Paramount Global Q4 Earnings Rise on Streaming, Warner Bros. Discovery Bid Intensifies

Paramount Skydance Focuses on Streaming Growth Amid Warner Bros. Discovery Pursuit

Paramount Skydance is prioritizing growth in its streaming business, even as it continues to pursue a potential acquisition of Warner Bros. Discovery. Recent fourth-quarter earnings revealed gains at the company’s Paramount+ platform helped offset declines in traditional TV revenue.

The media and entertainment company reported $8.15 billion in revenue for the quarter ending December 31, a 2% increase compared to the same period last year. This growth was largely driven by a 10% rise in streaming revenue, reaching $2.21 billion, and a 16% increase in filmed entertainment revenue, totaling nearly $1.26 billion.

However, the company’s traditional TV media business experienced a downturn. Revenue in this segment slipped 5% to $4.7 billion, attributed to a 10% decrease in advertising revenue. This decline was partially due to the absence of political advertising and the loss of revenue from the Big Ten football championship compared to 2024.

Paramount reported an operating loss of $339 million, which included $546 million in restructuring and transaction-related costs stemming from its merger with Skydance last August. Diluted losses per share totaled 52 cents, compared to a loss of 31 cents in the prior-year quarter.

Despite the losses, Paramount CEO David Ellison expressed confidence in the company’s progress. “It’s been six months, but we really do feel good about the work the team has done to date,” he said during an earnings call with analysts on Wednesday. He indicated that investments in the film studio, original series, the Ultimate Fighting Championship, and upgrades to the Paramount+ platform would continue to build momentum.

The company anticipates total revenue of $30 billion for the current year, representing a 4% increase. Streaming revenue is expected to be the primary driver of this growth, with contributions also anticipated from the studio segment.

Executives declined to address questions regarding the ongoing bid for Warner Bros. Discovery during the earnings call. However, in a letter to shareholders, Paramount stated it remained “confident” in its standalone strategy and growth trajectory, while also suggesting that acquiring Warner Bros. Discovery would “accelerate” those goals and be “economically compelling” for shareholders.

On Monday, Paramount submitted a revised bid of $31 per share in cash for Warner Bros. Discovery, up from a previous offer of $30 per share. The company also increased its commitment to cover potential regulatory hurdles, agreeing to pay Warner Bros. Discovery $7 billion if the deal fails to gain regulatory approval – a $2 billion increase from the previous commitment.

Paramount also reaffirmed its willingness to cover the $2.8 billion termination fee Warner Bros. Discovery would owe Netflix if it were to abandon its existing agreement with the streamer. The company agreed to begin paying a “ticking fee” of $0.25 per quarter to shareholders starting September 30, until a Paramount-Warner transaction is completed. Paramount also committed to providing additional equity funding to Warner Bros. Discovery if needed to ensure its financial solvency.

The pursuit of Warner Bros. Discovery has raised concerns among some analysts. John Conca of Third Bridge wrote in an email that the potential acquisition is “questionable,” particularly given the declines Paramount is experiencing in its traditional TV business. He suggested that acquiring Warner Bros. Discovery would “effectively double their exposure to dying linear networks while also creating even more massive integration headaches.”

Paramount+ subscriber numbers reached 78.9 million, a 4% increase year-over-year. The company clarified that this figure excludes subscribers who previously signed up for free trials, a change made to provide a more accurate representation of paying customers.