CNBC recently published an article about legacy media and the great trouble they are in. None is crippled as badly managed as Paramount Global (NASDAQ: PARA), which is unlikely to recover from its current problems. (These companies have the worst reputations.)
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Paramount’s stock is down 42% in the past year, while the market is 12% higher. The recent stock market rally has not helped it much.

While Warner Bros. Discovery and Disney have viable streaming services, which at least can challenge industry leaders Netflix and Amazon Prime, Paramount does not. It has only 60 million subscribers for its Paramount+ service. Disney+ has 158 million, and Netflix has 232 million. The streaming business suffers greatly from churn. People regularly cancel one service and move to another. The average U.S. household has four services. Paramount is near the bottom of the pyramid.

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In the most recent quarter, Paramount’s revenue was flat at $7.3 billion. Its operating loss was $1.2 billion. Granted, director-to-consumer, which includes streaming, posted an increase in revenue of 39% to $1.5 billion. On an adjusted operating income before depreciation and amortization (OIBDA) basis, it lost $511 million. In the most recent quarter, Netflix had revenue of $8.2 billion and a net income of $1.3 billion, so it posted better numbers than all of Paramount and clobbered its streaming operations.

Even Paramount’s studio operations are in trouble. Revenue dropped 6% in the most recent quarter to $588 million. Adjusted OIBDA showed a loss of $99 million. According to Box Office Mojo, Paramount does not have a movie in the top 10 based in revenue in 2023.

Paramount may simply be too small to compete in either the old media or new media business. That news could hardly be worse for shareholders.

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