Paramount will soon begin selling off pieces of the studio and cutting $500 million in overhead, which means staffing cuts.
Paramount’s three co-CEOs — Brian Robbins, who runs the movie studio, Chris McCarthy, who handles Showtime and MTV, and George Cheeks, who oversees CBS — brought some 500 employees to the lot Tuesday for what’s known as a Come to Jesus Meeting.
The good news: revenues have increased 13 percent over the last five years.
The bad news: operating income collapsed 61 percent.
The good news: the Paramount+ streaming service boosted subscribers from 67.5 million to 71 million during this last quarter.
The bad news: During that same quarter, Paramount+ lost $286 million.
“We’re looking at selling certain Paramount-owned assets,” Cheeks told the group. “In fact, we’ve already hired bankers to assist us in this process — and we’ll use the proceeds to help pay down debt and strengthen our balance sheet.”
The far-left Hollywood Reporter believes those assets could include…
…BET Networks or other linear TV assets like the non-CBS local TV stations (the company also owns brands like MTV, Nickelodeon and Comedy Central), as well as potential assets like VidCon or even the free streaming service Pluto TV. Paramount has been executing a plan to “slim down to scale up” in streaming for several years now.
And then the bomb dropped.
The co-CEOs explained that they want to start “modernizing the organization ‘so we can move faster — and be more nimble’ via $500 million in annualized cost savings by eliminating duplicative functions and being more efficient with resources.”
And that means brutal job cuts.
Some employees asked if there was a timeline for when the cuts would be announced. The answer was no. That news would be forthcoming.
Paramount is obviously in serious trouble, which is why Paramount Global is basically up for sale and almost sold a few weeks ago. Eventually, an Apple or Amazon or Google will swallow it whole. They are probably just waiting for the studio to crater further and the stock price, which is already down 26 percent this year, to drop further.
There are 330 million people in America. If you are in the business of entertainment and can’t make a profit with that kind of customer pool, it can only mean one thing: your product sucks.
My guess is that one major loss of revenue for Paramount is in the cable/satellite TV area. As I’ve mentioned a million times, that rigged system benefited the studios to the tune of billions of unearned dollars per year. Just because it was part of your cable package, the studios make a ton of money whether or not you watch an MTV or BET. Now that tens of millions of smart people are canceling cable and moving to streaming, all that free money is drying up and these studios don’t know what to do.
You see, with cable, they made billions from tens of millions of cable subscribers who never watched their garbage. With streaming, in order to attract subscribers, the studios actually have to produce content people want to watch. Most of these studios have become so arrogant and insulated they no longer know how to do that—which is why Paramount+ lost $286 million last quarter.
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