Paramount Global took a $5.98 billion write-down as its linear cable TV networks continued to lose revenue.
The move came as the company — which is in the process of being sold to Skydance Media — reported positive operating income before depreciation and amortization of $26 million in the second quarter for its direct-to-consumer streaming businesses, compared to a $424 million loss a year ago.
Direct-to-consumer revenue rose 13% to $1.9 billion, with ad revenue up 16% and subscription revenue up 12%. Paramount Plus revenue was up 46%.
Paramount Plus lost 2.8 million subscribers in the quarter, leaving it with 68 million. The company said the subscriber losses stemmed mainly from exiting a bundle agreement in South Korea.
The huge writedown on the cable networks followed a even bigger charge of $9 billion taken by Warner Bros. Discovery on Wednesday as the TV industry continues to struggle with the pivot to streaming.
The charge left Paramount with a second-quarter net loss of $5.4 billion, or $8.12 per share, compared to a net loss of $299 million, or 48 cents a share, a year ago.
Revenue fell 11% to 6.8 billion.
Adjusted OIBDA rose 43% to $867 million.
At the company’s TV segment, adjusted OIBDA was down 1% to $2.5 billion. Revenue fell 17% to $4.3 billion.
Advertising revenue was down 11% to $1.7 billion, while affiliate and subscription revenue dropped 5% to $1.9 billion. Licensing revenues plunged 48% to $630 million.
Expenses at the TV unit were reduced by 18%.
Paramount management aims to cut costs by $500 million by the end of the year, in part by reducing headcount by 15%.
Filmed entertainment revenue was down 18% to $679 million.
“Our strong performance in Q2 demonstrates that we are delivering on our strategic priorities,“ the three executives running Paramount — George Cheeks, Chris McCarthy and Brian Robbins — said. “We are proud of our results, including significant earnings growth largely driven by our DTC segment. In fact, for the fourth year in a row, Paramount Plus is leading the industry in domestic sign-ups driven by our big broad hit TV series and blockbuster films. DTC profit growth for the past four quarters has totaled nearly $900 million and we are on track to reach domestic profitability for Paramount Plus in 2025.
“Looking ahead, we will continue to aggressively execute on our strategic plan, which focuses on transforming streaming to accelerate profitability, streamlining our organization — including at least $500 million in annualized cost savings — and improving the balance sheet by growing free cash flow and optimizing our asset mix,“ they continued. “We are confident that our plan will drive long-term value by leveraging our broad hit content as we continue to transform Paramount for the future.”
