Top Line? A flat quarter, in spite of Top Gun Maverick.

It took 40 minutes into Tech Check on CNBC to even mention Paramount Global this morning… and then only briefly, really focusing on Warner Bros Discovery. 40 minutes on Halftime Report (where the one bear was openly mocked) as well... which tells you a lot.

But let’s start with style. Why does Paramount’s quarterly reporting always always look like a presentation deck by an overly eager intern?

They aren’t hiding anything. But it’s always so upbeat and cheerful.

Now to the numbers…

As you can see, revenues are up in all 3 areas on the company. In TV, the bump is minimal. In Streaming, it’s a nice 56% bump.

In Theatrical+Licensing, it’s a massive 126% leap over last year… though in a weird way, it is not that impressive, given that Top Gun Maverick alone added $500 million in rentals ($1b gross) or so in revenues to the quarter.

left, 2022 reporting - far right, Q2 2021 as reported then

As you can see, since last year, the Q2 reporting for the segment has been adjusted down by more than 10%, with “Licensing and other” off 13%. The sense of growth from last year to this in this section is much more impressive after that adjustment.

And the big suck in this section is “Expenses,” which more than doubled from Q2 2021. What did they “spend” $1.18 billion on in these 3 months? This question has not been answered anywhere. I suspect they moved losses/expenses from other quarters into this quarter, covered by the 2 successful movies. But it’s a big number.

One expects an overly heavy spend in Streaming/DTC, as they build the business.

Nice increase in subscription revenue… in no small part because of people like me, who signed up for $50 last year (in this quarter) and got charged double that this year. Still, they added almost 5 million subs on the quarter. Good for them.

Ad revenue is a little flat. Plenty of excuses being made at every company around town.

And no matter how many people want to bury legacy media… it’s all over… the blood is flowing… run for the hills…

TV (CBS & Cable) is still 60% of the total revenue for Paramount Global and 143% of the net revenue for the company.

It won’t be forever. But it is still.

That said, there is a gross underestimation on Wall Street and in the media of how the experience of Legacy TV is desirable for audiences… even when they are moved to streaming delivery and re-categorized as DTC.

I like Pluto. But it will see competition in the immediate years to come. Paramount+ is still treading water with some moments of swimming like an Olympian… then back to treading water. They have a couple big IP movies a year coming in each of the next 2 years, though they will have to improve on past results to have a real impact. And if Legacy TV for this company drops 10% a year, it will be a decade before it is anywhere close to “death,” and even then, they will likely have moved everything to streaming, driving the revenues there even though they are reclassified.

All said, Paramount Global, even with the singularity of Top Gun Maverick, is a boring floater of a company… which is not the worst place to be these days.

Until later…

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THB #198: Paramount Q2