Imagine facing the same stubborn challenges despite a fresh leadership team stepping in—now that’s a headline that hits hard for Paramount Skydance’s latest financial update.
But here’s where it gets really intriguing: the company, which oversees major names like CBS, Paramount+, and Comedy Central, just reported a loss in its third quarter, squeezed by ongoing revenue struggles that have been dogging it for years. Two key revenue streams—traditional TV advertising sales and fees from distributing TV content—kept on shrinking. To break it down for beginners, pro forma revenue (a way to compare earnings as if the business was structured differently) dipped by 3% to roughly $6.1 billion. Specifically, TV ads plunged by 12%, and those distribution fees slid by 7%. It’s like trying to keep a boat afloat while the water keeps leaking out faster than you can bail.
This marks the first financial quarter under the new ownership by the Ellison family and their chosen team, and expectations were already tempered. By the end of October, around 1,000 jobs had been cut, with more layoffs likely as the company deals with viewers ditching old-school linear TV for on-demand options like streaming services. Think of it this way: in a world where binge-watching on apps has become the norm, fewer people are tuning in at scheduled times, making traditional TV less profitable. Paramount has upped its game on cost savings, boosting the post-merger target from $2 billion to at least $3 billion. And this is the part most people miss: about two-thirds of these savings come from non-labor areas, like trimming expenses in operations or overhead, rather than just workforce reductions.
At the same time, Paramount is flexing its muscles in the industry, signaling a bold push to strengthen its streaming side to take on giants like Netflix, Google, and Amazon. For instance, they’ve locked in a massive deal—$7.7 billion over seven years—to broadcast UFC fights year-round, bringing in exciting live sports content that could draw crowds. They’ve also scooped up The Free Press, a site known for conservative viewpoints, for $150 million and appointed its founder, Bari Weiss, as the lead editorial boss at CBS News. Plus, they’re making moves to potentially buy Warner Bros. Discovery, another legacy media player feeling the heat. And here’s a controversial twist: by acquiring a conservative-leaning outlet and placing its founder in a key news role, is Paramount trying to balance the scales in a polarized media landscape, or risking accusations of bias? Wall Street analysts are cheering this newfound boldness, but they’re quick to point out the hurdles ahead.
As one expert, Robert Fishman from MoffettNathanson, noted back in July, Paramount still battles the steady decline of its linear TV assets and the cash flow they generate. The big question is whether that erosion slows down enough to let their direct-to-consumer (DTC) streaming strategy grow. In simpler terms, can they rebuild online before the old TV model crumbles completely?
In a shareholder letter released Monday, Paramount laid out ambitious plans: aiming for $30 billion in total revenue by 2026, with streaming profits expected to rise in the coming year. They’re committing to hefty programming investments exceeding $1.5 billion in 2026 alone, pouring money into creating new shows and movies to fuel both TV and streaming platforms.
Of course, change comes with a price. Paramount anticipates transformation costs in the hundreds of millions for the fourth quarter, plus a $500 million restructuring charge as they overhaul operations. Their strategy focuses on cranking out more content across TV and streaming, enhancing digital tools for a smoother user experience, and doing a deep dive into their assets through a ‘comprehensive strategic review’ to stay laser-focused.
As part of that review, they’ve already sold off Televisión Federal in Argentina and are in the midst of offloading Chilevision in Chile, with the deal set to wrap up in the first quarter of 2026. These moves will mean trimming about 1,600 more jobs, highlighting the tough choices in a shifting media world.
More developments are on the horizon…
What do you think? Is Paramount’s aggressive streaming pivot the smart way to stay relevant, or is it just delaying the inevitable decline of traditional TV? Do acquisitions like The Free Press signal a bold diversity of voices, or could they stir up more division in news coverage? Share your thoughts in the comments—do you agree with this strategy, or see a different path forward?