Paramount Falls Apart

By Douglas A. McIntyre Published Jun 26, 7:30AM EDT

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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 | PARA Price Prediction), 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.
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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.
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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.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.