Paramount Skydance reported a mixed performance for the second quarter, with the Warner deal scheduled for trial in March.
Paramount Skydance reported mixed results for the second quarter on Tuesday, with increased streaming and studio revenue balancing out declines in television, as the company aims to finalize its planned $110 billion acquisition of Warner Bros. Discovery.
The entertainment giant’s revenue increased by 1% to $6.91 billion, surpassing estimates of $6.88 billion, as per data gathered by LSEG.
Paramount CEO David Ellison expressed confidence in finalizing the merger with Warner Bros., despite a federal judge scheduling a March trial for an antitrust lawsuit filed by several states aiming to prevent the agreement. During an earnings call, Ellison stated that the company is “absolutely open to finding a solution out of court, but we also really believe that we’ll win at trial.
In the second quarter, Paramount’s streaming business achieved nearly $2.5 billion in revenue, reflecting a 9% increase compared to the same quarter last year. The company announced that the sequel to “Yellowstone,” titled “Dutton Ranch,” along with sporting events such as the UFC Freedom 250 cage match and the FIFA World Cup, contributed to its flagship Paramount+ service gaining 2 million new subscribers, raising the total to 81.6 million.
Chief Operating Officer Andy Gordon informed Reuters that the company has consolidated its streaming services onto a unified technology platform, enabling more effective content promotion.
In the second quarter, Paramount’s studio business generated revenue of $1.3 billion, driven by robust sales to third parties such as Netflix and Amazon Prime Video, along with improved content licensing. This was somewhat counterbalanced by a less impressive summer theatrical lineup, with “Jackass: Best and Last” standing out, in contrast to last year’s “Mission: Impossible — The Final Reckoning.
Gordon stated that Paramount has made progress in consumer products licensing by securing a multiyear agreement with Mattel for its Teenage Mutant Ninja Turtles entertainment brand.
Sales for the television unit, which encompasses broadcaster CBS and cable networks like Comedy Central, experienced a 9% decline, totaling $3.1 billion.
The company anticipates that revenue for the current quarter ending in September will fall between $6.95 billion and $7.15 billion, driven by anticipated increases in streaming and studios. Additionally, profit before certain items is projected to be between $875 million and $975 million.
LEGAL ACTION
The company stated that the lawsuit initiated by California and 11 other states, which aims to prevent its proposed $110 billion acquisition of Warner Bros., “does not reflect the realities of today’s highly competitive entertainment marketplace,” in its earnings statement.
On Tuesday, a federal judge in California announced that the lawsuit will proceed to trial in March of next year.
Ellison published an essay in the New York Times on Tuesday, arguing that the concern over the pending merger stemmed less from market concentration than from “whether I can be trusted as a steward of Warner’s CNN. Ellison assured that it would stay independent, a declaration that reinforced his desire to include the news network in the agreement.
Paramount has decided to postpone the transaction until at least June 2027, as it awaits a decision in the antitrust case.
The company may be liable for up to $1.7 billion in ticking fees to Warner Bros. shareholders if the deal is postponed until that time. The fee amounts to $7 million per day if the merger fails to close by September 30.
