None of the traditional media companies had more riding on fourth-quarter results than Paramount Global. The company entered the quarter in a beleaguered state, after years of declining revenues from its legacy cable business and suffering huge losses in its streaming division Paramount+.
Various parties were circling, having expressed interest in acquiring some or all of the assets. Paramount’s chief Shari Redstone was reported to be ready to hear offers, and many have commented that a string of recent layoffs was intended to reduce operating costs to position the company for a sale.
So a lot was seen to be riding on the company’s Q4 results, which would set the tone for continued negotiations with potential suitors. With a disappointing fourth quarter, the company may feel increased pressure to take the best offer available and sell. But if earnings were upbeat, this pressure would ease the timeline of any potential sale might be extended.
Ultimately, the results were mixed, but with some reason for optimism. While Paramount Global’s revenue came in lower than expected, profits were higher and the troubled streaming platform posted strong results. The Paramount+ streaming service added over 4 million new subscribers during the quarter, reaching 67.5 million at the end of 2023. Revenue from streaming grew 69% year-over-year due to price increases and growing ad revenue. In the earnings call with investors, CEO Bob Bakish projected that Paramount+ would be profitable by 2025.
With a decline in revenue from the company’s theatrical and cable businesses, the Q4 report produced a muted response from Wall Street, with share prices relatively unchanged at week’s end. But a stable result may be viewed as positive news for the company, having avoided a more negative scenario.
Warner Bros. Discovery has been reported as a potential suitor for Paramount, but its own weak Q4 earnings report led to its share price falling even lower than Paramount’s. Shortly after Paramount announced its earnings, WBD chief David Zaslav called off its negotiations with Paramount, most likely as a result of Warner’s weakened financial standing.
See also: Paramount Focuses on Earnings Growth But Wall Street Lacks Enthusiasm (Hollywood Reporter)