The third film in the series, Sonic the Hedgehog 3, recently surpassed $100M at the international box office, and has earned over $187M domestically for a cumulative worldwide gross to-date of over $312MHOLLYWOOD, Calif., Jan. 5, 2025  /PRNewswire/ -- Paramount Pictures today announced that its Sonic the Hedgehog film franchise, based on the SEGA video game, has surpassed $1B in total box office receipts worldwide, as Sonic the Hedgehog 3 continues to draw audiences to theatres across the globe. PARAMOUN ...

Paramount Global’s (PARA) shares have declined 31.1% over the past year, underperforming the Zacks Consumer Discretionary sector’s 12.9% return and the Zacks Media Conglomerates industry’s 20.7% growth.The underperformance resulted from a 6% year-over-year revenue dip to $6.73 billion in the third quarter, also lagging the Zacks Consensus Estimate of $6.91 billion. This shortfall was primarily led by weakness in the TV Media and Filmed Entertainment segments.However, Paramount’s prospects are bolstered by t ...

Core Viewpoint - The merger between Paramount and Skydance is anticipated to be influenced by the relationship between Paramount's Shari Redstone and President-elect Donald Trump, which may help navigate potential FCC issues and facilitate a successful deal closure by the first half of 2025 [4][10]. Company and Industry Summary - Shari Redstone, controlling Paramount through National Amusements, is set to receive $1.75 billion from the merger, while Skydance will assume National Amusements' financial obligations and cover Redstone's private jet lease and New York apartment expenses [2][4]. - Skydance has committed $4.5 billion to assist Paramount in buying out approximately 50% of its nonvoting shares, aiming to appease nonvoting investors [2]. - The merger combines Paramount's renowned studio and networks with Skydance's successful productions, including "Top Gun: Maverick" and "Jack Ryan," with plans for over $2 billion in cost cuts [6]. - Management changes are underway, with David Ellison and Jeff Shell leading the integration, and former Netflix executive Cindy Holland likely to oversee streaming operations [6][9]. - Despite the lawsuit from Trump against CBS regarding a "60 Minutes" interview, Redstone has expressed understanding of Trump's frustrations but does not support the lawsuit [7][8].

Core Points - Paramount Global announced the redemption of all remaining outstanding 4.750% senior notes due May 15, 2025, on December 27, 2024 [1][2] - The redemption price will include 100% of the principal amount, a make-whole amount, and accrued unpaid interest [2] - The total principal amount of the 4.750% senior notes outstanding is $125,561,000, which will all be redeemed [2] Company Overview - Paramount Global is a leading global media, streaming, and entertainment company, known for creating premium content and experiences [3] - The company's portfolio includes well-known brands such as CBS, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount+, and Pluto TV [3] - Paramount Global possesses one of the industry's most extensive libraries of TV and film titles and offers innovative streaming services and digital video products [3]

Shari Redstone's Financial Situation - Shari Redstone paid off a $186 million debt owed by National Amusements, the holding company controlling 77.5% of Paramount's voting stock, using cash mostly fronted by Larry Ellison [1][2] - The debt carried an 11.5% interest rate and was not due until May 2025, but Redstone paid it off early [5] - Redstone was reportedly in a cash crunch as Paramount struggled with weak performance across its business units [6] - National Amusements had previously sold real estate assets to make a $40 million debt payment in February [6] Skydance-Paramount Merger Deal - Skydance and its partners agreed to pay $2.4 billion for National Amusements' stake in Paramount as part of an $8 billion deal that will lead to a merger [4] - The deal values Skydance at 1,600 times its EBITDA of $3 million for the 12 months ending June 30, 2024 [11][12] - Skydance will pay $15 per share for up to $4.3 billion of Paramount's common shares, about half of Paramount's market cap [14] - The merged company is projected to have EBITDA of $258 million in 2025, driven by the release of new films [15] Financial Projections and Concerns - Paramount's revenue is expected to grow from $974 million in 2024 to $2.3 billion in 2025 [19] - Some Paramount shareholders and analysts expressed concerns about the deal, with one analyst calling it "a bad deal" [16][17] - Paramount's second-largest shareholder urged the FCC to review Skydance's finances, which could delay the deal's closing [17] Industry Context - The Skydance-Paramount deal contrasts with Amazon's acquisition of MGM, which was valued at 27.5 times EBITDA [16] - Skydance is known for co-producing major film franchises like "Mission: Impossible" and "Top Gun" [2][13]

Financial Data and Key Metrics Changes - Adjusted OIBDA for Q3 2024 was $858 million, reflecting a 20% year-over-year increase, driven by improvements in the D2C business [40] - Total company advertising grew by 2%, with D2C advertising showing strong growth of 18%, an acceleration from 16% in Q2 [41][42] - Affiliate and subscription revenue declined by 1% in Q3, but grew by 1% when excluding the impact of Showtime pay-per-view events [45][46] Business Line Data and Key Metrics Changes - D2C achieved profitability for the second consecutive quarter, with adjusted OIBDA improving by over $1 billion over the past four quarters [8] - Paramount+ added 3.5 million subscribers in Q3, reaching a total of 72 million subscribers, with a year-over-year revenue growth of 27% [47][40] - Pluto delivered its highest consumption ever, with 5.6 billion viewing hours, up 5% year-to-date [18] Market Data and Key Metrics Changes - The NFL on CBS averaged over 20 million viewers in the first five weeks of the season, a 5% increase from the previous year [28] - CBS News 24x7 streaming network saw total minutes watched grow by 56% over 2023 [30] - International advertising revenue benefited from the recognition of previously underreported revenue, contributing approximately $50 million in Q3 [68] Company Strategy and Development Direction - The company is focused on transforming D2C and streamlining operations to achieve $500 million in annual run rate savings [9][19] - The Skydance transaction is expected to close in the first half of 2025, subject to regulatory approvals [10] - The company aims to reach domestic profitability for Paramount+ by 2025, with a focus on content streaming and advertising as key growth levers [49][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position as a standalone entity, driven by hit content and strategic execution [60] - The company anticipates continued top-line growth in Q4, despite expected higher content expenses [86] - Management remains optimistic about the trajectory of the business, particularly in D2C profitability and overall financial goals for 2024 [55][54] Other Important Information - The company is evaluating potential partnerships in streaming to create long-term value for shareholders [18] - The ongoing dispute with Nielsen is being addressed, with management hopeful for a resolution [16] - The company has executed 90% of its planned workforce reductions, aiming to right-size its cost base [19] Q&A Session Summary Question: Discussion on D2C partnerships and profitability timeline - Management highlighted the importance of strategic partnerships and expressed confidence in achieving domestic profitability in 2025, with Pluto already profitable [62][60] Question: Clarity on international market strategy for Paramount+ - Management indicated a market-by-market approach to maximize content value, with various strategies including owned operations and licensing [66] Question: Impact of Nielsen data on advertising sales - Management stated there has been no adverse impact on ad revenue to date and does not expect material impact in Q4 [72] Question: Details on DTC trends and Charter partnership impact - Management noted that the Charter partnership contributed to subscriber growth, with expectations for continued growth over time [82] Question: DTC efficiencies and marketing costs - Management explained that marketing efficiencies are driven by a diverse subscriber base and that programming charges taken earlier in the year have potential benefits for cost amortization [92][93]

Revenue Performance - Paramount's Q3 2024 revenue decreased by 6% to $6.73 billion, driven by lower theatrical releases and licensing revenues, partially offset by growth in streaming services led by Paramount+[154][155] - For the nine months ended September 30, 2024, revenue decreased by 4% to $21.23 billion, with streaming growth partially offsetting declines in licensing and theatrical revenues[159][160] - Total revenues for the three months ended September 30, 2024 decreased by 6% to $6,731 million, compared to $7,133 million in the same period in 2023[176] - Total revenues for Q3 2024 decreased by 6% to $6.731 billion, with TV Media revenues down 6% to $4.298 billion and Direct-to-Consumer revenues up 10% to $1.860 billion[220] - Total revenues for the nine months ended September 30, 2024 decreased by 4% to $21.229 billion, with TV Media revenues down 7% to $13.800 billion[223] Operating Income and Adjusted OIBDA - Q3 2024 operating income declined by 46% to $337 million, impacted by restructuring charges, transaction-related costs, and an impairment charge[154][156] - Adjusted OIBDA for Q3 2024 increased by 20% to $858 million, reflecting improved streaming service performance[154][157] - The nine-month operating loss widened to $5.40 billion in 2024, compared to $855 million in 2023, due to significant programming and impairment charges[159][161] - Adjusted OIBDA for the nine months increased by 45% to $2.71 billion, driven by streaming service improvements[159][161] - Operating income (GAAP) for the three months ended September 30, 2024 was $337 million, compared to $621 million in the same period in 2023[167] - Adjusted OIBDA (Non-GAAP) for the three months ended September 30, 2024 was $858 million, up from $716 million in the same period in 2023[167] - Adjusted OIBDA for Q3 2024 increased by 20% to $858 million, driven by a $287 million improvement in Direct-to-Consumer Adjusted OIBDA[222] - Nine-month Adjusted OIBDA increased by 45% to $2.712 billion, driven by an $842 million improvement, with Direct-to-Consumer Adjusted OIBDA improving by $962 million[223] - Adjusted OIBDA improved by $287 million to $49 million for the three months ended September 30, 2024, reflecting revenue growth and lower marketing and content costs[245] - Adjusted OIBDA improved by $962 million for the nine months ended September 30, 2024, reflecting revenue growth and lower marketing and content costs[251] Net Loss and Earnings - Paramount reported a net loss of $4 million in Q3 2024, compared to net earnings of $247 million in Q3 2023[154][158] - Reported net loss from continuing operations (GAAP) for the nine months ended September 30, 2024 was $(5,980) million, compared to $(1,288) million in the same period in 2023[172] - Adjusted earnings from continuing operations (Non-GAAP) for the nine months ended September 30, 2024 was $1,112 million, compared to $359 million in the same period in 2023[172] - The company reported a net loss from continuing operations attributable to Paramount of $4 million for the three months ended September 30, 2024, compared to net earnings of $247 million in the same period in 2023[214] Streaming Services Performance - Adjusted OIBDA for Q3 2024 increased by 20% to $858 million, reflecting improved streaming service performance[154][157] - Direct-to-Consumer revenues grew 10% to $1.860 billion, with subscription revenues up 7% to $1.343 billion and advertising revenues up 18% to $507 million[239] - Paramount+ global subscribers increased by 8.5 million (13%) to 71.9 million as of September 30, 2024, compared to 63.4 million in 2023[240] - Paramount+ revenues grew by $290 million (25%) to $1.428 billion for the three months ended September 30, 2024[240] - Advertising revenues increased by 18% for the three months ended September 30, 2024, driven by growth in impressions for Paramount+ and Pluto TV[242] - Subscription revenues increased by 7% for the three months ended September 30, 2024, driven by Paramount+ subscriber growth and domestic pricing increases[243] - Global Paramount+ subscribers increased by 3.5 million (5%) to 71.9 million during the quarter, reflecting international expansion[244] - Paramount+ revenues increased by $1.239 billion (40%) to $4.332 billion for the nine months ended September 30, 2024[247] - Advertising revenues increased by 21% for the nine months ended September 30, 2024, driven by growth in impressions from Pluto TV and Paramount+[249] - Subscription revenues increased by 13% for the nine months ended September 30, 2024, driven by Paramount+ subscriber growth and pricing increases[250] Advertising Revenues - Advertising revenues increased by 2% to $2,174 million in the three months ended September 30, 2024, compared to $2,133 million in the same period in 2023[176] - Advertising revenues increased by 5% to $7.521 billion for the nine months ended September 30, 2024, driven by growth from Paramount+ and Pluto TV, higher political advertising revenue, and adjustments from prior period underreporting[178] - TV Media advertising revenues for Q3 2024 decreased by 2% to $1.666 billion, with domestic advertising down 7% to $1.33 billion and international advertising up 24% to $339 million[227] Theatrical and Licensing Revenues - Theatrical revenues decreased by 71% to $108 million in the three months ended September 30, 2024, compared to $377 million in the same period in 2023[176] - Theatrical revenues decreased by 46% to $399 million for the nine months ended September 30, 2024, due to fewer and less successful releases compared to the previous year[183] - Licensing and other revenues decreased by 9% to $1,234 million in the three months ended September 30, 2024, compared to $1,361 million in the same period in 2023[176] - Licensing and other revenues decreased by 22% to $3.462 billion for the nine months ended September 30, 2024, impacted by lower secondary market licensing and reduced content production due to labor strikes[185] - Licensing and other revenues for Q3 2024 decreased by 12% to $760 million, reflecting lower licensing volume in the secondary market[229] Affiliate and Subscription Revenues - Affiliate and subscription revenues decreased by 1% to $3,215 million in the three months ended September 30, 2024, compared to $3,262 million in the same period in 2023[176] - Affiliate and subscription revenues increased by 2% to $9.847 billion for the nine months ended September 30, 2024, with Paramount+ subscribers growing to 71.9 million from 63.4 million in the same period last year[182] - Affiliate and subscription revenues for Q3 2024 decreased by 7% to $1.872 billion, primarily due to linear subscriber declines and the absence of pay-per-view boxing events[228] Content Costs and Operating Expenses - Total operating expenses decreased by 7% to $4.342 billion for the three months ended September 30, 2024, primarily due to lower content costs and distribution expenses[186] - Content costs decreased by 9% to $10.539 billion for the nine months ended September 30, 2024, reflecting lower theatrical and licensing costs, partially offset by Super Bowl LVIII broadcast costs[189] - Selling, general, and administrative expenses decreased by 9% to $4.772 billion for the nine months ended September 30, 2024, driven by lower marketing and compensation costs[196] Impairment and Restructuring Charges - The company recorded a goodwill impairment charge of $5.98 billion for the Cable Networks reporting unit in the second quarter of 2024[198] - Restructuring and transaction-related costs totaled $595 million for the nine months ended September 30, 2024, including severance and exit costs[200] - The company recorded programming charges of $1.12 billion in the first quarter of 2024, primarily for content impairment and development cost write-offs[192] - The company recorded severance charges of $513 million for the nine months ended September 30, 2024, with $288 million recorded in the third quarter, primarily due to strategic workforce changes and the exit of the former CEO[201] Investments and Transactions - Paramount entered into a $6.0 billion investment agreement with Skydance Media, with up to $4.5 billion allocated for cash-stock elections and $1.5 billion remaining at New Paramount[147] - The Skydance transaction includes the issuance of up to 400 million shares of New Paramount Class B Common Stock at $15.00 per share and warrants for 200 million shares at $30.50 per share[147] - The Skydance transaction is expected to close in the first half of 2025, subject to regulatory approvals and customary closing conditions[149] - The company recorded a loss of $4 million from the sale of an investment in the first quarter of 2024, compared to a gain of $168 million in the second quarter of 2023 from the dilution of its interest in Viacom18 from 49% to 13%[206] - The company recorded additional pretax gains of $19 million from the sale of Simon & Schuster during the nine months ended September 30, 2024, with $7 million recorded in the third quarter[215] Debt and Financial Position - The company's total notes and debentures outstanding as of September 30, 2024, were $14.62 billion with a weighted average interest rate of 5.17%, compared to $15.66 billion at 5.11% in 2023[205] - The company's interest expense decreased by 10% to $209 million for the three months ended September 30, 2024, compared to $232 million in the same period in 2023[204] - Total debt at September 30, 2024, was $14.62 billion, slightly up from $14.60 billion at December 31, 2023, with senior debt at $12.99 billion and junior debt at $1.63 billion[280] - The company has a $3.50 billion revolving credit facility maturing in January 2027, with no borrowings outstanding as of September 30, 2024[285] - The maximum Consolidated Total Leverage Ratio was 5.75x for the quarter ended September 30, 2024, and is set to decrease to 4.5x by March 31, 2026[286] - Outstanding letters of credit and surety bonds totaled $675 million at September 30, 2024, with $464 million issued under a $1.9 billion standby letter of credit facility[290] Tax and Equity - The reported effective income tax rate for the nine months ended September 30, 2024 was 5.6%, compared to 30.4% in the same period in 2023[172] - The company recorded a tax benefit of $342 million for the nine months ended September 30, 2024, reflecting an effective income tax rate of 5.6%, primarily due to tax benefits on pretax impairment charges and programming charges[208] - The company's equity in earnings (loss) of investee companies improved by 22% to a loss of $60 million for the three months ended September 30, 2024, compared to a loss of $77 million in the same period in 2023[210] Cash Flow and Dividends - Operating cash flow from continuing operations increased due to lower spending on content, compensation, and marketing, with payments of $198 million in 2024 and $288 million in 2023 for restructuring and transformation initiatives[272] - Net cash flow used for investing activities from continuing operations was $365 million in 2024, compared to $341 million in 2023, with capital expenditures of $151 million in 2024 and $213 million in 2023[274] - Net cash flow used for financing activities was $298 million in 2024, a significant decrease from $744 million in 2023, driven by lower debt repayments and common stock dividends[275] - Total common stock dividends declared were $104 million in 2024, down from $228 million in 2023, with dividends per common share at $0.15 in 2024 compared to $0.34 in 2023[278] Goodwill and Intangible Assets - The company performed an interim goodwill impairment test in Q2 2024, assessing fair value using discounted cash flow, traded values, and transaction values of comparable businesses[296] - Cable Networks reporting unit recorded a goodwill impairment charge of $5.98 billion due to downward adjustments in expected cash flows, primarily driven by linear affiliate market indicators and company market value estimates[298] - CBS Entertainment reporting unit's fair value exceeded its carrying value by 4%, with a goodwill balance of $5.16 billion as of June 30, 2024[300] - Paramount+ reporting unit's fair value exceeded its carrying value by 5%, with a goodwill balance of $1.47 billion as of June 30, 2024[301] - Pluto TV reporting unit's fair value exceeded its carrying value by 4%, with a goodwill balance of $1.26 billion as of June 30, 2024[303] - FCC licenses impairment tests resulted in a $15 million charge for two markets in Q2 2024 and a $104 million charge for five markets in Q3 2024, reducing the carrying value to $1.03 billion[307][309] - A 50 basis points decrease in the long-term growth rate or a 50 basis points increase in the discount rate could reduce the aggregate fair value of FCC licenses by $67 million and $86 million, respectively[310] Legal and Environmental Liabilities - As of September 30, 2024, the company had approximately 19,360 pending asbestos claims, down from 19,970 as of December 31, 2023[320] - Total costs for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $54 million in 2023 and $57 million in 2022[320] - The company recorded an accrual for asbestos liabilities based on a 10-year estimable period, considering factors like claim volume, average cost per claim, and disease type breakdown[321] - The company faces potential future liabilities from environmental cleanup costs and personal injury claims related to historical operations, with accruals subject to change based on future circumstances[322] Market Risks and Forward-Looking Statements - No significant changes to market risk since the Annual Report on Form 10-K for the year ended December 31, 2023[327] - Forward-looking statements include risks related to streaming business, advertising revenues, competitive industries, and evolving technologies[325] - Potential risks include asset impairment charges for goodwill, intangible assets, FCC licenses, and content[325] - Risks related to environmental, social, and governance (ESG) matters are highlighted[325] - Cybersecurity, privacy, and data protection risks are evolving concerns[325] - Risks associated with labor disputes and inability to retain key employees or creative talent[325] - Potential conflicts of interest due to ownership structure with a controlling stockholder[325] - Risks related to the Transactions include delays, litigation, and challenges in realizing synergies[325] - Negative effects on stock price due to the announcement or consummation of the Transactions[325] - Forward-looking statements are made as of the report date and are subject to change[325]

In this article PARA Courtesy: Shopsense When viewers tune in to the 2024 MTV VMAs on Wednesday night, they'll be able to shop the outfits and designer looks they're seeing in real time, as legacy media companies look for new ways to monetize content. As part of a new partnership between Paramount Global — the parent company of cable TV network MTV — and shoppable advertising company Shopsense AI, viewers will be able to shop the outfits they're seeing on screen using the startup's new AI-powered lens, whic ...

Edgar Bronfman Jr. has upped his bid for Paramount Global, attempting to pry the Shari Redstone-controlled company away from David Ellison's Skydance. They signed a merger agreement in July but it was contingent on no other better, or at least somewhat intriguing, offer for Par landing before midnight tonight. Bronfman's initial offer lobbed on Monday night was worth $4.3 billion. He's now revised that to $6 billion. There's the same $2.4 billion for Shari Redstone's holding company National Amusements, whi ...

Investors interested in stocks from the Media Conglomerates sector have probably already heard of Paramount Global-B (PARA) and Reservoir Media, Inc. (RSVR) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look. There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a ...