The merger between Skydance and media company Paramount (PARA) is poised to hit, as Paramount’s go-shop window to find a better deal runs out on August 21. But reports note that a second wave of layoffs is expected to follow the one that emerged in late June.
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With second-quarter earnings poised to land later today, a report from Deadline noted that next week will bring a new round of layoffs. How extensive that wave will be is, as yet, unknown. However, with analysts expecting a loss of 5% in total revenue between this year and last year, those layoffs may be more substantial than anyone expected.
One of the primary culprits for the expected loss in revenue is linear television. Paramount holds several cable networks, including Nickelodeon, MTV, Comedy Central, and broadcast network CBS, among others. With pay-television systems continuing to lose subscribers—the first quarter of 2024, for example, saw 2.37 million subscribers depart pay-TV platforms—it’s clear that there is just not as much money in standard television as there once was.
Selling Properties
And then came the news that Paramount is selling its assets. Paramount sold off its ComicBook and PopCulture websites to Savage Ventures, a digital brand manager from Nashville. Savage already manages an array of brands from outdoors.com to 247health.com, which puts it in a good position to take over.
The deal also appears to have moved quickly, as the current sites’ employees will be offered comparable salary and benefits packages, and Paramount employee access will be shut off on Friday. Further, no changes are expected in leadership, and no layoffs are projected; it is about as clean a transfer of power as anyone could ask for.
Is Paramount a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on three Buys, seven Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. After a 33.99% loss in its share price over the past year, the average PARA price target of $12.07 per share implies 18.74% upside potential.
