Paramount plans to soon sell off part of its studios, cut $500 million in expenses, and begin cutting jobs.
Paramount’s three co-CEOs — Brian Robbins, who runs the film studio, Chris McCarthy, who is in charge of Showtime and MTV, and George Cheeks, who oversees CBS — gathered about 500 employees on the campus on Tuesday for what they called a “Come to Jesus Meeting.”
The good news is that revenue has grown 13 percent over the past five years.
The bad news is that operating profit fell 61 percent.
The good news is that the number of subscribers for its Paramount+ streaming service increased from 67.5 million to 71 million during the quarter.
The bad news is that Paramount+ lost $286 million in the same quarter.
“We are considering selling some of our Paramount-owned assets,” Cheeks told the group. “In fact, we have already hired bankers to assist us in this process. We intend to use the proceeds from the sale to help pay down our debt and strengthen our balance sheet.”
Far Left The Hollywood Reporter I believe These assets include…
…other linear TV properties like BET Networks and non-CBS local stations (the company also owns brands like MTV, Nickelodeon and Comedy Central), plus potential assets like VidCon and free streaming service Pluto TV. Paramount has been executing a “lean and scale” plan with streaming for several years.
And then the bomb was dropped.
The co-CEOs said they wanted to save $500 million a year in costs by eliminating duplicate functions and using resources more efficiently, and to “modernize the organization to move faster and be more agile.”
And that means brutal cuts.
Some employees asked if there was a timeline for when the cuts would be announced. The answer was no. The news was expected to be announced soon.
Paramount is clearly in serious trouble, which is why Paramount Global is essentially up for sale and was nearly sold a few weeks ago. Ultimately, Apple, Amazon or Google will swallow Paramount whole. They’re probably just waiting for the studio to get even worse and for the stock price, already down 26 percent this year, to fall even further.
There are 330 million people in the U.S. If you’re in the entertainment industry and you can’t make money on that kind of customer base, it can only mean one thing: your product sucks.
My guess is that the big drain on revenue for Paramount is the cable/satellite TV space. As I’ve said many times before, that rigged system has cost the studios billions of dollars a year in unfair profits. Whether you watch MTV or BET or not, the studios make a ton of money just because it’s part of your cable package. Now, with tens of millions of smart people cutting cable and moving to streaming, all that free money is drying up and these studios don’t know what to do.
You see, cable made billions of dollars from tens of millions of cable subscribers who never watched their garbage shows. With streaming, to attract subscribers, studios have to actually produce content that people want to watch. Most of these studios are arrogant and isolated and don’t know how to do that anymore. That’s why Paramount+ lost $286 million last quarter.
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