.14 billion expected by Zacks.
Subscribers: Added 5.6 million subscribers during the quarter and 10 million for the year for a total of 77.5 million.
The streaming division, which includes Paramount+ and Pluto TV, narrowed its losses by 42% to $286 million during the quarter and 70% to $497 million for the year, with improvements driven by revenue growth and cost efficiencies.
Overall streaming revenue climbed 8% to $2.01 billion during the quarter, which included a 9% increase in advertising revenue to $574 million due to growth at Paramount+ and Pluto, including higher political advertising; a 7% increase in subscription revenue to $1.44 billion driven by subscriber growth; and a 50% drop in licensing revenue to $2 million. Paramount+, which increased revenue by 16% to $1.56 billion for the quarter and 33% to $5.9 billion for the year, is on track to reach full year domestic profitability in 2025.
Meanwhile, the TV/Media segment saw total revenue decline 4% to $4.98 billion, while the segment’s operating profit fell 17% to $949 million, driven by lower revenue. Advertising revenue fell 4% to $2.2 billion driven by declines in linear advertising and fewer sports on CBS, offset by higher political advertising. Affiliate and subscription revenue fell 7% to 1.87 billion, reflecting subscriber declines, partially offset by price increases. But licensing and other revenue grew 3% to $911 million.
The Filmed Entertainment segment posted a 67% jump in revenue to $1.08 billion, but higher marketing costs associated with the theatrical releases of five films in the quarter led to an operating loss of $42 million, compared to a profit of $24 million a year ago. Theatrical revenue grew increased $336 million to $414 million, driven by the releases of “Gladiator II” and “Sonic the Hedgehog 3.” Licensing and other revenues increased 17% to $661 million, reflecting a higher volume of licensing of library titles and higher studio facility revenue compared with 2023, which was impacted by the Hollywood labor strikes.
Paramount achieved its targeted annual run rate cost savings of $500 million in 2024. Free cash flow came in at $56 million for the quarter and $489 million for the year.
The latest quarterly results comes as Paramount awaits FCC approval of its pending $8 billion merger with Skydance Media, which is on track to close in the first half of 2025. The agency’s review is due to a required transfer of broadcast licenses of Paramount’s 28 owned-and-operated local TV.
But Donald Trump’s new FCC chairman Brendan Carr, has put increased scrutiny on Paramount-owned CBS by reviving a previously dismissed “news distortion” complaint against the network from The Center for American Rights — a self-described “nonpartisan public interest law firm” — over the editing of a “60 Minutes” interview with former Vice President Kamala Harris. Carr has said that the complaint would “likely arise” in his review of the transaction.
In addition to making the interview transcripts and footage public, Carr is also seeking comment from the public to weigh in on the agency’s investigation. Public comments will be due March 7, with replies due March 24.
That interview has also resulted in a $20 billion lawsuit from Trump himself, who alleges that it was manipulated to make Harris look good ahead of the 2024 election. CBS has maintained that it did nothing wrong and has said the entire foundation of Trump’s argument is “belied” by the complete transcripts for the interview, which were handed over to the FCC, released publicly and included in Trump’s amended complaint — in which he doubled the damages sought after initially seeking $10 billion.
Both Trump and CBS have been in communication about a possible settlement and continue to consider “alternative dispute resolution options,” according to a recent court filing. If the case moves to a jury trial, it will take place for two weeks in August 2026, per the filing.
The Skydance deal also faces opposition from some Paramount shareholders, with a judge granting the Employees’ Retirement System of Rhode Island (ERSI) request to obtain books and records related to the deal as it investigates whether the sale resulted in “potential corporate wrongdoing” by Paramount, its board of directors and controlling shareholder Shari Redstone’s National Amusements.
In addition to ERSI, Mario Gabelli — the largest class A Paramount shareholder behind Redstone — has filed a books and records request to look into the finer details of the transaction and a formal complaint in the Delaware Court of Chancery seeking to compel Paramount to turn over all of its transaction-related documents. Gabelli has also filed a petition with the FCC, asking the agency to pause its review as he investigates “potential fiduciary and/or federal securities violations” against the media giant’s minority shareholders.
Other Paramount shareholders who have called out the deal include Scott Baker, who has filed a proposed class-action lawsuit arguing the Skydance deal could cost shareholders $1.65 billion in damages, as well as the California State Teachers’ Retirement System (CalSTRS), which believes the damages could exceed that figure. Five of New York City’s pension funds have also challenged the deal, arguing Paramount’s board ignored a superior $13.5 billion offer from Project Rise Partners.
In an updated S4 filing, Paramount revealed that other class A and B shareholders have delivered demand letters seeking to inspect the company’s books and records to investigate breaches of fiduciary duty. Some class B shareholders have also sent demand letters related to alleged omissions in New Paramount’s registration statement.
In addition to Gabelli, The Center for American Rights, Hollywood’s Teamsters union, the Latino-owned entertainment company Fuse Media and LiveVideoAI.Corp have all filed petitions with the FCC.
If the consummation of the transaction does not occur before April 7, subject to two automatic 90-day extensions, or if a regulator blocks the merger, both Paramount and Skydance have the option of terminating the deal. Exercising that option would leave Paramount on the hook to pay Skydance a $400 million breakup fee.
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