The inevitable M&A question came toward the end of an hour-long conference call Wednesday between Paramount Global and Wall Street analysts. This session would undoubtedly have been more controversial had Paramount’s leaders not begun by making a sacrifice for a free cause. cash flow and profit.
Paramount Global CEO Bob Bakish spoke to Bank of America Merrill Lynch media analyst Jessica about the wave of media speculation about suitors coming (and leaving) for the company.・He dismissed the inquiry from Mr. Lief Ehrlich in a refreshing tone. Shareholder value. However, previous comments and business updates from Bakish and chief financial officer Naveen Chopra indicate that they intend to take streamer Paramount+ to the promised land of profitability and consider turning the company into an independent entity. It was clear that they were planning a policy for this year and next year to continue as an organization.
Indeed, Bakish was nodding to the constant chatter on the streets and in the media about Paramount’s long-term fate. “Regardless of current market sentiment, we believe that current asset values, combined with the execution of our strategy going forward, provide significant value creation opportunities, and we believe that We are dedicated to unleashing the ,” Bakish said.
The unlocking process includes a $1 billion writedown taking place this quarter. Mr. Bakish and Mr. Chopra told Wall Streeters that the company would spend less on producing and marketing its movies and TV shows and make more money by windowing streaming content more aggressively across its linear assets. I promised you that you would get the same amount of money and vice versa. Moves made out of necessity during last year’s strike-month programming drought, including reruns of “Yellowstone” on CBS, are helping guide that future. Most of the writedown ($700 million to $900 million) will come from existing television shows and movies being pulled from Paramount’s various digital and linear platforms, as well as development projects being scrapped.
Bakish also stressed that efforts to produce local language content in overseas markets will be significantly reduced. Instead, the company will focus on producing promising talent within the country that will have a global impact.
“Internationally, it has become clear beyond a shadow of a doubt that Hollywood blockbusters are the biggest draw for audiences and partners around the world,” Bakish said. “That means there is a clear opportunity to focus on CBS programming, Paramount+ originals, and Paramount movies while spending less on local content and related marketing.” In pursuit of what it calls, Paramount will aim to produce more TV shows and movies overseas, where everything from hiring extras to getting an espresso at Starbucks is cheaper than in Los Angeles or New York.
“We look forward to further offshore production of our global franchises, including the upcoming London release of Billions, the new Ray Donovan origin story, and new series like George Clooney’s The Department. You can see it’s leaning,” Bakish said. He spoke about the three series on deck for Paramount+ with Showtime.
Bakish said Paramount Pictures has had success so far this year with the low-budget feature film “Mean Girls” and the biopic “Bob Marley: One Love,” which has led the U.S. box office the past two weekends. I pointed out what I was doing. “We’re improving ROI by lowering the average cost per title,” Bakish said, adding that movie studios have a refined focus on “balancing big-budget tent poles with more modestly cost titles.” He pointed out that he was guessing.
Paramount Global spent about $16.5 billion on content in 2023, but that number was less than the 2022 content bill due to the Writers Guild of America and SAG-AFTRA strikes, Chopra said. He expects spending to increase in 2024, but not by much. “We believe that we only actually spend about 50% of our so-called strike savings, which is a critical component to our ability to drive healthy free cash flow growth,” Chopra said. said.
(Photo: “Bob Marley: One Love”)
Further in the future
