Paramount Misses Q4 Estimates Despite Record Streaming Growth, as Skydance Merger Looms
Media giant posts $7.98 billion in revenue but falls short of Wall Street targets, even as Paramount+ adds 5.6 million subscribers and narrows streaming losses by 42%.
Paramount Global reported Q4 2024 revenue of $7.98 billion and adjusted EPS of $0.11, missing analyst expectations of $8.11 billion and $0.20 per share, though the company delivered its strongest streaming subscriber growth in two years while awaiting regulatory approval for its $8 billion Skydance Media merger.
The Media conglomerate posted Earnings of $0.11 per share against a consensus forecast of $0.20, while revenue came in $130 million below the $8.11 billion estimate, according to Investing.com. Shares declined 2.43% to $11.06 in after-hours trading following the February 26 announcement.
The earnings miss came despite transformational progress in Paramount’s streaming business. Paramount+ added 5.6 million subscribers in Q4, reaching 77.5 million total, the strongest quarterly growth in two years, Yahoo Finance reported. The streaming division narrowed losses by 42% to $286 million during the quarter and 70% to $497 million for the year, driven by improved engagement and cost efficiencies.
Streaming Momentum Masks Linear Decline
Direct-to-consumer revenue grew 8% to $2.01 billion, with subscription revenue rising 7% and advertising revenue increasing 9%, according to Nasdaq. Global watch time per user improved 20%, driving a reduction in churn of over 100 basis points year-over-year. Paramount+ revenue surged 16% in Q4 and 33% for the full year 2024.
However, traditional TV operations continued their structural decline. TV Media revenue fell to $4.98 billion, missing the $5.17 billion analyst estimate and representing a 3.7% decline. Affiliate and distribution fees accounted for $7.647 billion of TV revenue for the full year, down 5%, while advertising contributed $8.18 billion, The Desk reported.
Full-year adjusted OIBDA grew 30% to $3.1 billion, with free cash flow reaching $489 million, up significantly from $56 million in the previous year. The company achieved its targeted $500 million in annual cost savings.
Skydance Deal Reshapes Hollywood Power Structure
Paramount’s results arrive as the company awaits FCC approval for its merger with Skydance Media, backed by RedBird Capital Partners. The Skydance Investor Group, comprised of the Ellison family and RedBird Capital, will invest more than $8 billion in New Paramount, valuing the combined entity at an enterprise value of approximately $28 billion, according to Sullivan & Cromwell.
RedBird provided funding for Skydance’s acquisition of National Amusements from the Redstone family, with the merger approved in July 2024 and closing on August 7, 2025, Wikipedia reported. The transaction is anticipated to close in the first half of 2025.
The Skydance-Paramount merger represents the largest private equity play in Hollywood history. RedBird Capital’s $2 billion stake marks a watershed shift from traditional studio moguls to Wall Street-backed operators. David Ellison, son of Oracle co-founder Larry Ellison, will assume control of the 113-year-old studio as CEO of the combined entity.
The deal transforms Hollywood’s competitive landscape by injecting capital into a legacy studio struggling against streaming giants. The merger follows a challenging period for Paramount, which absorbed close to $6 billion in write-downs tied to linear TV assets, and received regulatory approval from the FCC last month, according to Private Equity Insights.
Paramount’s Position in the Streaming Wars
While Paramount narrows streaming losses, Warner Bros. Discovery demonstrated the sector’s persistent profitability challenges. Warner Bros. Discovery posted a quarterly profit of $409 million for its DTC unit in Q4 2024, turning a full-year profit of $677 million compared to $103 million in 2023, The Hollywood Reporter reported. Warner Bros. Discovery ended 2024 with 116.9 million global streaming subscribers, substantially ahead of Paramount’s 77.5 million.
However, Warner Bros. Discovery’s overall financial performance remained under pressure. Warner Bros. Discovery annual revenue for 2024 was $39.321 billion, a 4.84% decline from 2023, according to MacroTrends. Gross profit declined 2.64% to $16.351 billion.
| Metric | Paramount (Q4 2024) | WBD (Q4 2024) |
|---|---|---|
| Streaming Subscribers | 77.5M (+5.6M in Q4) | 116.9M (+6.4M in Q4) |
| DTC Operating Result | -$286M loss (narrowed 42%) | $409M profit |
| Full-Year DTC Result | -$497M loss (narrowed 70%) | $677M profit |
| Annual Revenue | $29.2B (-1%) | $39.3B (-4.84%) |
Warner Bros. Discovery reported a first-quarter 2024 net loss of $966 million on revenues of $9.96 billion, with a 70% year-over-year drop in studio division profits, The Wrap previously reported. The company’s linear television business continues to erode faster than streaming growth compensates.
Paramount’s advertising revenue trends showed divergent patterns across platforms. Direct-to-consumer advertising revenue increased 18% for the full year 2024 to $2.114 billion, while linear TV advertising revenues dipped 4% in Q4 to $2.2 billion but remained flat at $8.2 billion for the year, MediaPost reported.
What to Watch
- Paramount’s Q4 miss underscores the tension between strong streaming growth and accelerating linear decline—a dynamic that will define the Skydance integration strategy.
- The $8 billion merger positions Paramount to compete with deeper pockets, but success depends on whether David Ellison can scale Paramount+ to profitability faster than the linear business deteriorates.
- Warner Bros. Discovery’s earlier achievement of streaming profitability with 116.9 million subscribers suggests Paramount faces a steeper climb with its smaller base.
- Management’s Q1 2025 guidance warns of OIBDA declines due to Super Bowl comparisons, signaling near-term pressure before any Skydance synergies materialize.
The FCC’s approval timeline for the Skydance merger will determine when Paramount can access new capital and execute on cost synergies. Management projects domestic streaming profitability by end-2025, but execution risk remains high as traditional TV affiliate revenues accelerate their decline. Investors should monitor Q1 2025 subscriber retention following the strong Q4 content slate—particularly whether hits like Landman and Tulsa King translate to sustained engagement or prove transitory.
Warner Bros. Discovery’s parallel struggle—posting streaming profits while overall revenue contracts—illustrates the sector’s fundamental challenge: streaming margins cannot yet offset legacy media cash flows. Paramount’s lower subscriber base and ongoing losses suggest the company enters the Skydance era from a position of relative weakness, making the merger less a choice than a necessity for survival in an industry increasingly dominated by scale players like Netflix and Amazon.