Less than an hour after word surfaced that Paramount CEO Bob Bakish was officially out, the company delivered a very short and sweet first quarter earnings call. Lasting less than 10 minutes, it included only prepared remarks, with no opportunity for analyst questions.
Brief statements were delivered by three executives that make up the company’s new office of the CEO — Brian Robbins, president and CEO of Paramount Pictures and Nickelodeon; George Cheeks, president and CEO of CBS and chief content officer, news and sports, Paramount+; and Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks.
Cheeks thanked Bakish for his leadership and “steadfast support for all Paramount Global businesses, brands and people.” He went on to say: “Paramount Global has the greatest content in the world. That is the most important point. We’ve got incredible assets at this company, both in what we produce and the amazing people who make it all possible.” Bakish has agreed to serve as a senior adviser to Paramount until the end of October “to help ensure a seamless transition of his duties,” according to a Paramount SEC Form 10-Q filing.
McCarthy said that the new troika is focused on three pillars: “First, make the most of our hit content. Second, strengthen our balance sheet. And third, optimize our streaming strategy.”
Robbins added: “George, Chris, and I have been collaborating with each other for years, transforming our businesses, and most importantly, making hit films and television, which is the core of Paramount Global. Each of us has deep industry knowledge, relationships, and experience as business leaders and creative executives. We will bring all of that to bear as we chart a course forward for our company. We look forward to coming back to you in short order to share our plan and discussing it all in detail at that time.”
Paramount’s total revenue for the quarter ended March 31 increased 6% over the same quarter in 2023, to almost $7.7 billion. “Total company advertising grew 17% benefiting from Super Bowl LVIII, which contributed 22 percentage points to the growth rates,” said Naveen Chopra, Paramount’s EVP and CFO.
The company’s operating loss was $417 million, a 66% improvement. Adjusted OIBDA (operating income before depreciation and amortization) was $987 million, up 80%.
The still relatively nascent Direct-to-Consumer division, which includes Paramount+, BET+ and PlutoTV, delivered more growth than the company’s other two units (TV Media and Film Entertainment). DTC’s revenue in the quarter ended March 31 increased 24%, to almost $1.9 billion. And its adjusted OIBDA showed a loss of $286 million, a 44% improvement. This marks the fourth consecutive quarter that DTC’s OIBDA has strengthened.
DTC garnered a 22% increase in subscription revenue. Paramount+ now has 71 million subscribers, and 3.7 million net additions in the quarter. The streamer’s global average revenue per unit (ARPU) expanded 26% year over year.
“ARPU growth reflects a full quarter of our domestic price increase and the addition of international subscribers in higher ARPU markets,” said Chopra. “Domestic ARPU was negatively impacted by lower-than-expected engagement due to the lagging effect of last year’s strikes, which constrain the availability of new programs.”
Thanks in part to the Super Bowl, the unit’s ad revenue rose 31%. “Beyond the Super Bowl’s impact on engagement, revenue growth reflects a combination of increased sell through and higher CPMs,” Chopra said.
Needless to say, the Super Bowl also gave a big boost to the TV Media unit, which includes the company’s broadcast and cable network properties. Ad revenue was up 14%, thanks to a 23-percentage-point kick from CBS’s Super Bowl broadcast. That took some of the sting out of the unit’s affiliate and subscription revenue decrease of 3%, due to the cord-cutting trend. The unit’s total revenue was only 1%. Adjusted OIBDA was up 11%, to about $1.45 billion.
The Filmed Entertainment division garnered a 20% increase in theatrical revenues, although advertising was down 80%, to $1 million. Adjusted OIBDA showed a loss of $3 million, a 97% improvement.
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