Paramount quarterly profit falls amid bruising merger battle
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Paramount Skydance must wait until March to defend its proposed $111-billion acquisition of Warner Bros. Discovery — a blockbuster deal that would reshape Hollywood by uniting two storied studios.
On Tuesday, U.S. District Judge Araceli Martínez-Olguín scheduled a March 2 trial to decide the merits of an antitrust challenge brought by 12 state attorneys general, led by California Atty. Gen. Rob Bonta. The states are teaming up to try to derail Paramount’s merger, and have snared preliminary victories — prompting a concession from Paramount to put the merger on hold until after the trial.
Paramount had asked for a Nov. 4 trial date.
Tech scion David Ellison wants to add HBO, CNN, HGTV, Food Network and the Warner Bros. studio to his smaller stable of Paramount properties. The trial will span 12 days and conclude March 19, the judge wrote in her order.
“We will continue to vigorously defend the transaction and remain committed to closing as soon as possible so its benefits for the creative community and consumers can be realized,” Paramount said in a statement.
The Writers Guild of America has separately sued to block the merger.
California Atty. Gen. Rob Bonta and 11 other state attorneys general expressed concern that the industry-reshaping deal could spell doom for movie theaters.
Friday marks the anniversary of Ellison’s purchase of Paramount.
“Looking back on the past twelve months, I’m incredibly proud of how our team has turned those priorities into measurable progress, reflecting their talent, hard work, and dedication,” Ellison wrote in a Tuesday letter to shareholders as the company released its second-quarter earnings.
Results were mixed.
Revenue inched up 1% to $6.91 billion compared to the year-ago period, when Paramount was controlled by media heiress Shari Redstone.
The company’s studios and streaming divisions turned in stronger performances but costs, including $153 million in merger-related expenses, weighed on the corporate entity.
Profit declined 28% to $41 million, or 4 cents a share, compared to $57 million in the year-earlier period.
The concessions come as Paramount Skydance already was facing the prospect of a lengthy moratorium. The latest delay could extend to next summer.
Paramount said it now has 81.6 million streaming customers, an increase of 2 million from the first quarter.
Streaming operations produced $2.5 billion in revenue, a 9% boost from the same quarter a year ago. Paramount+, which boasts the Taylor Sheridan-produced “Landman” and “Dutton Ranch,” also televised President Trump’s birthday extravaganza, the UFC Freedom 250 fights in June, from the White House lawn.
Coverage of the FIFA World Cup in some Latin American countries assisted the streaming results. (Fox and Telemundo broadcast the highly rated soccer matches in the U.S.)
State attorneys general, led by California AG Rob Bonta, plan to ask for a trial in 2027 -- after the midterm elections.
Studios revenue increased 16% to $1.3 billion, boosted by Paramount’s television studios and its licensing deals as well as the ability to consolidate revenue from Skydance properties. During the quarter, the Melrose Avenue film studio released “Scary Movie,” which brought in $231 million in global ticket sales, surpassing expectations.
Television media, which includes the CBS network, TV stations and the company’s struggling cable channels, declined 9% to $3.1 billion. Advertising revenue fell 14% and the company felt the loss of South American television operations Telefe and Chilevision, which it divested after the Ellison takeover.
The veteran correspondent is leaving after a dispute with his bosses at CBS’ ‘60 Minutes.’
The company revenue during the current quarter should come in around $7 billion. It also released its full-year guidance, saying it expects $30 billion in revenue, up 4% over 2025.
Paramount released the earnings after markets closed Tuesday. During regular trading, shares gained nearly 2% to close at $8.38.
