DIS Shareholders and Stock Info ONLY

[wabbott]

https://www.courant.com/2023/05/01/espns-jimmy-pitaro-will-decide-the-fate-of-cable-television/

ESPN’s Jimmy Pitaro will decide the fate of cable television
5/1/23
by Gerry Smith

(Bloomberg) — Ever since Bob Iger returned to lead the Walt Disney Co. in November, he’s spoken almost every day with one of his key deputies, ESPN Chairman Jimmy Pitaro. Iger is an avid sports fan with a deep knowledge of history. “He has forgotten more about sports than I’ll ever know,” Pitaro said.

But these days, the two executives don’t focus much on the past. Many of their conversations, Pitaro said in a recent interview, concern ESPN’s future — specifically, its streaming service, ESPN+, and deciding the right moment to someday offer the full channel to the growing legions of cable cord-cutters.

“We’re going to get to a point where we take our entire network, our flagship programming, and make it available direct to consumer,” Pitaro said. “That’s a ‘when,’ not an ‘if’….We’re only going to do it when it makes sense for our business and for our bottom line.”

For now, ESPN operates two largely distinct businesses. It shows the biggest sports matchups almost exclusively on traditional TV channels — and for good reason. Last year, TV viewers generated $28 billion in revenue for Disney, the most of any big media company. At the same time, it’s airing more live sports on ESPN+, a $10-a-month streaming service that launched five years ago.

The network’s streaming ambitions keep growing. As part of ongoing negotiations with the NBA over a new contract that will take effect in 2025, ESPN executives want to acquire the rights to put pro basketball games on ESPN+. “I’m confident we’re going to see eye-to-eye on how to prioritize streaming,” Pitaro said of talks with the league.

With ESPN’s streaming subscribers growing and its cable subscribers shrinking, the two businesses are starting to converge. Trying to forecast exactly when ESPN’s TV slate will go online has become one of the great guessing games of the media industry. Inside ESPN, executives have long wrestled with the math, studying data and graphs, and calculating how many subscribers they’d need to attract and at what price for a streaming version of ESPN to replace the money they now get from pay-TV distributors.

At a recent investor conference, Iger called the move “inevitable,” but didn’t offer a timeline. The eventual repercussions would be widespread. Many industry executives see ESPN as vital to maintaining the already dwindling number of cable TV subscribers and fear that when Disney starts selling the network’s whole lineup online, the change could further accelerate cord cutting and the demise of other channels.

“It’s not a small decision,” Wells Fargo analyst Steven Cahall said. “Disney is constantly weighing the risk of not doing it versus the risk of doing it too early.”

The pressure on ESPN to shake up its business model is mounting. The network currently has 74 million subscribers, down 25 million from about a decade ago. During the last fiscal year, ESPN+ lost about $400 million, according to an estimate by Cahall.

In the coming year, Disney will begin reporting separate financials for ESPN for the first time, casting a brighter spotlight on the sports media giant under the intent gaze of investors. Many Disney watchers see the move as a prelude to a potential spinoff of the business, though Iger has said that’s not immediately in his plans. Meanwhile, the company will continue tinkering with how to best divvy up its programming between traditional TV and streaming.

“We’re proud of the fact that we’ve been able to create this must-have product that is still very much complementary to what we have on linear television,” Pitaro said.

When ESPN+ launched on April 12, 2018, it did so with a modest programming lineup, offering portions of a PGA Tour tournament, a hockey-focused studio show called In the Crease and a series featuring NBA analysis from Kobe Bryant. An early breakthrough came in January 2019 with the airing of an Ultimate Fighting Championship (UFC) event that pulled in 568,000 new subscribers.

Since then, the amount of sports on ESPN+ has grown dramatically. Last year, it aired 27,000 live events, including soccer, football, hockey, baseball, college sports, golf and tennis. It also airs UFC pay-per-view events, the full library of 30 for 30 documentaries and alternate telecasts, such as a recent animated NHL game in the style of a popular Disney cartoon series.

At the same time, ESPN is wrestling to control costs, a dynamic playing out across much of the media landscape. In late April, ESPN laid off dozens of employees, mostly those who worked behind the scenes, and the network plans to make cuts to its roster of on-air talent by the middle of this year. The layoffs — which included Russell Wolff who served as general manager of ESPN+ for over four years — are part of Iger’s overall push to reduce spending at Disney by $5.5 billion. ESPN also plans to be more selective about acquiring sports rights.

“In this environment where we’re identifying savings and efficiencies and very much focused on our bottom line, of course there are deals that are going to get a heightened amount of scrutiny,” Pitaro said.

Viewership on ESPN+ has been growing. Total ESPN+ viewing last year was up 53% from the year before. Viewing of women’s sports has more than doubled. Through March, the PGA Tour audience is up 75%. College football viewership last season rose 40%. ESPN+ has also benefited from cross-promotions with other Disney properties. ESPN+ has aired episodes of Welcome to Wrexham, a show on Hulu about a Welsh soccer club narrated by the team’s celebrity owners, Ryan Reynolds and Rob McElhenney.

“When ESPN+ launched, the focus out of the gate was on niche content,” Pitaro said. “Fast forward to today, it’s well beyond that.”

In five years, ESPN+ has signed up about 25 million subscribers. So far, however, the business of streaming sports has proven to be far less lucrative than the traditional model it is rapidly replacing. Within the legacy cable and satellite TV bundle, ESPN is able to charge pay-TV providers more than $9 a month per subscriber. ESPN+ costs $10 a month. But that retail figure can be misleading. In reality, ESPN+ generates an average monthly revenue per subscriber of $5.53, according to Disney’s most recent earnings report, in part, because many subscribers get a discount by bundling the service with Disney+ and Hulu.

About 61% of ESPN+ subscribers get it through the Disney bundle, while 39% subscribe to ESPN+ on a standalone basis, according to estimates from Antenna, which measures sign-ups online and on streaming platforms. In theory, the packaging of ESPN+ with the other services makes it less likely that a consumer will cancel all three. Last year, when ESPN+ raised its price 43%, the bundle price remained the same — making it a comparatively attractive option. The strategy of having three separate apps “gives fans and viewers flexibility and choice, with the bundle being the best value,” said Wolff, who will remain in his role until July.

For now, as Disney executives weigh the pros and cons of selling ESPN outside the cable bundle, ESPN+ has become a training ground for developing streaming technology and business expertise for when that day finally arrives. Already, the staff behind ESPN+ is deeply integrated with the rest of the company. Disney employees in Connecticut, New York, California, North Carolina and Texas all work on ESPN+.

“There’s not a corner office somewhere with a bunch of folks who are just working on ESPN+,” said John Lasker, ESPN’s vice president of digital media programming and acquisitions. “ESPN+ is part of everybody’s job.”

 

[wabbott]

https://variety.com/2023/tv/news/writers-strike-final-day-contract-talks-1235599704/

May 1, 2023 12:23pm PDT
Tensions Rise in Hollywood as Potential Writers’ Strike Hangs Over Productions on Final Day of Contract Talks
By Jennifer Maas
With half a day to go until the clock strikes midnight on WGA talks, Hollywood is trying to operate as if it were any other day in town, despite the fact TV and film writers could be on strike Tuesday if the negotiations don’t go their way.

While high and low-budget shows alike shoot in Los Angeles, New York City, Georgia and across the pond Monday, everyone from writers on sets to executives in office buildings knows Tuesday might bring a situation they haven’t dealt with since 2007.

“As expected, it is eerily quiet — it is overcast in LA and that matches the mood of the town,” one comms exec said. “Lots of discussion about what news to announce and how news will play with both sides of the table, so to speak. Definitely feels like the calm before the storm.”

“It really is the perfect storm,” one agency insider said. “The writers’ concerns are completely and objectively valid, which has the studios and producers a bit more rattled than they’d like to admit. Someone has to budge, but Wall Street is unrelenting in its expectations for studios. Our focus has shifted from ‘What if there is a strike?’ to ‘What’s the 30-day plan? 60? 90?’ It’s time to batten down the hatches.”

As the dark clouds are rolling in for some, other industry members are trying to keep their cool.

“This is where you see people’s true colors of optimism and skepticism,” a network exec said. “We’re hearing progress is being made and there’s still a chance it won’t happen. And then there is the doom and gloom crowd, ‘We’re going back to 2007, all of these people will be out of work.’ So people are showing if they are glass half-full or half-empty.”

There are even those on the writers’ end of the talks who are not ready to call it just yet.

“I do think we have cooler heads on the Guild side this time around and am encouraged by the lack of leaks and vitriol from all involved,” an Emmy-winning writer said.

But if an agreement can’t be reached, networks, streamers and studios are ready with plans — some of which have been in the making for years now — to keep themselves going without writers.

“Like everyone else, we’re all waiting to see what happens but are hopeful cooler heads prevail,” said one broadcast network exec. “That said, we have contingency plans in place in the event a strike does occur.”

Over at another network, a source says, “It’s almost like there is twice as much work happening.”

“We have so many things, it’s such a crazy time,” the individual said. “There are things that have to keep going, so it’s almost like everything is happening doubly — because these things are happening no matter what. Like we have upfronts coming. So you’re almost doing everything twice: You’re doing it as if it was normal and as if you are preparing for a strike.”

The first thing that will likely come down Tuesday, if a strike is put in place, is an announcement regarding late-night TV shows, with networks preparing for those to go dark right away.

Meanwhile, soap operas would be another Day 1 concern, though some, like Peacock’s “Days of Our Lives,” are already on hiatus this week.

One big question mark is how international shoots will be affected. While Netflix wrapped production on “Bridgerton” Season 3 in the U.K. in March and “The Crown” just completed its final season, HBO’s “House of the Dragon” an Amazon’s “The Lord of the Rings: The Rings of Power” and both still filming their upcoming seasons. These are some of the priciest productions in the works right now and, despite their distance from where the WGA contract talks are being held in Burbank, could still be in danger.

Though less of a concern for bottom lines, the Emmys season is upon us and would likely look pretty different during a strike.

“There is a high level of uncertainty, especially during the Emmy FYC window,” a talent rep said. “Will showrunners and writers participate in panels and/or use them as opportunities to highlight their issues?”

One part of the industry that is breathing a little easier today is the film side.

According to multiple sources, movie studios don’t really have a problem until September.

Studio heads have been planning for this for years, hitting dates so they will have titles ready to go. Most big films are already in production with a finished script, or in post-production. There are also scripts turned in for tentpoles,
including James Gunn’s “Superman: Legacy.”

So while it seems nothing is going to have to shut down right away if there is a strike, and assuming their crews will be required to cross picket lines because of contracts, studio execs are increasingly worried about the potential for additional strikes from the DGA and SAG-AFTRA, both guilds that have upcoming contract expirations after the WGA’s. If those negotiations go sour enough to reach work stoppages, the film industry would suffer a total shutdown.

As the clock keeps ticking, there are those in the industry who can’t understand why a strike would be in anyone’s best interest, despite the writers’ issues with their deals.

“It befuddles me why, after the entire world just went through a multi-year shut down, that the industry would want to unnecessarily shoot itself in the foot,” one source said. “Self-inflicted wounds never make sense.”
Brent Lang and Adam B. Vary contributed to this story.

 

[wabbott]

https://www.nytimes.com/2023/05/01/business/media/hollywood-writers-strike.html​

Hollywood Writers Go on Strike, Halting Production​

The dispute, which pits 11,500 television and screenwriters against the major studios, has shattered 15 years of labor peace in the entertainment business.

By John Koblin and Brooks Barnes
Published May 1, 2023 - Updated May 2, 2023, 3:25 a.m. EDT

Hollywood’s 15 years of labor peace was shattered Tuesday, as movie and television writers went on strike, bringing many productions to a halt and dealing a blow to an industry that has been rocked in recent years by the pandemic and sweeping technological shifts.

The unions representing the writers said in a statement, hours before their three-year contract expired at midnight Pacific time, that they had “voted unanimously to call a strike.” Writers will begin walking picket lines on Tuesday afternoon.

The Alliance of Motion Picture and Television Producers, which bargains on behalf of Hollywood companies, said in a statement that its offer included “generous increases in compensation for writers.” The organization added that it remained willing to keep negotiating.

The primary sticking points, according to the studios, involve union proposals that would require companies to staff television shows with a certain number of writers for a specified period of time “whether needed or not.”

The unions representing the writers, the East and West branches of the Writers Guild of America, said “the companies’ behavior has created a gig economy inside a union work force, and their immovable stance in this negotiation has betrayed a commitment to further devaluing the profession of writing.”

Chris Keyser, a co-chair of the W.G.A. negotiating committee, said in an interview that “philosophically, and practically, we’re very far apart.”

The dispute has pitted 11,500 screenwriters against the major studios, including old guard entertainment companies like Universal and Paramount as well as tech industry newcomers like Netflix, Amazon and Apple.

The W.G.A. painted the dispute in stark terms, saying that the ascendance of streaming services and the explosion of television production have eroded their working conditions. It has described this as an “existential” moment, and that “the survival of writing as a profession is at stake in this negotiation.”

Entertainment companies, which had previously said they were approaching the talks with “the long-term health and stability of the industry as our priority,” are confronting a rapidly changing business as network and cable television viewership plummets.

For viewers, the most immediate effect will be felt on talk and sketch shows. Late night shows like “Saturday Night Live,” “The Tonight Show Starring Jimmy Fallon” and “The Late Show With Stephen Colbert,” will likely go dark immediately. Reality series and some international shows, which are not covered by the guild, will be aired in heavy rotation.

It would take a long strike before there is a slowdown in the arrival of new TV shows and movies, because the production process for them can take months or more than a year.

A prolonged production shutdown could also prove damaging to local economies, particularly the workers who help support productions, such as drivers, costume dry cleaners, caterers, set carpenters and lumber yard workers. When the writers last went on strike, for 100 days in 2007, the Los Angeles economy lost an estimated $2.1 billion.
Seth Meyers, the host of NBC’s 12:30 a.m. late night show, alluded to the devastation of the last strike in a segment late last week.

“It doesn’t just affect the writers,” Mr. Meyers said in the web-only video. “It affects all the incredible nonwriting staff on these shows. And it would really be a miserable thing for people to have to go through, especially considering we’re on the heels of that awful pandemic.”

Mr. Meyers said he was a proud member of the W.G.A., and that he felt strongly that what the writers were asking for was “not unreasonable.”

“If you don’t see me here next week, know that it is something that is not done lightly, and that I will be heartbroken to miss you as well,” he said.

The writers have raised numerous grievances. In a very of-the-moment twist, the writers are seeking to put significant guardrails around the use of artificial intelligence. But the most pressing issue to them is compensation.

Over the last decade, a period that is often referred to as Peak TV, the number of scripted television shows broadcast in the United States has risen sharply. Writers, however, said that their pay has stagnated.

In the network television era, a writer could get work on a show with more than 20 episodes a season, providing a steady living for an entire year. However, in the streaming era, episode orders have declined to 8 or 12, and the median weekly pay for a writer-producer has gone down slightly, the W.G.A. said.

The writers want to also fix the formula for residual payments, which have been upended by streaming. Years ago, writers could receive residual payments whenever a show was licensed — into syndication or through DVD sales. But global streaming services like Netflix and Amazon have cut off those distribution arms, and pay a fixed residual instead.

The unions have taken particular aim at so-called minirooms, which have proliferated over the last decade. There is no one definition of a miniroom. But in one example, studios convene a small group of writers before a show has been given an official green light to compose a script. But writers are often paid less to work in minirooms, W.G.A. officials have said.

Writers have also said that the sudden growth of minirooms has also disrupted the decades-long art of learning how to make a television show. Mike Schur, the creator of “The Good Place” and co-creator of “Parks and Recreation,” said in an interview that when he was a young writer on “The Office,” he learned how to write a script, rewrite, edit, work with actors and became familiar with specialized crafts like set design and sound mixing.

“This is not stuff you can read in a book,” he said. “This is stuff that you have to experience.”

But because of minirooms, writers are sent home after as little as 10 weeks, and frequently are not around for the production process at all, he said.

“These companies don’t understand what is coming down the pike,” he said. “And what’s coming down the pike is an entire generation of show creators who might be super talented, who might have a lot to say about the world, but who functionally do not know how to do the job that they are going to be asked to do.”

Studio executives, however, have said privately that they have their own share of problems, and this is not the best time to be giving significant raises.

For several years, Wall Street rewarded media companies for investing in their streaming services at any cost in order to grow their subscriber pool. But investors soured on that philosophy last year, prompting studio executives to find a way to turn their money-losing streaming services into profit engines.

The fallout has been brutal. Disney is in the process of laying off 7,000 employees. Warner Bros. Discovery laid off thousands and shelved titles last year as it tries to pay down a debt load of around $50 billion. Other media companies have adopted similar cost-saving measures.

With that said, executives have also contended that they can weather a strike. Last month, David Zaslav, the chief executive of Warner Bros. Discovery, said, “We’ve got ourselves ready, we’ve had a lot of content that’s been produced.” Two weeks ago, Ted Sarandos, the co-chief executive of Netflix, suggested the streaming service would be better protected than his competitors because of how many unscripted and foreign series it has in production. “We could probably serve our members better than most,” he said.

Still, he conceded the consequences from a strike would be significant.

“The last time there was a strike, it was devastating to creators,” Mr. Sarandos said. “It was really hard in the industry. It was painful for local economies that support production and it was very, very, very bad for fans.”

Screenwriters have walked out six times over the decades. Historically, they have had the stomach for a prolonged strike. In addition to the 100-day walkout in 2007, the writers also walked picket lines for 153 days in 1988. Writers have also shown signs of remarkable unity. In mid-April, 98 percent of more than 9,000 union-represented writers authorized a strike.

The writers will hold demonstrations in New York and Los Angeles, where most entertainment companies are based.
Images of picket signs have already floated onto social media, with slogans like “Scripts Don’t Grow on Trees!” and “The Future of Writing Is at Stake!”

John Koblin covers the television industry. He is the co-author of “It’s Not TV: The Spectacular Rise, Revolution, and Future of HBO.” @koblin

Brooks Barnes is a media and entertainment reporter, covering all things Hollywood. He joined The Times in 2007 as a business reporter focused primarily on the Walt Disney Company. He previously worked for The Wall Street Journal. @brooksbarnesNYT

 

[wabbott]

https://deadline.com/2023/05/writers-guild-uk-wggb-solidarity-ban-non-members-1235353404/

Writers Guild Of Great Britain In Solidarity With WGA Over Writers Strike
May 2, 2023 5:07am PDT
Max Goldbart

UK Writers Guild Expresses Solidarity With WGA & Tells Members Not To Work On U.S. Projects For Strike Duration

The Writers’ Guild of Great Britain (WGGB) has sent out guidance to its members over the strike and reminded them not to work on U.S. shows for its duration.

The Guild has in the past few minutes issued guidance to members and a statement to the press outlining the situation with UK writers and expressing solidarity with the WGA. WGGB members have already been told that they will be removed from the Guild if they take on work within a WGA jurisdiction during the strike.

In the guidance, the WGGB drew writers’ attention to the fact that the WGA “can and will bar a writer from future Guild membership” if they choose to break rank and work for the U.S. players during the strike, which was called this morning.

“This policy has been strictly enforced in the past and has resulted in convincing many would be strikebreakers to refrain from harming the Guild and its members during a strike,” said the WGGB.

The WGGB pointed out that WGA members are being encouraged to report to their Guild “the name of any non-member whom you believe has performed writing services for a struck company and as much information as possible about the non-member’s services.”

UK WGGB writers who accept work on WGA projects and break the WGGB directive will essentially be viewed as ‘crossing a picket line’ and will be blacklisted. Several have indicated to Deadline over the weeks that they would refuse.

Members of both the WGA and WGGB can continue working if their project is under WGGB jurisdiction, according to today’s guidance.

The likelihood of the WGGB members going on strike in the UK is also incredibly low due to differing trade union legislation in the UK.

Secondary strike action is not permitted under UK law but UK writers were encouraged to help in other ways such as taking part in protests or demonstrations that do not fall under the definition of ‘picketing’.

“We continue to show our solidarity with our sister union and their members in the U.S. as they embark on industrial action to secure fair pay, decent working conditions and to gain their rightful share in the future financial successes of their work,” said WGGB Chair Lisa Holdsworth.

“We know that strike action is a last resort and one that requires individual sacrifice. The resounding majority of WGA members who voted for this action have shown the collective strength of their feeling and their resolve to stand firm on issues that affect writers the world over.”

David Allison, a writer on Marcella and Trust Me, backed the “incredibly impressive” WGGB statement.

“Absolutely no messing, total solidarity,” he added. You steal work from U.S. writers on the sly and you’re blacklisted.”

Novelist Tony Lee, who writes under the name Jack Gatland, said: “I might be in the UK but as a member of The Writers Guild I stand in solidarity with the WGA.”

 

[wabbott]

https://variety.com/2023/biz/news/wga-strike-lindsay-dougherty-teamsters-dga-1235602975/

May 3, 2023 10:42pm PT
WGA Holds Solidarity Rally With Teamsters and Other Hollywood Unions: ‘We All Feel Pumped, United’
By Gene Maddaus
The Writers Guild of America West held a rally Wednesday night to demonstrate solidarity with the other Hollywood unions in their collective contract battles against Hollywood’s major employers.

About 1,800 guild members attended the meeting at the Shrine Auditorium, and heard from WGA leaders about the reasons behind the two-day old strike. One of the stars of the show, however, was Lindsay Dougherty, the 39-year-old leader of Teamsters Local 399.

“We’re all sticking together,” Dougherty told Variety outside the event. “We have an opportunity to change things in this industry, and the only way we’re going to do that is if we’re together.”

The Teamsters have a contract in place through July 31, 2024, and so cannot join the strike. But under their contract, Teamsters cannot be disciplined for refusing to cross established picket lines.

“Every single truck that we know of has not crossed,” she said. It’s not yet clear whether that has affected any productions in L.A., however. Dougherty said that production had already slowed considerably even well before the strike.

“It’s predetermined by the studios to do that to starve all of our memberships out of work at this time,” she said. “I believe the studios never had any intention of making a deal in the first place.”

According to attendees, Dougherty — who has a tattoo of Jimmy Hoffa’s face on her left bicep — got a huge round of applause.

“I imagine at least half the audience is probably trying to figure out how to pitch their next show with her as the star,” said Stephen Hootstein, a TV writer.

Jon Avnet, the negotiations chair for the Directors Guild of America, also addressed the crowd, as did Duncan Crabtree-Ireland, national executive director of SAG-AFTRA. Hootstein said it was heartening to see the support from the other guilds, saying it gave off a different vibe than he felt during the 2007-08 strike.

“Sixteen years ago there was a lot of ‘you idiot writers,'” he said. “Even six years ago, when we were on the precipice, there was that same type of energy. I’m not hearing that kind of energy at all.”

The DGA begins negotiations next week on its contract, and SAG-AFTRA starts next month. Both of their contracts expire on June 30.

“Everyone has slightly different issues, but certainly on the core of residuals and sharing in the success of successful shows that reach audiences, that is a common problem that they are addressing,” Hootstein said. “I think there’s some real unity on that front.”

Several writers said they felt united, after seeing so many people going through the same experience together. Many attendees left the Shrine Wednesday night toting Wolfgang Puck-brand packaged charcuterie spreads.

“It’s been scary, but it’s been also really reaffirming,” said Darcy Fowler, a TV writer. “I’ve never been in a room with so many people in this industry with one drive, one goal… We all feel pumped, united and just so supported.”

 

[RivShore]

Paramount losing big last quarter, looks like a lot of it due to streaming...maybe the legacies should have thrown those billions into somehow saving the old cash cow cable model rather than throwing it down the streaming hole??


https://nypost.com/2023/05/04/paramount-shares-tank-28-after-posting-q1-loss-of-1-1b/

Reuters

Paramount Global missed first-quarter revenue estimates on Thursday amid a weak advertising market in its TV business and cut its dividend.

The company incurred a $1.7 billion charge in connection with its plan to integrate Showtime into its Paramount+ streaming service and remove certain programming.

Shares of the New York-based company, formerly known as ViacomCBS, fell 28%.

They have gained more than 35% so far this year.

Chief Executive Officer Bob Bakish in a call with investors said the company is “navigating a challenging and uncertain macroeconomic environment, and you see the impact of that on our financials, as the combination of peak streaming investment intersects with cyclical ad softness.”

The company is seeing signs of stabilization in the ad market, Bakish said.

Paramount Global said its dividend cut to 5 cents per share will result in approximately $500 million in annualized cash savings.

“The company’s 79% dividend cut is not encouraging, but it was necessary,” said Huber Research analyst Craig Huber. “They should have done it years ago, but better late than never.”

Paramount invested in original content to try to attract subscribers to its streaming platform but is up against competition from established players such as Netflix and Walt Disney’s Disney+.
Kevin Costner in "Yellowstone"
Paramount’s CEO said the company is navigating a challenging and uncertain macroeconomic environment. Above, Kevin Costner in Paramount’s hit franchise “Yellowstone.”
©Paramount Network/courtesy Everett Collection

Paramount+, the company’s flagship streaming platform, added 4.1 million subscribers during the quarter, compared with 9.9 million in the preceding quarter.

It did beat the Wall Street estimate of 3.1 million new subscribers, according to data from Visible Alpha.

Sales for its TV media segment declined by 8% from a year earlier and advertising revenue fell by 11%.

Several factors, including higher prices, lower consumer demand across products and services, and weak markets have forced companies to reduce advertising spending.

Revenue at the company was $7.27 billion in the first quarter ended March 31 compared with analysts’ average estimate of $7.42 billion, according to Refinitiv IBES data.
Paramount+ logo
Paramount+ only added 4.1 million subscribers during the quarter, compared with 9.9 million in the preceding quarter.
SOPA Images/LightRocket via Getty Images

Revenue in the company’s direct-to-consumer unit, which includes streaming platforms Paramount+ and PlutoTV, grew 39% in the first quarter.

Revenue from its filmed entertainment business fell 6%.

The operating loss was $1.23 billion for the quarter compared with an operating income of $775 million a year earlier.

Paramount swung to a loss of $1.1 billion, or $1.74 a share, compared with earnings of $433 million, or 65 cents a share, a year earlier.

The company earned 9 cents per share on an adjusted basis, below Wall Street’s estimate of 17 cents per share, Refinitiv IBES data showed.

 

[clarker99]

Paramount losing big last quarter, looks like a lot of it due to streaming...maybe the legacies should have thrown those billions into somehow saving the old cash cow cable model rather than throwing it down the streaming hole??


https://nypost.com/2023/05/04/paramount-shares-tank-28-after-posting-q1-loss-of-1-1b/

Reuters

Paramount Global missed first-quarter revenue estimates on Thursday amid a weak advertising market in its TV business and cut its dividend.

The company incurred a $1.7 billion charge in connection with its plan to integrate Showtime into its Paramount+ streaming service and remove certain programming.

Shares of the New York-based company, formerly known as ViacomCBS, fell 28%.

They have gained more than 35% so far this year.

Chief Executive Officer Bob Bakish in a call with investors said the company is “navigating a challenging and uncertain macroeconomic environment, and you see the impact of that on our financials, as the combination of peak streaming investment intersects with cyclical ad softness.”

The company is seeing signs of stabilization in the ad market, Bakish said.

Paramount Global said its dividend cut to 5 cents per share will result in approximately $500 million in annualized cash savings.

“The company’s 79% dividend cut is not encouraging, but it was necessary,” said Huber Research analyst Craig Huber. “They should have done it years ago, but better late than never.”

Paramount invested in original content to try to attract subscribers to its streaming platform but is up against competition from established players such as Netflix and Walt Disney’s Disney+.
Kevin Costner in "Yellowstone"
Paramount’s CEO said the company is navigating a challenging and uncertain macroeconomic environment. Above, Kevin Costner in Paramount’s hit franchise “Yellowstone.”
©Paramount Network/courtesy Everett Collection

Paramount+, the company’s flagship streaming platform, added 4.1 million subscribers during the quarter, compared with 9.9 million in the preceding quarter.

It did beat the Wall Street estimate of 3.1 million new subscribers, according to data from Visible Alpha.

Sales for its TV media segment declined by 8% from a year earlier and advertising revenue fell by 11%.

Several factors, including higher prices, lower consumer demand across products and services, and weak markets have forced companies to reduce advertising spending.

Revenue at the company was $7.27 billion in the first quarter ended March 31 compared with analysts’ average estimate of $7.42 billion, according to Refinitiv IBES data.
Paramount+ logo
Paramount+ only added 4.1 million subscribers during the quarter, compared with 9.9 million in the preceding quarter.
SOPA Images/LightRocket via Getty Images

Revenue in the company’s direct-to-consumer unit, which includes streaming platforms Paramount+ and PlutoTV, grew 39% in the first quarter.

Revenue from its filmed entertainment business fell 6%.

The operating loss was $1.23 billion for the quarter compared with an operating income of $775 million a year earlier.

Paramount swung to a loss of $1.1 billion, or $1.74 a share, compared with earnings of $433 million, or 65 cents a share, a year earlier.

The company earned 9 cents per share on an adjusted basis, below Wall Street’s estimate of 17 cents per share, Refinitiv IBES data showed.

This explains why $DIS is having a rough day. Not sure where streaming ends up over next several years but these companies are not going to stick with it if they lose billions of $$.

 

[wabbott]

This explains why $DIS is having a rough day. Not sure where streaming ends up over next several years but these companies are not going to stick with it if they lose billions of $$.

https://finance.yahoo.com/quote/DIS?p=DIS

The Walt Disney Company (DIS)
NYSE - Nasdaq Real Time Price. Currency in USD
97.44-3.42 (-3.39%)
As of 03:34PM EDT. Market open.

My prediction (and it's worth exactly $0.00 in value) is that streaming won't pay until advertising is put into the mix. It will be cable all over again. And viewers will put up with it, as we've been programmed for generations to accept it.

 

[wabbott]

Paramount losing big last quarter, looks like a lot of it due to streaming...maybe the legacies should have thrown those billions into somehow saving the old cash cow cable model rather than throwing it down the streaming hole??


https://nypost.com/2023/05/04/paramount-shares-tank-28-after-posting-q1-loss-of-1-1b/

Reuters

Paramount Global missed first-quarter revenue estimates on Thursday amid a weak advertising market in its TV business and cut its dividend.

The company incurred a $1.7 billion charge in connection with its plan to integrate Showtime into its Paramount+ streaming service and remove certain programming.

Shares of the New York-based company, formerly known as ViacomCBS, fell 28%.

They have gained more than 35% so far this year.

Chief Executive Officer Bob Bakish in a call with investors said the company is “navigating a challenging and uncertain macroeconomic environment, and you see the impact of that on our financials, as the combination of peak streaming investment intersects with cyclical ad softness.”

The company is seeing signs of stabilization in the ad market, Bakish said.

Paramount Global said its dividend cut to 5 cents per share will result in approximately $500 million in annualized cash savings.

“The company’s 79% dividend cut is not encouraging, but it was necessary,” said Huber Research analyst Craig Huber. “They should have done it years ago, but better late than never.”

Paramount invested in original content to try to attract subscribers to its streaming platform but is up against competition from established players such as Netflix and Walt Disney’s Disney+.
Kevin Costner in "Yellowstone"
Paramount’s CEO said the company is navigating a challenging and uncertain macroeconomic environment. Above, Kevin Costner in Paramount’s hit franchise “Yellowstone.”
©Paramount Network/courtesy Everett Collection

Paramount+, the company’s flagship streaming platform, added 4.1 million subscribers during the quarter, compared with 9.9 million in the preceding quarter.

It did beat the Wall Street estimate of 3.1 million new subscribers, according to data from Visible Alpha.

Sales for its TV media segment declined by 8% from a year earlier and advertising revenue fell by 11%.

Several factors, including higher prices, lower consumer demand across products and services, and weak markets have forced companies to reduce advertising spending.

Revenue at the company was $7.27 billion in the first quarter ended March 31 compared with analysts’ average estimate of $7.42 billion, according to Refinitiv IBES data.
Paramount+ logo
Paramount+ only added 4.1 million subscribers during the quarter, compared with 9.9 million in the preceding quarter.
SOPA Images/LightRocket via Getty Images

Revenue in the company’s direct-to-consumer unit, which includes streaming platforms Paramount+ and PlutoTV, grew 39% in the first quarter.

Revenue from its filmed entertainment business fell 6%.

The operating loss was $1.23 billion for the quarter compared with an operating income of $775 million a year earlier.

Paramount swung to a loss of $1.1 billion, or $1.74 a share, compared with earnings of $433 million, or 65 cents a share, a year earlier.

The company earned 9 cents per share on an adjusted basis, below Wall Street’s estimate of 17 cents per share, Refinitiv IBES data showed.

Shari is gonna have someone's a$$ for supper tonight.

 

[Traveling on cc points]

https://finance.yahoo.com/quote/DIS?p=DIS

The Walt Disney Company (DIS)
NYSE - Nasdaq Real Time Price. Currency in USD
97.44-3.42 (-3.39%)
As of 03:34PM EDT. Market open.

My prediction (and it's worth exactly $0.00 in value) is that streaming won't pay until advertising is put into the mix. It will be cable all over again. And viewers will put up with it, as we've been programmed for generations to accept it.

We cancelled cable and went to streaming in large part due to the constant commercials.
The thought process was, why are we paying a fairly large sum of money each month AND suffering through advertisements. It just wasn’t worth it anymore.

At least Disney+ is giving an option with their add service and add free service.

 

[wabbott]

Betcha Shari answers the phone when Warren calls, doncha think?​

https://www.wsj.com/articles/paramounts-slashed-dividend-will-cost-it-73a0b5b0?mod=markets_major_pos1&autoplay=false​

Paramount’s Slashed Dividend Will Cost It
Warren Buffett’s involvement has helped sustain the stock through streaming market’s reset
By Dan Gallagher
May 4, 2023 1:04 pm EDT

The media giant behind the “Mission Impossible” franchise has been facing one of its own: how to pay for an expensive pivot to streaming long past the time when investors were willing to write blank checks for that.

Now Paramount Global’s checks to investors won’t be nearly as large as they used to be. The company announced a “dividend modification” with its first-quarter results Thursday morning. That modification—a 79% cut to what the company had been paying—will help it conserve $500 million in cash annually. Paramount Chief Financial Officer Naveen Chopra noted on Thursday’s earnings call that the move “does not mean that we intend to spend more than previously planned on streaming.” Rather, he described it as an effort to “de-lever our balance sheet, which is generally a smart thing to do in an uncertain macro environment.”

Smart? Maybe. Painful? Absolutely. Paramount’s shares sank more than 28% Thursday morning, setting up for what could be the stock’s worst single-day slide on record, according to FactSet. The results also included weaker-than-expected revenue and adjusted pretax operating earnings, the latter missing Wall Street’s estimates by nearly 12%. Losses in the streaming division also continue to mount, hitting $511 million compared with $456 million in last year’s first quarter.

It wasn’t all bad news. Paramount+ added 4.1 million subscribers—1 million more than analysts had anticipated. That brings the streamer’s total base to 60 million, which is more than triple its level from two years ago when the rebranded Paramount+ service was launched. The company noted some early benefits of its move to bundle Paramount+ with Showtime with two of the latter’s programs—“Your Honor” and “Yellowjackets”—driving nearly 30% of the hours streamed on Showtime during the quarter.

Still, Wall Street is well past the point of valuing streaming growth above all. Peter Supino of Wolfe Research called the results a “concerning print,” pointing to the company’s cash burn of $554 million for the quarter—more than twice what analysts had expected. Doug Creutz of TD Cowen said “the dividend cut is clearly shaking investor confidence in the trajectory of the business” in a note to clients.

Slashing the dividend also could end up costing Paramount a valuable ally. Warren Buffett’s Berkshire Hathaway
took up a stake in the company during last year’s first quarter and has been steadily raising it since. Berkshire’s last reported stake by the end of the year was about 93.6 million shares—36% higher than its initially-reported stake. The famous investor’s involvement gave Paramount’s stock some valuable buffering as Wall Street sharply recalibrated its view on streaming last year. Paramount’s stock fell 44% in 2022; Warner Bros. Discovery and Netflix slid 60% and 51% during the year, respectively.

But Mr. Buffett also highly values dividend payers, which form a major part of Berkshire’s portfolio. The famously long-term investor has also shown a willingness to make some quick U-turns of late, such as selling off the majority of its stake in chip-making giant Taiwan Semiconductor Manufacturing earlier this year after just one quarter. Comments Mr. Buffett made in a CNBC interview last month suggested part of his attraction to Paramount was driven by the potential for streaming consolidation: “You’ve got some people who’ve got some deep pockets who aren’t going to quit,” he said of the streaming business. With Paramount now having made his own pockets a bit lighter, Mr. Buffett may not find deal speculation to be enough.

 

[wabbott]

https://www.wsj.com/articles/paramount-para-q1-earnings-report-2023-749549​

Paramount Shares Drop 28% as Streaming Costs Mount
Company cuts its dividend and restarts process to sell book publisher Simon & Schuster
By Will Feuer and Jessica Toonkel

Updated May 4, 2023 1:02 pm EDT

Paramount and other streaming companies have been working to rein in costs. Photo: Gabby Jones/Bloomberg News
Paramount Global PARA -28.35%decrease; red down pointing triangle

shares fell nearly 30% Thursday after the media company reported a steep first quarter loss and said it would cut its dividend, the latest sign of the challenges Hollywood’s titans face as they pivot to streaming.

Paramount’s results were dragged down by major charges related to its cancellation of certain programming, a soft ad market that weighed on its TV business, and rising costs for its flagship streaming service. Paramount said it has restarted its sales process to unload its book publishing unit, Simon & Schuster, and has received interest.

“The media landscape is evolving,” Paramount CEO Bob Bakish said on an earnings call with investors. “We are also navigating a challenging and uncertain macroeconomic environment. And you see the impact of that in our financials as the combination of peak streaming investment intersects with cyclical ad softness.”
The New York company added about 4.1 million subscribers for its Paramount+ streaming service, topping 60 million total subscribers, but its direct-to-consumer business reported a $511 million adjusted operating loss, worse than the year-ago quarter.
Mr. Bakish reiterated that 2023 represents the company’s peak investment year and that it is on a “path to streaming profitability.” Revenue from Paramount’s direct-to-consumer segment rose by 39% to $1.51 billion while costs climbed 31% to $2.02 billion.

Many streamers are adding subscribers, but profits are elusive. Wall Street is looking for signs that the services will turn the corner and begin making money.

Paramount, like some of its streaming rivals, has looked to cut costs by culling content and consolidating its offerings into one platform. It reported nearly $1.7 billion in charges tied to its plan to remove certain programming as it combines its Showtime streaming service with its Paramount+ platform.

The company is looking to sell a majority stake of BET Media Group, which includes cable channels BET and VH1, and is exploring the sale of a majority stake in Noggin, its online learning service for preschool children, The Wall Street Journal first reported.

Paramount’s stock was down 27% to $16.76 in early-afternoon trading.

Amid cost-cutting efforts and ongoing uncertainty in its business, Paramount is slashing its dividend for the first time in several years. It is cutting its quarterly dividend payout to 4 cents a share, down from the 24 cents a share that it declared in March—a move that it expects to result in around $500 million in annualized savings.

The dividend has been a key source of income for media mogul Shari Redstone and her family, which control the company. A spokeswoman for Ms. Redstone declined to comment.

The Redstone family supports the decision to cut the dividend and isn’t planning to sell stock as a result, according to a person familiar with the situation.

“The reality is that the macroeconomic environment has not gotten less complex,” said Paramount’s chief financial officer Naveen Chopra, on the call with investors Thursday. Cutting the dividend will give Paramount more flexibility, he said. “The reduction in the dividend does not mean we plan to spend more on streaming.”

Paramount hopes to complete a sale of Simon & Schuster by year-end. Last year, the U.S. government blocked Paramount’s deal to sell Simon & Schuster to Penguin Random House because of antitrust concerns.

Jonathan Karp, Simon & Schuster’s chief executive, confirmed in a memo to staffers that the sales process is under way and said it “should come as no surprise that there are many interested parties.” Two major rival publishers have expressed interest in Simon & Schuster in the past, as well as KKR & Co.

At a time when book sales are challenged, Simon & Schuster’s quarterly performance was a bright spot. Led by such authors as Colleen Hoover, Taylor Jenkins Reid and Judy Blume, sales at the publishing house rose 19% to $258 million while operating profit increased 16% to $58 million.

Paramount swung to a net loss of $1.12 billion in the first quarter, compared with a net profit of $433 million in the same period last year. The loss was the result of programming charges, which Paramount said are tied to contract termination costs, development costs sunk into abandoned projects and other impairment charges related to content that the company has decided to remove from its streaming platforms.

Paramount’s total revenue fell about 1% to $7.27 billion. In its core TV business, which includes channels like Nickelodeon and MTV, revenue fell 8% to $5.19 billion, amid a challenging environment for ad sales. Mr. Bakish said the company is starting to see improvement in the ad market in the second quarter. Revenue from the film business fell 6% to $588 million because of the timing of planned theatrical releases.

Mr. Bakish said he doesn’t anticipate a major financial impact from the Hollywood writers strike that began this week, but noted it could be positive for cash flow.

 

[clarker99]

https://finance.yahoo.com/quote/DIS?p=DIS

The Walt Disney Company (DIS)
NYSE - Nasdaq Real Time Price. Currency in USD
97.44-3.42 (-3.39%)
As of 03:34PM EDT. Market open.

My prediction (and it's worth exactly $0.00 in value) is that streaming won't pay until advertising is put into the mix. It will be cable all over again. And viewers will put up with it, as we've been programmed for generations to accept it.

$Billions of dollars in losses is likely not made up by ads. This all just feels off. My initial thoughts are that new content is going to slow to a crawl as all streamers look to cut costs and steady the ship. This gold rush of new content we have had over the last few years is likely not to continue.

 

[New Mouse]

$Billions of dollars in losses is likely not made up by ads. This all just feels off. My initial thoughts are that new content is going to slow to a crawl as all streamers look to cut costs and steady the ship. This gold rush of new content we have had over the last few years is likely not to continue.

Considering how much of it on streaming and traditional is absolute trash this would.be very wise of every company. Entertainment production costs are out of control.

 

[wabbott]

https://ktla.com/theme-parks/disney...-park-expansion-plans-with-anaheim-neighbors/

Disneyland pitches theme park expansion plans to Anaheim neighbors
by: Iman Palm
Posted: May 4, 2023 / 03:28 PM PDT

The Disneyland Resort has continued work towards making theme park expansion plans a reality.

Resort officials invited its Anaheim neighbors to community coffee events at local parks so officials can explain what the proposed plan, known as Disneyland Forward, entails and give residents a chance to ask questions about the proposed expansion.

Officials have been holding these events since 2022, after announcing its expansion intentions in March 2021.

The Disneyland Forward community coffee schedule is as follows:
• May 20, Ponderosa Park, 2100 S. Haster St.
• June 3, Walnut Grove Park, 905 S. Anaheim Blvd.
• June 10, Boysen Park, 951 S. State College Blvd.
• July 8, Maxwell Park, 2655 W. Orange Ave.
• July 22, Barton Park, 800 S. Agate St.
• Aug. 12, Juarez Park, 841 S. Sunkist St.
• Sept. 9, Pearson Park, 400 N. Harbor Blvd.
• Oct. 14, Ronald Reagan Park, 945 S. Weir Canyon Rd.
Each event will run from 9 a.m. to 11 a.m.

The proposed plan details the ways in which officials want to update and renovate the Anaheim theme park. The project will include new attractions, shops and restaurants within its existing 490-acre footprint, the Los Angeles Times reported.

In 2021, Disney officials told media outlets they did not plan to ask the city of Anaheim for more space for the theme park extension, but will add new additions to the park in the underdeveloped areas around the resort, which the company already owns.

Specifically, officials want to add new theme park additions around the two Disney hotels west of the theme parks and in the site of a parking lot east of the resort, the Times reported.

The plan also seeks to update the zoning code for the undeveloped areas so theme park, hotel, retail, dining and entertainment additions could be built on the land. Disney officials previously wanted to add a third entrance to the resort but those plans never materalized.

The company has not announced how much a possible expansion would cost, but it previously stated that the endeavor would be privately funded.

While Disney hasn’t officially announced how the theme park expansion will materialize, many Disney fans have theorized that Disneyland could get “Tangled,” “Frozen,” or “Zootopia” inspired lands, along with others.

Other parts of the resort, specifically Downtown Disney, have undergone recent renovations that aren’t a part of the Disneyland Forward project, according to the Orange County Register.
Some restaurants, like Catal Restaurant and its outdoor bar, Uva Bar, closed to make way for the new additions to the downtown district.

 

[wabbott]

https://news.yahoo.com/paramount-just-quit-streaming-point-002106405.html

Paramount Should Just Quit Streaming at This Point — Analyst
Brian Welk
Thu, May 4, 2023 at 8:21 PM EDT

Sixty million people can be wrong. On Thursday morning, Paramount Global reported now having 60 million subscribers to its core streaming service, Paramount+. But by the end of a disastrous trading day (PARA -28 percent), one crippled by poor quarterly earnings and a major cut to shareholder dividend, equity analyst Steven Cahall of Wells Fargo suggested the company just quit streaming altogether at this point.

Paramount+, like every streaming service not named Netflix or Hulu, is not (yet) profitable. But that’s only the beginning of Cahall’s argument. Analysts and media executives have long speculated that only a handful of all the streaming options around today will survive or make money in the long run. Cahall is ready to scratch one of that list today, even if Bob Bakish and his fellow senior Paramount executives are not.

“Why is [direct-to-consumer]/streaming the wrong approach? Because it’s too crowded, meaning lack of scale. Only [Netflix] currently has healthy margins and it’s 7x Paramount+’s scale. We think [Disney] can get there too and it’s 3x [Paramount],” Cahall wrote in an investor note Thursday. “Alas, we see no willingness for these paths.”

Cahall in his analysis suggested that Bakish “change course” and consider “shutting down DTC,” specifically Paramount+. This comes in the wake of the company having already spent $1.7 billion in merging Showtime with Paramount+, based on its Q1 earnings figures.

The way Cahall sees it, Paramount+ is “fighting hard for fifth place” in the streaming wars behind Netflix, Disney+, Hulu, and HBO Max [soon just Max], and it’s competing with the likes of Peacock, Apple TV+, and Amazon Prime Video. According to Wells Fargo’s model, Cahall doesn’t see Paramount or even Comcast breaking even in streaming until 2027. Disney+ expects to be profitable by 2024, and Warner Bros. Discovery should see Max break even by next year.

“We think streaming losses could remain elevated with low clarity on break-even or long-term profitability,” Cahall continued. “In fact, we think DTC will only be meaningfully profitable for the biggest scale players. With both linear and DTC presenting challenges, [Paramount] is likely to have negative revisions and tough decisions, which could include reconsidering sports rights or shifting strategy.”

There’s another alternative for Paramount here. Be Sony.

If Wells Fargo were running Paramount, they’d turn it into an arms dealer like Sony, licensing and selling its content to others. Or they’d go another step further and break up the company’s assets. There’s gold in those mountains of entertainment: Cahall points to Amazon buying MGM for $8.5 billion and figures that Paramount’s studios are worth a combined $30 billion or more.

 

[wabbott]

Reckon this kind of spending is happening at DIS?

https://www.wsj.com/articles/yellow...nt-production-costs-67e634ee?mod=hp_lead_pos5

Paramount Can’t Say No to the Man Behind ‘Yellowstone’: $50,000 a Week for His Ranch, $25 Per Cow
Taylor Sheridan writes most of the company’s hits, giving him clout to dominate the big-budget productions through his network of commercial projects, pushing costs to among the highest in Hollywood

By Erich Schwartzel and Joe Flint
May 5, 2023 5:30 am EDT

No one on the set of “Yellowstone” could figure out why the show was paying a horse wrangler who was more than 1,600 miles away.

It was May 2022, and the Paramount Network blockbuster western was gearing up for a fifth season that was, by all accounts, expected to be another hit—both for its all-powerful creator, Taylor Sheridan, and Paramount Global, the media conglomerate bankrolling his operation.

Back in the show’s production offices in Stevensville, Mont., confusing expenses were piling up, including a time card requesting more than $3,000 from a wrangler named Barbara Stuart.

“I was surprised to see a timecard for a TX wrangler come through last week even though we are now shooting in Montana,” Mary Jasionowski, the show’s production controller, wrote to Ms. Stuart, who was also not known to the head of animal wrangling on set.

“I am Taylor Sheridan’s wrangler,” Ms. Stuart wrote back, saying she worked on one of his ranches and prepared his horses for use in filming the show.

She was an employee of Taylor Sheridan, paid for by the “Yellowstone” budget, caring for horses he charges the production to use, located on a ranch where the production pays him to film: These are the hallmarks of the Taylor Sheridan business model.

In addition to getting paid to write, produce and sometimes direct his shows, Mr. Sheridan has built a network of lucrative commercial projects that feed off them, including actor-training “Cowboy Camps” at one of his ranches and renting herds of cattle at $25 a head.

The model has cranked out huge hits for Paramount and has almost single-handedly driven the success of its nascent streaming service Paramount+ and cable channel Paramount Network. It has also pushed costs to among the highest in Hollywood. Privately, executives and crew involved in the shows question both the total amount of spending and where the money is going.

Mr. Sheridan’s explosive success has given him seemingly unlimited leverage over his production partners: 101 Studios, which makes his shows, and Paramount, which pays for them. The actor-turned-writer and ranch owner dictates where and how his shows are filmed with little pushback, according to executives and crew workers. Among his favorite locations are his own Texas ranches, where he can charge Paramount as much as $50,000 a week.

It’s a level of power unusual in the industry, where even the most successful showrunners typically don’t have such control or personal ventures tied to their productions.

Paramount and 101 Studios executives acknowledge Mr. Sheridan’s shows can be costly—episodes of the “Yellowstone” prequel “1923” run at least $22 million each—but said they are comfortable with their working relationship.

“Taylor’s shows are among our most successful and profitable,” a Paramount spokeswoman said.

Executives at 101 Studios said they work with Mr. Sheridan on finding a balance between saving money and maintaining the quality expected on his shows. They said the company was cost-conscious but argued Mr. Sheridan’s shows, particularly the “Yellowstone” franchise, are worth the cost as proven by their success.

Mr. Sheridan declined to be interviewed for this article.

Speaking earlier this year at a convention for cattle owners, Mr. Sheridan said, “There’s nothing better than a movie company showing up and filming for about a month and paying you a bunch of money and leaving. It’s about the greatest deal going.”

Focus on Paramount spending​

Mr. Sheridan’s output has proved critical for Paramount’s streaming strategy.

Its service Paramount+ added nearly 10 million subscribers in the fourth quarter of 2022 on the back of Mr. Sheridan’s “Yellowstone” prequels “1883” and “1923.” On Thursday, the company said it added about 4.1 million subscribers in the first quarter, bringing total subscribers to more than 60 million.

Internal frustration over the spending on Mr. Sheridan’s shows comes as Paramount is facing scrutiny from investors following a first-quarter loss of $1.1 billion reported on Thursday. That included a $511 million loss in its streaming business, due partly to increased spending on streaming content. Shares dropped more than 28%.

Also for Paramount, Mr. Sheridan created “Tulsa King,” starring Sylvester Stallone as a New York mobster who relocates to Oklahoma, and “Mayor of Kingstown,” starring Jeremy Renner as a prison power broker. He has at least five other shows in development under a contract that runs through 2028, including “Lawmen: Bass Reeves,” about the pioneering Black U.S. marshal, and “Lioness,” a CIA drama starring Nicole Kidman.

Mr. Sheridan has churned out one hit after another with Shakespearean tales of betrayal, intrigue and homespun heroism.

Beyond writing scripts, he has created a conglomerate of businesses to service the productions. By renting his ranches, horses and other holdings to the shows, Mr. Sheridan has collected at least hundreds of thousands of dollars on top of the millions he makes to write and produce, according to invoices and interviews with his associates.

Mr. Sheridan’s shows are described by executives and crew members as drenched in excess, from on-set catering bills double what would be expected to expensive shoots and overtime fees that take costs significantly over budget.

In total, Paramount spends more than $500 million a year on the production of Mr. Sheridan’s shows. That includes close to $200 million alone for the first season of “1923,” starring Harrison Ford and Helen Mirren as Depression-era ranchers. For the eight-episode season that ran from December through February, that comes out to roughly $500,000 per minute.

Other shows with similar high-quality production values cost less. At HBO, “The Last of Us” cost $16 million to $18 million per episode, and “House of the Dragon” episodes typically run just under $20 million each, people close to both shows said.

Paramount+ still lags behind Netflix and Disney+, and Paramount is a small fish in a large pond ruled by tech giants and much-larger media rivals. In 2022, Paramount’s various streaming services lost $1.8 billion, and S&P Global forecasts Paramount’s streaming losses will hit $2 billion in 2023.

Other streaming platforms, including Disney+, haven’t turned a profit, and Paramount says Mr. Sheridan’s shows are not the problem.

“If we could do three more partnerships with people as successful, creative and prolific as Taylor, we’d do it in a heartbeat,” the Paramount spokeswoman said.

‘Are you kidding me?’

Privately, executives have raised concerns about spending on Mr. Sheridan’s productions. While gorgeous landscapes and period details are one reason for the shows’ success, some say the high quality could be sustained at a lower price.
Mr. Sheridan’s requirements go deep into details rarely controlled by a showrunner. Not only does he charge Paramount to rent his own horses, he insists on the animals being outfitted with horseshoes by his preferred farrier. Last May, the “Yellowstone” production flew two of those farriers from Texas to sets in Montana and kept them there for four nights while they completed the job, flummoxing executives at 101 Studios, which manages the production of Mr. Sheridan’s shows and licenses them to Paramount—which pays the bills.

“Are you kidding me? We can’t find a local person?” asked David Glasser, the head of 101 Studios, in an email to several production staffers reviewed by the Journal.

“Taylor only uses these people to do his horses,” responded Bobby Lovgren, the show’s head animal wrangler.

Mr. Sheridan and David Glasser of 101 Studios in Cannes, France, in 2017. Photo: David M Benett/Getty Images
The Paramount spokeswoman said, “Like many of the best creators, when Taylor is working on a western, he has a team of experts with whom he likes to work, but we ensure there are parameters in place to make cost effective decisions.”
Mr. Glasser also questioned the prop master for “Yellowstone,” who ordered 24 horse saddles in the style used by Royal Canadian Mounted Police, for a price of $23,519.19.

“We have had 5 seasons of a show. And we are just ordering saddles now?” Mr. Glasser asked in an email. In another email he wrote: Why was $3,130 worth of prop jewelry being made out of state, when in-state vendors allowed the show to apply for tax breaks? “That is ridiculous. Seriously. How do we control this?” Mr. Glasser wrote.
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After Ms. Stuart, the Texas horse wrangler, submitted time cards, Mr. Glasser called Mr. Sheridan to discuss the personal employees who were billing the productions, according to emails. “He is now completely aware of the problem and was pretty [receptive] in trying to fix it,” Mr. Glasser wrote to some production officers.

Ms. Stuart was approved to be paid out of the “Yellowstone” budget, but “I was clear others are going to be cut,” he wrote.

Mr. Glasser is in the awkward position of attending to Mr. Sheridan’s demands while also explaining the costs to Paramount. A former protégé of jailed producer Harvey Weinstein, he started working with Mr. Sheridan in the aftermath of Mr. Weinstein’s disgrace over accusations of sexual assault. “Yellowstone” was a long-shot bet when Paramount announced its first season in 2017. Today, much of 101 Studios’ business is dedicated to Mr. Sheridan’s productions.

The company is also co-owner with Mr. Sheridan in a $340 million ranch in Texas. Many in the industry, including executives at Paramount, say the shared ownership is an unusual arrangement for a show creator and his nominal production-company bosses, because it could lead to a conflict of interest.

Loss of the family ranch​

Mr. Sheridan was born Sheridan Taylor Gibler in 1970 in Chapel Hill, N.C., the son of a cardiologist. Soon after, his family moved to a ranch near Cranfalls Gap, Texas (population: 277). As a kid, he wanted to be a sheriff. At Texas State University, he flunked out. A Hollywood scout liked his look and recruited him. He moved to Los Angeles, hoping to make it as an actor going by the name Taylor Sheridan.

Shortly before leaving Texas, something happened that Mr. Sheridan would cite in interviews as a formative moment. His family sold its ranch when his parents divorced. He didn’t know of the sale since he was away at college, and his mother has said he didn’t speak to her for a year upon hearing the news.

In Hollywood, Mr. Sheridan found a specialty in Western roles, landing bit parts in shows such as “Walker, Texas Ranger” and “Dr. Quinn: Medicine Woman.” A break came in 2008, when he debuted as David Hale, a deputy police chief, on the FX motorcycle-gang drama “Sons of Anarchy.”

After years toiling in relative anonymity in front of the camera, Mr. Sheridan found himself in high demand behind it following two movie scripts that were commercial and critical hits: “Sicario,” a 2015 movie about Mexican drug cartels on the border that starred Emily Blunt, and 2016’s contemporary western “Hell or High Water.”

Along with his directorial debut, 2017’s “Wind River,” which he also wrote, the trio of films established Mr. Sheridan as a writer of good-and-evil morality plays that hearkened to Hollywood’s John Wayne era.

Paramount agreed to air his first TV series, “Yellowstone,” on its Paramount Network cable channel, a flagship show in its effort to compete with FX and AMC in big-budget, prestige programming.
Starring Kevin Costner as rugged John Dutton, a Montana landowner trying to protect his property from developers and keep his family together, “Yellowstone” quickly built fans in what Hollywood insiders derisively refer to as “flyover country.” After a few years, its audience grew beyond rural communities, and “Yellowstone” became a hit everywhere, typically averaging more than 10 million viewers per episode, making it one of the most popular shows on television.
The first season was set for 10 or 11 episodes at a cost of about $7 million an episode—a high price for a rookie show. It ended up coming in $20 million over budget because of script and production delays, and only nine episodes aired.
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After the show became a hit, the overages didn’t seem important to the studio, according to executives involved in the show.

Costs have grown in subsequent seasons. In addition to the top-dollar A-list talent working on the shows—Mr. Costner (“Yellowstone”), Mr. Ford (“1923”), Mr. Stallone (“Tulsa King”) among them—the productions have large casts, hordes of animals, closets of costumes and on-location shoots mandated by Mr. Sheridan in his scripts.

To shoot the episode “Tall Drink of Water” in season five of “Yellowstone,” Mr. Sheridan wrote a scene that required filming in a specific location: Big Hole Valley, more than an hour away from the set. The long day of shooting cost the production $75,461 in overtime and fees issued when employee meal times are cut, leading one Paramount executive to ask in an email if it was a one-time location, which meant it would have limited use. It was.

Mr. Sheridan, left, and Sam Elliott on set for ‘1883.’ Photo: Emerson Miller/Paramount+

Mr. Glasser said in an interview Mr. Sheridan will fight to keep scenes he considers vital to the storytelling.

“He is not writing ‘shoot at my ranch’ in the script. Those demands are never made. When the [line producer] or I go to Taylor and ask him to cut a day out of the schedule for budget purposes, he is more than willing to accommodate,” said Mr. Glasser. “However, when a line producer comes in and says, ‘Why don’t you cut the river crossing sequence out of the show on “1883,”’ that for sure will be something he is prepared to lock horns over.”

More and more horses​

“1923” is the prequel following the Dutton family’s struggles in the early 20th century. Paramount rushed to get it aired in the fourth quarter of last year, which led to increased costs and a reduction of episodes from 10 to eight, according to Paramount and 101 Studios. Besides shooting in numerous locales around the globe including South Africa and Malta, there were significant special effects. The show also covered Mr. Ford’s flight insurance for his weekend recreation of flying prop planes.

On the most current season of “Yellowstone,” the budget was set at $12 million an episode. Actual costs exceeded that by several million dollars per episode, according to a person close to the show. The number of horses used on “Yellowstone” jumped from 30 in season four to 46 in season five, according to production emails. To film the third and fourth episodes of “Yellowstone” last season, rentals of guns and other props came in nearly twice the budgeted amount—$67,942.50 when only $36,000 was expected, according to an invoice.

That overage and others made Paramount executives skeptical of the spending habits of prop master Ian Roylance. Mr. Glasser suggested in an email to colleagues that they ask Mr. Roylance if he had any ownership in the show’s vendors or a familial relationship with them.

An audit carried out by 101 Studios after Paramount raised concerns found no wrongdoing, Mr. Glasser said. Mr. Roylance didn’t respond to requests for comment.
Several of Mr. Sheridan’s shows are shot on his personal properties in Texas, providing him with another source of income from Paramount. Other locations might offer more favorable tax credits. Shooting in states such as Montana, Texas and Oklahoma add several million dollars to the costs, people familiar with his productions said.

In the case of “Bass Reeves,” location scouts pushed for shooting in Arkansas, which is where Reeves was a marshal. Mr. Sheridan decided instead to shoot it on Bosque Ranch in Weatherford near Fort Worth, which he owns. Mr. Sheridan is seeking $50,000 a week to shoot the show there, far higher than other potential locales, people who work on his shows said.

The Paramount spokeswoman said filming at Mr. Sheridan’s ranches is the most efficient way of shooting, since they can keep the cast and crew in one place.

Ahead of filming for his western shows, Mr. Sheridan hosts a “Cowboy Camp” at one of his Texas properties where actors learn how to handle horses and accurately portray life on a ranch, which Paramount pays for. Ahead of season five of “Yellowstone,” Mr. Sheridan charged the studio $214,979.61 for the roughly weeklong camp for an unspecified number of people, according to an invoice, including nearly $33,000 that went to catering. A significant part went toward the use of Mr. Sheridan’s horses—$2,000 a head.

Asked about the expense of using Mr. Sheridan’s horses, Mr. Glasser said: “There is definitely a premium for horses at this level, but it is something you can put an A-list star on and feel that everyone is working in a safe environment.”

The Four Sixes Ranch near Guthrie, Texas, is the epicenter of Mr. Sheridan’s commercial ambitions. He bought the 152-year-old, 266,000-acre estate—along with its cattle and horses—for more than $341 million last year. To afford the mega-ranch, he told the crowd at the cattle convention earlier this year that he had to “go to the network and make a big overall deal and write a bunch of TV shows for them.”

He also brought in his co-producers as investors in the ranch. According to Texas secretary of state records and people familiar with the deal, Mr. Sheridan’s co-investors on the Four Sixes Ranch include supermarket magnate Ron Burkle, who is an executive producer on “Yellowstone,” and 101 Studios.

Mr. Sheridan has said he plans to expand the Four Sixes brand to an array of products: a Four Sixes beer, Four Sixes clothes, a Four Sixes pickup truck, even a service that will deliver beef from the ranch’s cattle to your door, with plenty of publicity for the brand generated by his shows—in the fourth season of “Yellowstone,” a character spends time at the ranch, with its logo appearing on screen.

A Four Sixes show is already in development for Paramount, too.

The ranch’s address: 1102 Dash for Cash Road.

Katherine Sayre contributed to this article.

 

[RivShore]

Interesting read on the decline and fall of Peak TV:

TV’s Streaming Bubble Has Burst, a Writers Strike Looms, and “Everybody Is Freaking Out”​

https://www.vanityfair.com/hollywood/2023/05/tv-streaming-bubble-has-burst-writers-strike-looms

This "funny money" line made me realize that the rise, decline, and fall of the streaming world really followed the Fed, just like so many high growth/loss making companies - interest rates at zero for too long and this is what you get!

“One way to do it was to have all these highly original, highly creative, highly expensive premium limited series with huge movie stars getting to do a lot of really experimental stuff. It was like funny money that was funding all this as a way of announcing, ‘We’re here! We’re part of the party!’ ”

 

[clarker99]

https://news.yahoo.com/paramount-just-quit-streaming-point-002106405.html

Paramount Should Just Quit Streaming at This Point — Analyst
Brian Welk
Thu, May 4, 2023 at 8:21 PM EDT

Sixty million people can be wrong. On Thursday morning, Paramount Global reported now having 60 million subscribers to its core streaming service, Paramount+. But by the end of a disastrous trading day (PARA -28 percent), one crippled by poor quarterly earnings and a major cut to shareholder dividend, equity analyst Steven Cahall of Wells Fargo suggested the company just quit streaming altogether at this point.

Paramount+, like every streaming service not named Netflix or Hulu, is not (yet) profitable. But that’s only the beginning of Cahall’s argument. Analysts and media executives have long speculated that only a handful of all the streaming options around today will survive or make money in the long run. Cahall is ready to scratch one of that list today, even if Bob Bakish and his fellow senior Paramount executives are not.

“Why is [direct-to-consumer]/streaming the wrong approach? Because it’s too crowded, meaning lack of scale. Only [Netflix] currently has healthy margins and it’s 7x Paramount+’s scale. We think [Disney] can get there too and it’s 3x [Paramount],” Cahall wrote in an investor note Thursday. “Alas, we see no willingness for these paths.”

Cahall in his analysis suggested that Bakish “change course” and consider “shutting down DTC,” specifically Paramount+. This comes in the wake of the company having already spent $1.7 billion in merging Showtime with Paramount+, based on its Q1 earnings figures.

The way Cahall sees it, Paramount+ is “fighting hard for fifth place” in the streaming wars behind Netflix, Disney+, Hulu, and HBO Max [soon just Max], and it’s competing with the likes of Peacock, Apple TV+, and Amazon Prime Video. According to Wells Fargo’s model, Cahall doesn’t see Paramount or even Comcast breaking even in streaming until 2027. Disney+ expects to be profitable by 2024, and Warner Bros. Discovery should see Max break even by next year.

“We think streaming losses could remain elevated with low clarity on break-even or long-term profitability,” Cahall continued. “In fact, we think DTC will only be meaningfully profitable for the biggest scale players. With both linear and DTC presenting challenges, [Paramount] is likely to have negative revisions and tough decisions, which could include reconsidering sports rights or shifting strategy.”

There’s another alternative for Paramount here. Be Sony.

If Wells Fargo were running Paramount, they’d turn it into an arms dealer like Sony, licensing and selling its content to others. Or they’d go another step further and break up the company’s assets. There’s gold in those mountains of entertainment: Cahall points to Amazon buying MGM for $8.5 billion and figures that Paramount’s studios are worth a combined $30 billion or more.

This is where things are at. Even at DIS they will need to license and push advertising to make the streaming side profitable. Netflix is on a knife edge bc they have nothing to help subsidize their business like Amazon or Apple. I am not sure how this all pans out but I am not sure the viewer is going to win.

 

[wabbott]

Interesting read on the decline and fall of Peak TV:

TV’s Streaming Bubble Has Burst, a Writers Strike Looms, and “Everybody Is Freaking Out”​

https://www.vanityfair.com/hollywood/2023/05/tv-streaming-bubble-has-burst-writers-strike-looms

This "funny money" line made me realize that the rise, decline, and fall of the streaming world really followed the Fed, just like so many high growth/loss making companies - interest rates at zero for too long and this is what you get!

“One way to do it was to have all these highly original, highly creative, highly expensive premium limited series with huge movie stars getting to do a lot of really experimental stuff. It was like funny money that was funding all this as a way of announcing, ‘We’re here! We’re part of the party!’ ”

This is why there's no pressure on the companies to settle the writer's strike. Lots of folks are going to lose their jobs strike or no, and now that all can be blamed on the strike instead of management.