Paramount Global reported mixed Q4 earnings on Wednesday (February 26) and said it expected the Skydance merger to close in the first half of the year.
Total revenue for the fourth quarter climbed 5% year-on-year to reach $7.98bn, below the $8.14bn consensus of analysts’ expectations.
The company expects Paramount+ to reach profitability in the US by the end of 2025. Streaming numbers were encouraging as the platform added 5.6m subscribers in the quarter for 77.5m, driven by acquisition titles, originals, and NFL and college American Football games. Revenue increased by 16%,
Revenue at the overall direct-to-consumer division, including the AVoD platform Pluto TV, grew 8% to $2bn, subscription revenue increased by 7% to $1.44bn, advertising revenue grew by 9%, and watch time per user increased by 22%. Adjusted OIBDA – the operating profit before depreciation and amortisation of assets –swung from a $490m loss in the year-ago quarter to a $286m loss.
While TV division revenues fell 4% year-on-year to $4.97bn amid ongoing linear TV decline, the filmed entertainment division saw revenues climb 67% to $1.08bn.
There were five theatrical releases in Q4 compared to one in the year-ago period including Sonic The Hedgehog 3, Smile 2, and Gladiator II. Paramount Pictures earned nearly $900m at the worldwide box office in the period and co-CEO Brian Robbins said the latest Sonic instalment, which has earned close to $490m worldwide, pushed the franchise’s lifetime grosses to $1.2bn.
Robbins name-checked the eighth Mission: Impossible tentpole, sci-fi The Running Man with Glen Powell, the animated Smurfs film featuring Rihanna, a new SpongeBob SquarePants film, and a musical from South Park creators Trey Parker and Matt Stone featuring Kendrick Lamar among theatrical highlights for the remainder of the year.
The three co-CEOs George Cheeks, Chris McCarthy and Robbins did not elaborate on the impending Skydance deal.
While Wall Street expects the deal to close, there has been concern that the return of Donald Trump to the White House could delay that process as Federal Communications Commission chair Brendan Carr scrutinises the transaction.
Carr has also reopened an investigation into Paramount Global’s CBS network concerning an interview it ran with then presidential hopeful Kamala Harris prior to the November election. Trump sued over edits of the interview he deemed to be damaging to his electoral prospects, and the parties have now appointed a mediator to explore a settlement.
Amid the president’s ongoing assault on US media, the sense is controlling shareholder Shari Redstone will want to settle that case in order to push the $8bn Skydance deal over the finish line.
Shares in Paramount Global had dipped 2.3% by after hours.
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