Paramount writes off 1.5 billion in streaming debt

[Juan]

Paramount's $1.5 Billion Write-Down Is the Bill for Peak TV Coming Due

The gutting of Showtime's slate as it folds into Paramount+ is a Wall Street-pleasing purge -- and a sign of the times.

www.thewrap.com

Changes coming

 

[Bruce]

Paramount's $1.5 Billion Write-Down Is the Bill for Peak TV Coming Due

The gutting of Showtime's slate as it folds into Paramount+ is a Wall Street-pleasing purge -- and a sign of the times.

www.thewrap.com

Changes coming

It is a tax write off because of combining Paramount+ and Showtime, they still predict profitability by 2024.

Considering they gained 16 Million Subscribers in 2022, expect this year to be even more, they will hit the target.

Lots of cost savings when they start sharing programming between the two services.

 

[ncted]

TBH: I expect to see a lot of this now that WBD has shown the way. The number of expensive prestige shows these companies have been putting out has always unsustainable in the long run. Not everything on TV has to have tentpole movie production values to tell good stories. This also holds true for movies themselves. Not everything needs to have a blockbuster budget.

 

[SamCdbs]

Yep. I was talking to a guy just yesterday. He said "next year, I'm gonna get me some of that there streaming".

Laughable.

 

[meStevo]

Yep. I was talking to a guy just yesterday. He said "next year, I'm gonna get me some of that there streaming".

Laughable.

Sounds like you don't actually understand what this move means.

 

[Juan]

Sounds like you don't actually understand what this move means.

It means they are getting rid of the showtime app

 

[meStevo]

It means they are getting rid of the showtime app

You said this is writing down debt though. Where in the article does it say that?

 

[Juan]

You said this is writing down debt though. Where in the article does it say that?

3rd paragraph down

 

[ncted]

3rd paragraph down

Not to quibble, but I don't see debt mentioned in the 3rd paragraph

Combining Paramount’s two big subscription offerings, which means Showtime won’t need its own apps or marketing plan, will yield Paramount some $700 million in annual savings — a large part of the anticipated savings for the year, executives said Thursday in a call to discuss its fourth-quarter earnings and financial outlook for 2023. Crucially, the new Paramount+ With Showtime will require fewer fresh series and movies to lure new subscribers and retain existing ones. Those that get the green light will likely fall into already familiar franchises.

In fact a quick search of the page cannot find the word debt anywhere. To be sure, a write-down in this context refers to decreasing the value of an asset, not debt. Although, Juan didn't actually say they were writing-down debt. The third paragraph just talks about savings from a combined product and less investment in new series in favor of already successful ones.

You really only write-down debt if you don't think you'll ever get paid back the full value of the debt you are holding, which is not what is being described here.

 

[Juan]

Not to quibble, but I don't see debt mentioned in the 3rd paragraph

In fact a quick search of the page cannot find the word debt anywhere. To be sure, a write-down in this context refers to decreasing the value of an asset, not debt. Although, Juan didn't actually say they were writing-down debt. The third paragraph just talks about savings from a combined product and less investment in new series in favor of already successful ones.

You really only write-down debt if you don't think you'll ever get paid back the full value of the debt you are holding, which is not what is being described here.

Exactly
Cutting costs by eleminating showtime app to reduce debt

 

[meStevo]

Juan didn't actually say they were writing-down debt.

 

[ncted]

View attachment 160825

Ah, I missed the thread title. In any case, they aren't writing off any debt, or at least this article doesn't claim they are.

 

[ncted]

Exactly
Cutting costs by eleminating showtime app to reduce debt

Well, maybe they will use the savings to help pay down debt, but the article fails to say one way or the other. So you are guessing unless you have some insider information you'd like to share. They do have a substantial amount to pay back though.

 

[meStevo]

A little bit, yeah. A Look Into Paramount Global's Debt - Paramount Global (NASDAQ:PARA)

Kinda provides some context though, writing down the value of up to $1.5b of over $57b in assets, realizing savings of $700m annually w/ the merging of the streaming operations, etc. Hardly a sinking ship or anything.

Well, maybe they will use the savings to help pay down debt, but the article fails to say one way or the other. So you are guessing unless you have some insider information you'd like to share. They do have a substantial amount to pay back though.

It's just made up, it's what he does. A couple people only post in this sub-forum to find negatives, and invent them when they come up empty.

 

[SamCdbs]

All the internet stock market and tax accountant wannabe-ism aside, the facts are pretty simple.

- This little venture lost $1.5B. Actually more, this is just what they are using to avoid taxes on their hyper-profitable linear TV and movie businesses.
- They are "combining" (which is to say, shutting down and moving its content) Showtime, due to some combination of Showtime not having enough subscribers to be profitable, so shut it down; and Paramount Plus not having enough subscribers to be profitable, so see if the old Showtime customer base will move over.
- They admit, less content is coming. Of course it is. No one thing is ever going to have enough fans to justify its existence in the million option world. More reruns, more garbage. And most importantly, a higher bill.

 

[Juan]

Well, maybe they will use the savings to help pay down debt, but the article fails to say one way or the other. So you are guessing unless you have some insider information you'd like to share. They do have a substantial amount to pay back though.

Read the headline

 

[ncted]

Read the headline

I did. Writing down an asset has no effect on how much debt they are carrying. It has tax implications with respect to depreciation, but debt is still owed either way.

 

[ncted]

All the internet stock market and tax accountant wannabe-ism aside, the facts are pretty simple.

- This little venture lost $1.5B. Actually more, this is just what they are using to avoid taxes on their hyper-profitable linear TV and movie businesses.
- They are "combining" (which is to say, shutting down and moving its content) Showtime, due to some combination of Showtime not having enough subscribers to be profitable, so shut it down; and Paramount Plus not having enough subscribers to be profitable, so see if the old Showtime customer base will move over.
- They admit, less content is coming. Of course it is. No one thing is ever going to have enough fans to justify its existence in the million option world. More reruns, more garbage. And most importantly, a higher bill.

That pretty much sums it up. Well, the middle part may or may not be correct. FWIW: I don't want to be a tax accountant. I am married to one, so I know I don't.

 

[meStevo]

I'd disagree w/ the last point, you produce less content because you only need the content for 1 service, not 2. And since I don't subscribe to Showtime now, it's a nominal increase to have access to their library and content as part of Paramount+ which already has content we're happy to pay for.

My household will come out way ahead in this deal, I'll pay significantly less (the cost increase of ~$24 annually for P+ instead of $132 via YTTV adding Showtime) for the content I want because of these apps merging. They're also working on spinoffs of the shows I do watch on Showtime (Billions, mostly), good stuff.

In the grand scheme of things, it's just more false consternation over things that don't affect the detractors, this is largely just investor-level reporting about asset valuation as a product of service consolidation (and never about debt)

 

[Juan]

I did. Writing down an asset has no effect on how much debt they are carrying. It has tax implications with respect to depreciation, but debt is still owed either way.

Huh..they are losing money on streaming and are laying off people...they are cutting costs by reducing expences