Paramount Will Be “Diligent” Exploring Alternatives, CFO Promises, As Management Focused On Turnaround
Paramount Global chief financial officer Naveen Chopra said management is chipping away at debt, cutting costs, heading towards streaming profitability and otherwise “focused on execution” but won’t ignore other opportunities to create value for shareholders.
“We believe that continued execution of our plan will unlock value. We are very conscious of the fact that our job as management is to create value for all our shareholders. There are multiple ways to potentially accomplish that. But to the extent that there are other alternatives, we will be diligent about exploring them,” he told investors at a Morgan Stanley media conference when asked about M&A speculation swirling around the Bob Bakish-led, Shari Redstone-owned company for months, with no deal announced.
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He declined to comment on the M&A chatter, which has zeroed in on David Ellison’s Skydance Media, Bryon Allen and, earlier, Warner Bros. Discovery.
He did noted that Paramount is still looking “at creative options to divest or otherwise monetize non-core assets” as it has most recently with Simon & Schuster, real estate and Bellator.
Paramount’s quarterly financials last month saw revenue hit by a soft ad market and the company said it anticipates a $1 billion impairment charge in the current first quarter reflecting a shifting content strategy as well as severance costs after a big round of layoffs.
The bulk was content related — “a decision we made about how we are going to think about the Paramount+ service, where it is going to live, what kind of content we are going to focus on, what we ae going to rely on partners to provide,” Chopra said. He does not expect more content writedowns.
However, he didn’t rule addition hits related to “synergies, cost reductions, etc…” and they could come “in multiple forms and in various parts of the business … not just linear but streaming [and] that includes opportunities” in marketing, technology and “people and the organization.”
Chopra said the linear ad business is looking better now and Par should see “mid-teens type growth” in the current first quarter, buoyed in part by the Super Bowl. Scatter is stronger and “I think sentiment is more positive than it was the last couple of quarters.”
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