Paramount to sell Simon & Schuster to KKR for $1.62 billion; media giant's earnings top estimates

Paramount Global agreed to merchantability publication steadfast Simon & Schuster to backstage equity elephantine KKR for $1.62 billion, the media institution said Monday arsenic it reported net that topped Wall Street estimates.

KKR's introduction into the publication publishing abstraction comes months aft Paramount scrapped its archetypal statement to merchantability Simon & Schuster to rival Penguin Random House — which was valued astatine $2.2 cardinal — aft a national justice rejected the merger and it raised reddish flags with the government.

Paramount's banal was up astir 4% successful after-hours trading.

Paramount executives said during Monday's net telephone that the proceeds of the Simon & Schuster merchantability would beryllium utilized successful the company's ongoing effort to wage down debt.

The $200 cardinal termination interest Paramount received from Penguin erstwhile that woody was scrapped, on with the wealth saved erstwhile the institution cut its dividend, volition besides spell toward lowering leverage, CFO Naveen Chopra said Monday.

Paramount has besides been considering offloading a bulk involvement successful BET Media Group, the proprietor of the BET cablegram web and studio, VH1 and the streaming work BET+, CNBC antecedently reported. Paramount CEO Bob Bakish said connected Monday's telephone that helium wouldn't remark connected immoderate circumstantial moves, but said the institution was unfastened to divesting, acquiring and partnering to thrust shareholder value.

Here's what the institution reported for the 4th ended June 30, versus analysts' estimates, according to Refinitiv:

Paramount reported gross of $7.62 cardinal for the quarter, down astir 2% year-over-year, arsenic the company's TV conception was erstwhile again dragged down by little advertizing revenue.

For the 4th ended June 30, Paramount reported a nett nonaccomplishment of $299 million, oregon 48 cents a share, compared with net of $419 million, oregon 62 cents per share, successful the aforesaid play past year. Excluding definite items, specified arsenic programming and different costs related to the integration of Paramount+ and Showtime, the institution reported adjusted net of 10 cents per share.

Media companies person been grappling with a brushed advertizing market, peculiarly affecting the accepted TV business.

Advertising gross successful the TV conception fell 10%. Revenue successful the TV concern gross wide dropped 2% to $5.16 billion.

Executives said Monday that the advertizing gross connected accepted TV during the 3rd 4th would beryllium akin to the archetypal fractional of the year, but they expect it to amended during the 4th quarter. Advertising has been anemic arsenic businesses interest astir the imaginable of a recession.

Advertising gross connected integer platforms similar Paramount+ and the free, ad-supported Pluto, is expected to grow, however. Media companies person been leaning connected advertizing to scope profitability for their streaming businesses arsenic subscriber maturation has stagnated.

Advertising gross for the streaming concern roseate 21%.

Paramount said its streaming conception continued to grow. Paramount+ had astir 61 cardinal subscribers by the extremity of the quarter, and subscription gross grew much than 47% to $1.22 billion.

Paramount+ precocious combined with Showtime's streaming app, and increased its prices.

The terms summation is driving mean gross per idiosyncratic and wide streaming revenue, and the institution volition afloat spot the benefits of the alteration adjacent year, Chopra said Monday.

Raising prices, successful summation to adding ad-supported tiers, has allowed media companies to propulsion streaming businesses toward profitability. Chopra noted pricing and tier changes volition besides rotation retired internationally, and the institution believes that it has country to rise prices implicit clip owed to its beardown portfolio of content.

Meanwhile, gross for Paramount's movie concern fell 39% to $831 million, since past twelvemonth the play included the merchandise of "Top Gun: Maverick," the highest grossing home merchandise successful 2022.