Paramount Global, the entertainment giant behind blockbuster films like "Titanic" and owner of popular networks such as Nickelodeon and MTV, has reported a staggering $5.4 billion loss for the second quarter of 2024.
A Significant Downturn
According to El Economista this significant downturn is a dramatic shift from the $299 million loss reported during the same period in 2023, largely attributed to a major write-down of its cable TV assets ahead of its anticipated merger with SkyDance Media.
The company announced it had to write down the value of these assets by $5.98 billion due to impairments in goodwill. Additionally, Paramount Global faced a $15 million negative adjustment related to the valuation of licenses from the Federal Communications Commission (FCC).
In response to the financial strain, Paramount Global is undertaking a major cost-cutting initiative. Chris McCarthy, the company’s co-CFO, revealed that the company plans to reduce its U.S. workforce by approximately 15%, equating to around 2,000 job cuts.
The layoffs will target roles deemed redundant in marketing, communications, and other support functions, as part of a broader $2 billion efficiency program identified by SkyDance.
Decline in Revenue
The financial report for the second quarter shows a 10.5% decline in revenue, totaling $6.81 billion, with a particularly sharp 17.2% drop in TV segment revenue to $4.27 billion. Conversely, the Direct-to-Consumer (DTC) streaming segment saw a 13% increase in revenue to $1.88 billion.
The film production division also saw a decline of 18.3% in revenue.
For the first half of 2024, Paramount Global’s losses have quadrupled to $5.97 billion compared to $1.42 billion in the same period last year. Despite these setbacks, the company remains optimistic, citing nearly $900 million in DTC gains over the last year and forecasting national profitability for Paramount+ by 2025.
In July, Paramount Global announced its acquisition by SkyDance Media in a deal valued at around $8 billion, a significant move that could reshape the company's future.
