On Thursday it was Paramount’s turn: The entertainment group, which is about to be taken over by David Ellison and a consortium of investors, just increased its television business by six billion dollars.
For context: Public investors value Paramount’s total equity at $7 billion.
Paramount’s press release barely mentions the write-off – it’s only mentioned in a footnote in tiny print.
But you don’t really need a comment from Paramount to understand what’s happening here. Like WBD, the cable networks that once supported Paramount – MTV, Comedy Central, etc. – are in decline, although they continue to make big money.
Paramount’s television networks (including CBS, which was not affected by the price cut) saw revenues fall 17 percent last quarter. Ads fell 11 percent, affiliate and subscriber fees fell 5 percent, and licensing fees fell in half. But that business still generated over $1 billion in operating profit.
Meanwhile, Paramount, like WBD, says the company is making upward progress in its digital business.
The big difference between WBD and Paramount is that Paramount has already agreed to sell – most likely to Ellison, unless a (real) bidder shows up in the next few weeks. So owners of Paramount stock will not care about this outcome – in the near future, it will be Ellison’s problem.
