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“Scale is not about market cap or about how much money you spend on content. It’s about how much money you spend on content that resonate with audiences,” Shari Redstone told Paramount shareholders, promising the company has the scale to compete in a cutthroat media world that’s seen significant M&A over the past year.
Redstone, who serves as the non-executive chair of the company, was first up to address the annual meeting, held virtually, saying, “The momentum we have created over the past year is tremendous and we 100% believe that we have the scale to succeed and to win.” It’s the first shareholder meet since the company changed its name from ViacomCBS to Paramount Global and comes with a bit of glow as Top Gun: Maverick storms the box office — the studio’s fifth no. 1 theatrical opening of 2022.
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CFO Naveen Chopra said the $15 billion the company spent on content can be monetized across platforms — making it more logical than the spending of unnamed rivals without that ability. “All these number one films are currently, or will be, available on Paramount+, which means that they generate additional returns through our streaming service on top of what they already earned in theaters,” he said. Ditto with the CBS broadcast lineup with windows across the Paramount ecosystem.
The woes of Netflix and speed bumps in the growth of subscription streaming services have given newfound swagger to companies like Paramount that can now prominently highlight diversity in broadcast, cable and theatrical — instead of pushing them under the rug as part of a business thesis — as well as AVOD in Pluto TV
On moviegoing, CEO Bob Bakish said Top Gun: Maverick’s record Memorial Day opening “brought consumers back to the theater at scale and proves that if you make great content, they will come and there is still great power in that communal experience.”
It was a question whether older audiences who loved the original but have been the most spooked by Covid would return, or if younger demos would come out for an older property. “The reality is that the older folks showed up and the younger folks showed up,” he said.
Paramount’s Lost City, Sonic The Hedgehog 2, Scream and Jackass Forever also topped the box office.
Recent mergers have been led by Warner Media-Discovery and Amazon-MGM.
On the market cap front Redstone referred to, Paramount has a $19.8 billion market capitalization. In comparison, Warner Bros. Discovery’s is at $41.5 billion. Netflix is at $91 billion (after a massive selloff since its last quarterly earnings). Disney’s is $197 billion and Comcast’s $192 billion. It’s an understatement to say that media shares have not been on fire, which complicates stock deals. Paramount is not a bite-sized acquisition — except for a tech giant — and in any case it’s not clear if Redstone, whose family trust owns the company, would be willing to cede control.
Lionsgate’s market cap is $2.2 billion to the ongoing distress of management, in the process of spinning off Starz to help boost the value of each.
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