Paramount Global Sees $1 Billion Charge in Q1 for Layoffs and Programming Write Offs
Paramount Global said it narrowed losses in its streaming business in its fourth quarter while grappling with declines in revenue in its larger TV and movie operations, echoing a dynamic followed by media rivals including Warner Bros. Discovery and Disney.
The New York owner of the CBS broadcast network, the Paramount+ streaming hub and the Nickelodeon cable channel said it saw a 6% decline in overall revenue during the period as the effects of last year’s Hollywood strikes weighed on its film and TV operations, which grappled with declines in advertising sales, content licensing fees and affiliate revenues.
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In remarks, Paramount Global CFO Naveen Chopra emphasized an increasing focus on cutting costs, and said the company anticipated a charge of $1 billion in the first quarter for layoffs and restructuring. Paramount recently laid off about 800 staffers. Chopra also said that those costs would include $200 million tied to restructuring and the rest for programming write-off charges, particularly as it refines its international content strategy.
Bob Bakish, the CEO, emphasized the company’s efforts to move its streaming business into profitability, noting an expectation that Paramount+ would be profitable in the U.S. by the end of 2025. “Looking ahead, we continue to be focused on maximizing the return on our content investments and scaling streaming, while transforming the cost base of our business. And I couldn’t be more thrilled with the early momentum we’ve had across every platform in 2024, demonstrating the power of our strategy and assets,” he said in a statement.
Paramount narrowed losses in its direct-to-consumer business by $85 million in the quarter, cutting shortfalls to $490 million from $575 million in the year-earlier period. The company said Paramount+ had 67.5 million by the end of the quarter, with 4.1 million net additions in the period.
But even as advertising and subscriptions rose at Paramount+ and other broadband venues, revenues fell at the company’s traditional businesses. Paramount’s TV networks saw advertising fall 15%, while affiliate fees dipped 1% and licensing was off 25%. The company noted that it is still working its way through declines in cable subscribers and “continued softness in the global advertising market.” Film revenues, meanwhile, were off 31%, due in part to a $19 million decline in revenue from current releases and a 32% tumble in revenue from content licensing and digital home viewing.
During a call with investors, Bakish articulated a strategy of being “laser focused” on making streaming profitable and keeping an eye on production costs for movies and TV. Executives described a move to rely more heavily on less costly program formats on TV and said the company was deploying its content across its various platforms in strategic ways, such as putting the first season of the Sylvester Stallone drama “Tulsa King” on the CBS network this year just ahead of the launch of the series’ second season on Paramount+.
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