And Now Paramount Has Lowered the Value of Its Cable Channels by $6 Billion

This summer’s hottest trend? Revising the value of your cable channels (down, way down).

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On Wednesday, Warner Bros. Discovery realized its cable networks were worth $9 billion less than it originally thought. On Thursday, Paramount Global reduced the book value of its own cable channels by nearly $6 billion. WBD’s internal audit was triggered by its loss of NBA rights ; Paramount recorded the “goodwill impairment charge” based on what Skydance is paying for the company and its networks. These changes do not impact cash flow.

With the giant accounting maneuver, Paramount Global posted adjusted earnings of 54 cents per share, well above the 12 cents per share anticipated by Wall Street. Without it, the company’s Q2 operating-income loss was a whopping $5.32 billion. Paramount whiffed on media analysts’ consensus expectation of $7.21 billion in revenue, reporting $6.813 billion.

Back on the plus side, Paramount Global turned its first operating profit — $26 million — ever from streaming. Paramount+ still lost money in the quarter, which means Pluto TV and/or BET+ more than carried that burden. Paramount+ also lost subscribers in the second quarter, 2.8 million of them, after an (as-expected) exit from a popular hard bundle in South Korea.

Paramount+ now has 68.4 million subscribers. Management still forecasts the streaming platform will first turn a profit in the U.S. in 2025. Paramount+ prices are going up in a couple of weeks, so that’ll (probably) help some.

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From January through March of this year, Paramount+ had added 3.7 million subscribers, but streaming lost $286 million overall. So you take the bad with the good.

One particularly feel-good content highlight in the June quarter included Jeremy Renner’s return to acting via Paramount+ original series “Mayor of Kingstown” following a near-fatal snow-plow accident. Paramount+ also attracted some viewers with “Your Honor” and “Dexter,” though most of the recent ratings success from those old Showtime series came by way of Netflix . Some of the usual CBS shows performed well on streaming.

Paramount distributed John Krasinski’s kids movie “IF” in the middle of the quarter and “A Quiet Place: Part One” in June’s final weekend. “IF” did alright, but in no way could it compete with last year’s Q2 hit “Transformers: Rise of the Beasts.” The “A Quiet Place” prequel, which will recognize most of its ticket sales in Q3 2024, has been a success.

Last quarter, longtime President & CEO Bob Bakish was fired from Paramount. Its new three-headed “Office of the CEO” has been searching for a partner for Paramount+ while vowing to reduce company costs by $500 million annually. Cue the layoffs; more on that shortly.