Paramount Sees Skydance Merger Closing In First Half As Streaming & ‘Sonic' Bright Spots In Mixed Q4

Core Insights - Paramount Global expects the merger with Skydance to close in early 2024 despite mixed quarterly results, with earnings impacted by stock-based compensation and softer revenue than Wall Street forecasts [1] Financial Performance - Paramount reported a net loss of $224 million for Q4, a significant decline from a profit of $514 million the previous year, with revenue increasing by 5% to $7.98 billion [2] - Direct-to-Consumer (DTC) segment performed well, with Paramount+ adding 5.6 million new subscribers in Q4, marking its best growth quarter in two years, totaling 77.5 million subscribers by year-end [2] - Streaming losses narrowed to $286 million from $490 million, with expectations for domestic profitability by year-end [2] Content and Engagement - Paramount+ achieved significant success with three of the top 10 SVOD originals, including titles from Taylor Sheridan [3] - Pluto TV experienced a record year, with a 16% increase in hours watched year-over-year for Q4 and an 8% increase for the full year [3] Filmed Entertainment - Filmed Entertainment revenue surged by 67% to $1.08 billion, driven by theatrical releases such as Gladiator II and Sonic the Hedgehog 3, the latter nearing $500 million at the global box office [4] - Gladiator II has grossed over $460 million globally, while the Sonic franchise has reached $1.2 billion across its three installments [4][5] Advertising and Media Revenue - TV Media advertising revenue decreased by 4%, attributed to declines in the linear advertising market and fewer sporting events on CBS, though partially offset by higher political advertising [5] - TV Media affiliate and subscription revenue fell by 7% due to subscriber declines, despite price increases, indicating challenges in transitioning to streaming [6] Strategic Direction - Company leadership emphasized a transformative year, marking a significant shift towards becoming a streaming-first company [6] - Paramount+ achieved record engagement levels, ranking as the 2 domestic SVOD service for hours watched across all Original Series [7]