US Markets
Tuesday, June 4th, 2024 4:20 pm EDT
Key Points
• Paramount Global presented a backup plan to shareholders in case a potential sale of the company falls through.
• The plan focuses on financial stability by reducing costs ($500 million targeted initially), lowering debt (currently at $14.6 billion), and exploring strategic partnerships with other streaming services.
• Content creation remains a priority, but with a focus on efficiency alongside cost-cutting measures.
Paramount Global’s leadership team, known as the “Office of the CEO,” presented a strategic plan to shareholders in case a potential sale of the company falls through. This plan prioritizes cost-cutting, debt reduction, and content creation.
The presentation comes despite Paramount already agreeing to a merger framework with an investor group. However, the deal hinges on approval from Shari Redstone, Paramount’s controlling shareholder. The presented strategies serve as an alternative if Redstone chooses not to sell.
Key aspects of the plan include:
- Cost Reduction: Paramount aims to eliminate $500 million in costs by focusing on areas like duplicate teams, real estate, and marketing. This is just the initial step, with further details expected in the next earnings call.
- Debt Reduction: The plan aims to get Paramount back to an investment-grade credit rating by lowering its debt burden (currently around $14.6 billion). Optimizing asset sales and using the proceeds for debt repayment are potential strategies.
- Content Growth: Despite cost-cutting measures, Paramount remains committed to growing its content and franchises.
The company is also exploring partnerships with other streaming services. This could involve a joint venture for Paramount+, their flagship streaming service with over 70 million subscribers, but still operating at a loss. Paramount emphasizes this wouldn’t be a simple marketing bundle but a deeper collaboration. Additionally, they are open to more content licensing deals and potentially divesting non-core assets.
Overall, Paramount’s leadership presented a plan focused on financial stability and content creation as a backup option if the potential sale doesn’t materialize. This plan emphasizes cost reduction, debt repayment, and strategic partnerships to strengthen the company’s future.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/06/04/paramount-annual-meeting-job-cuts-streaming-jv.html
