Paramount Global (PARA) 28 Feb 242023 Q4 Earnings call transcript

Good Afternoon. The Paramount Global's Q4 2023 Earnings Conference Call will begin in one minute's time to allow all participants to get connected. My name is Nadia, and I'll be the conference operator today. At this time, I would like to welcome everyone to Paramount Global's Q4 2023 Earnings Conference Call. [Operator Instructions] At this time, I would like to turn the call over to Jamie Morris, Paramount Global's EVP, Investor Relations.

You may now begin your conference call.

everyone. afternoon, Good taking fourth for to us join Thank XXXX the earnings our quarter call. for you time

Joining me website. note for and today's information we discussion are Bob containing schedules Naveen to earnings supplemental our have addition trending CEO; on Bakish, Chopra, CFO. in Please our that available our release, and our President

discussed involve statements this call are are Before we want more I and on afternoon, in uncertainties. to remind risks statements our made the that risks in start this you and These that filings certain SEC. detail forward-looking uncertainties with

Some case, of schedules measures trending adjusted these be Investor the can release today's of can financial Reconciliations financial our each on in which remarks found website. in contains earnings will non-GAAP section our or results. Relations focus supplemental be information, our in found in of and

Now turn over to I Bob. the will call

to deliver, let's before content our continued where with free joining every on total significant We to evolution color and year our XXXX our deeper speaking the we minutes disciplined flow company adapting on in Then media ways, platform. 'XX, everyone, industry. on I'd we you in provide was thank focused macroeconomic labor our dynamic and afternoon, challenging spend stayed growth with our to it dive aligned and more the execution financials. a a that handing Good to There's few cash like many 'XX earnings needed. priorities and in saw a Global start in deliver With strikes, that, in Naveen XXXX. On over for no tough question in a for to Paramount clearly In two doing as environment driving today's a call, year positioned I'll industry. so, but continued 'XX growth us. accomplishments. strategy,

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hand the in last that, Thank With you. to that just Naveen. of over weeks. it All X I'll

you, Good afternoon, Bob. everyone. Thank

a As of insights QX provide comments execution. my results key mentioned, I'll on full our elements reflect Bob year XXXX our of year continued today, In results.

reach discuss I'll which Paramount+ profitability company how progress making in will for XXXX earnings in in XXXX. result significant in notable growth our DXC Additionally, business and to the drive we're scaling domestic

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spend that expect remains environment, an was to as impacted we versus dynamic flow by XXXX paramount. fact, we content grow shareholder increase to strikes. Despite in a 'XX production cash free our cash despite restart commitment in In value the

value We have ongoing questions. opportunity. we significant with operator, for let's the that that assets today dedicated unlocking that, our represents so said, And even and With as line of creation conviction execution value strong a of more Bob the to value. benefit open are the

to Bryan today first of question Kraft Deutsche Our Bank. goes

sub costs last really sense streaming between I you to of this side? the for will first you you half? And great. Paramount+ Paramount+? costs the the programming the the mix Or streaming total would expectations for higher-than-normal on slate and this the and that how for where came you on on slated color And customer first side, Bowl? a for anything going on originally would give of helpful this strength therefore, where titles mix for be give Or I had would the fall should a well half and one normal year level it the programming year shifting in any TV more the and you are last we for would acquisition growth year's couple. most slate into the domestic important TV be of domestic the year, ex would us if any think your talk then are compare the the from this could ]. [ XXXX? And was sense helpful. about subscribers have content growth of international you then guess international of relative And a in what drive point us the as TV just as year to of programming Super expect year's? and the could be half some then if just in just And are That of in at more now ARPUs for first

Yes. Sure, and sort take the what call second the Brian. first part take This is of with the the metrics. of the I'll let content Naveen part that on Bob. I'll

terms delayed operation On content is. really the now and want episodes, it's shorter we're full up running had how the for launch to in slate CBS I the through number now. We run but we the So with that the you was will highlight but and in And side, in a XX, we the top strike, of we engine XX network. first of has of a all know, strong week, Paramount, one on to stunning really been it's top look, as slate again that's in respect TV Obviously, and earlier. content, And it media and a had XX commented delivering. robust that we're the just

will really late is the in great where and traditional about we fall feeling have again a launching CBS fall. So

CBS. that's So

now, to with X the which also of Comedy plus the new A there. have that cable come Stewart, of XXXX it whole coming a is programming like the side, John bunch Yellowstone Yellowstone, this animation Paramount call continues nicely, Yellowstone Network In programming set fall. way, in for and cetera. Things coming et grow of terms into set Episode of by to week, whole Central MTV, the

Moving about half. we very the streaming, good to first feel

first half, with still we Now delays in the are to respect with strike dealing content. some

But performed slate, obviously, the NFL we've that's March Girls if in and creative. So very been first We're Madness. at a us. we you business, Super I and well CBS Bowl back UEFA Halo, that. for movie. about got at the talked the look the The bit Mean the quarter, Also

good, And into shy the return ham spin-off Kingstowne] we Ninja Things Special the and get half [ The [ which full Team, the the Donovan, all then adds Ray course, ] new Land John Masters, Big back Knuckles, called of Ops, really a show and movie, series, like it's chock-full, Bob we Star Fraser, So [ the once Doras a announced for ] plus, now the strength. Marley QX XX [ in looks the ] Shy come ], Billy ], is Donovan, the frankly, X, the Discovery, of Thorton Seal Demi [ year, with MTV QX X, challenge broader. Man and from Track Turtle spinout starts Season Bob of reality season a originally we're finally King, back. Sonic at series, of Mayor operating Tulsa another Moore, NFL today, Taylor [

feeling perspective. we're about and from linear very a content Naveen? frankly, So good Paramount+

Thanks. Yes.

little you subs. streaming insight So a give Bryan, try I'll on to

starting just So QX. with maybe

the million added to subs we in saw, Paramount+ you As X.X quarter.

think characterize I as fair subs being that to international it's relatively subs. growth balanced as and between domestic

slate the I really performed despite well side, think On the obviously, strike content domestic impact. some

portfolio. a having to of benefit speaks and the that think I balanced sports entertainment

well that us. So worked for

side, in international do We Walmart the with Japan. from with quarter what launched ] partnerships also the [ Plus. then hard the bundle And performance on Walmart like in and we saw new bundle with JCOM a some nice we

So that obviously contributed to sub growth.

very metric what healthy growth. we my point at number give of of color XXXX. than I is sub importantly, subs. comment in play. Paramount lower sub 'XX think terms revenue + just expectations, In we're seeing you there be sub year, the out, expect do Though trends will factors this But important I'd do course, still growth to of behind more a on little are a the revenue And than themselves, XXXX

the the got Bowl. saw magnitude of Super the that very you excited we were Super from First, Bowl. We about starts

a I seen because a high that. many be and that of on number do encouraged you And affects early means by think as about is described, remarks, in what on. the subs of and terms has dialing international, that churn That We some thus assess back-half of you on talked how subs. the of heard little strike, loaded, our exactly event to heard content in we've have on it's Bob far. we've an which, obviously, we're what impact bit back marketing. prepared changes. made of kind local so you a like slate, But then as coming content retained, little The timing will

subs, revenue a doesn't will of that a the We those couple it also represent impacts And you can exiting some economics of a likely subs, cases, just that relationships have will. But probably be if hard of material or while loss EBITDA. impact quite on where, weren't million bundled both frankly, compelling. in

But on ARPU as said, I sorry, growth trends. trend why, that's had relative sub I'm revenue about good noise feeling bit and a you in international of a between there's Paramount+. Oh, the little very so domestic. And on question the

numbers international. but there, than tell higher in see know, that continues I can domestic to don't be disclose you specific you what you we ARPU As

that is other number to thing to of The in components really it. keep different has international mind a

the one continue will a both example, it, do the the So than States. has United so call Paramount+. fact in things contributed the of little more be where we'll is there's that growth markets 'XX of look growth the do ARPU and overall seeing in early And for in 'XX, in more we've territories days seen ARPU to that Western those, in to international what Europe, they like ARPUs higher in

Michael Partners. to The next Guggenheim of question goes Morris

whether you it the if you my profile. been yourself? high spur to content. your you the Two JV sports, between first and think my one and share partnership content, if on for curious it So impact can. sports pretty can second topics, what on and On whether you that Warner Bros one question. And Disney, means on competitive sports to then has thoughts look Fox you that's expect a might I I'm on marketplace, for

the about expect King other which down, talk when putting repopulating think, you talking stable on slate, and before you just on saw a of would seems that it expect. level we I pretty maybe mentioned return windowing, revenue do Bob, converted about a it you that at year when you in we As to came it put strikes, the linear to XXXX? And thing, been streaming, the you from Tulsa licensing XXXX, one were the kind little company until this has during past what

that could right? I strategy did speak if And I hear So you bit, it. maybe a little would to that appreciate

Yes. Sure, Michael.

packaging, service, consumer NFL, the consumer Look, fact sports golf, a sports cetera. true with still It's that the has about missing start starting a product subset half et has of no this point, And appetite. sports. virtually don't a things price, with lot college, the the soccer lot like we So of the fan, only for topic. know to there's a

at that's been price ideal, that's especially So believe hard that look, speculated. to points have the

at fans the you but virtual i.e., in by consumers an factor, full way, for sports engagement Paramount we view with see MVPD come true the I for nonsports. this complement look first, XX% our the referenced round. sports is that terms That Paramount+, their provides Plus, clear integrated In both. really on sports see clearly Paramount+, of entertainment our people partnership. XX% on strategy, we And sports, we year MVPD CBS of true of if side, serve sports second, value through to watching both and streaming and

that's decade. like. And our So opportunity up we're UEFA, into those Marquee the next clear are we continuing a to sports, our locked NFL, exploit NCAA, that and

execution So like here. we where creating strategy have and a advantage to with therein. see we sports line, the value real Paramount Bottom respect sustainable very substantial we are much

me briefly on comment Tulsa. Let

to And a season know, a really CBS we engine. to Tulsa second saw it You variant as Yellowstone, of using dropping audience. with we broad that put Paramount+, did and of marketing do really as we're the is misheard, on you going what broadening we're Tulsa going the continued to of on prior idea season first the of

Tulsa alone, a an well And economic as given from cetera. that's opportunity it's also think for real et we we attractive so think And perspective.

comment Naveen? licensing want You the thing, on to

take lot The I think, sure. trends Mike, is to in the should impacted revenue correct licensing includes I licensing the call of deliver lumpy studio year it, in given it's on were quarter-to-quarter in normal back Yes, little able thesis does for because It and that But because more grow then also as was forward year, licensing from to all year it there's flagged that the licensing year. I'd elements mean part, a can general, a can strike. impacted But that do just bit most licensing on half timing a the your things last the be of to licensing. strike content. We this which past. probably affect we're expect little our be, time will like produce a recognition. rentals, by loaded looking that by be revenue note also this to a perspective.

we place versus 'XX another that's So where in 'XX. benefit a get

Stanley. Ben of The question to goes Swinburne Morgan next

ARPU you any on Paramount+ know there's you are prepared sort guidance that you level that I if in Maybe make on us EBITDA significantly out talked Paramount+ be That's put I on And also programming just if tell sizing. XX%. you costs the of programming programming sense that dimensionalize international haven't wondered Paramount+, don't about? And I just of to lower could wanted if should than to of profitability could your growth of or talked segment at any was disclosure? And finer then relative like and what past. EBIT in you was Questions remarks. 'XX? the domestic outcomes. had to cost the if maybe Naveen shift help And you that it have means laid or all $X about thank that Paramount+ the about guys expectations strategy you over in said rough tied programming sounded at any then billion versus restructuring. that just for you for way sure sort way of point growth lastly, your true. is us, DXC the for a domestic range the or a to charge, pretty international think wide

Thanks, Yes. Ben.

Let hit me all those. to try

of say you of a versus profitability comments few the first if linear, all, Paramount+ trend, particular, sort on So and domestic in terms of I'd things. will, the in our

the lesser the of growth will 'XX That is We to domestic be improvement efficiencies. benefits. content talked growth, slightly a extent, P&L the in DXC of first most So by all, about year-over-year in Paramount+ business. by driven driven ARPU sub

it, there, levels typically of pretty While material domestic some expect international. because more dialing call into healthy going on are efficiencies awareness. from a as sufficient to do pretty marketing be really there to be on marketing a bigger The the on benefits back dose touched kind with question, about the to, There and I on but dollars leaning different. get and at just little mix profitability on to sub get also related to side marketing that in significant is the some does drivers global improvement saved local that contributor to Paramount+ I what not the That's of along side the see the content and to the ARPU. evolving prior bit that well of stuff requires content local. content it, are we the of

than we business it side we're to XX generally to domestically. launched continuing call are after. profitability to United I months way of did the behind think we the in we business. to same the think XX domestic get the outside as that later soon domestic it, So We optimize States business being, And international obviously the

So of your question. first that's of part the sort

the Your second $X billion question on charge.

correct, includes well as You're programming charges. that charges restructuring as

about slightly of see growth but it, does that to we'll talked piece piece We I think $XXX lower be some on trying to you there's see of K with cash the number. than charge include making around the from strike it, that say, we're charges the is going related we abnormal also will the growth lower programming relative in changes of call unwind ARPU. weren't because line that the the than on, costs of your question Paramount+ in rate on in the last 'XX. the, ARPU, you still be to [indiscernible] in the, to the assume some, trend in rate call details ARPU. should be I'll about significantly but cute sort respect ], international. And the then And you'll XX%, [ restructuring to programming programming for growth that assume million should of

Cahall of question Steven Wells to next The goes Fargo.

industry going I wondering about on was towards and bundles sports like more follows bundles JV. look MVPDs could skinny continue this. about get question if seems how your for It just first, to on you're are So skinny to I the the comment kind earlier an thinking push of streaming

And I'm as consumers, for of traditionally MVPDs you wondering think I lot terms in renewals, up especially sort with of be you seeing this think CBS have meeting I you that cable looked QX, year. And seems or improvement in to coming some you I any then in some quite like modest distributed networks. your of thinking QX the It outlook if think, a often more you change ads. seem on domestic after through, said the stabilization in you advertising come that didn't were you QX gave. that market, positive have in that on

love to sequential I changed then So that? to about just on well? cause trends what's would Pluto's specifically growth advertising hear And anything as

Steve. Sure, Yes.

way, advanced cable bundle distributing cetera. a And by streaming obviously networks. brought + products, the on et full including we've been skinny the ad since companies sales, the we together, side, package the CBS So

We done if were networks. while you cable of That the will, set ago, in some a with cetera, Sling that of a forward. roll which [ et Charter to we deals from bundles, ], are skinny Essentials, is continue Spectrum

that's look, the at piece And some we that is Charter, particularly of growth, in. a it participate So we've nice point. market but seen

And and strikes, terms that's in advertising, political in the Second, of behind were and we're in a ad of domestic us. market, current the headwind terms QX. Look, thankfully, through strikes clearly

have premiums. signs many get clearly seeing The Masters service are side NCAA we continue broadly, more the restaurants all we spot, we remarks, bright notably a including my Bowl, in that, healthy and seeing thrilled international stabilization, and was growth that remains indicated in Super as quick consumer I'm categories, of I I'd in As last UEFA domestic. say NFL and that's healthy Sports we year. products, retail into And this XXXX. tough are and also scatter

currency really remain We are does there seeing but as a well, stabilization headwind.

sales there. digital I'd standing of a quarter. terms the We ad $XX more competition there's + fourth our business, a have spend the space. TV We Pluto, In And there. were digital in by That's strong part ad start up And revenue. of still. in out of like business, we Connected broader in it's positioning. XX% lot digital we're billion true, while certainly trends not that's really knowing our

IQ, like our platforms. product, content digital we be on which, video. Pluto If + service. which Pluto to people in how and the ], our sell and high-quality full one [ plus pieces, to you first the those at content content of way, of a in some combination a largest our sports, is want by Paramount+ eyes episode advertisers, in offering and the look But it other of take the being is video being more and of It's environments. content resonates library run library digital Pluto-X plus industries' true Hollywood matters Paramount+ service, of

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includes Beyond that, the real attribution there that in card scale. That are credit have other players retailers, providers. pipeline

Paramount+ space So the next come there's ad we all continue the come very expanding there. And really But see to sales be an about excited and is together what positioning continues digital for in market. in more this upfront. and in be to general to you'll success

Ehrlich to America of Reif goes of question Bank The next Securities. Jessica

just options I One, strategic been things. if can do interest, mean, be like wondering happened -- the ] the time what how have the size is could talk maybe us what $X away, on on. about frame go diginets how or like more would I -- of couple you Disney, maybe press the then billion some reduced? us move wondering, if you what's sounds there a I'm think there's this that? much and attacking was some for finally, you spring. you're help there's up the about about charge how it to you're contract thinking do you help And think charge on of will financial [ that, feel the you then thinking if go? tons you base Paramount+, to impact? about costs. restructuring in or Can And that And in And M&A cost like aside post be how with in big or the about the bundling you're give coming within quarter, options thinking taking you're put first A about you're

Yes. Sure, Jessica.

Let me take Naveen the will first it. some part pick of and up this, of

second for that's we I'm we're at focused And Paramount+. options talking line, terms or business, I something on. all of to for M&A, commenting look, guess, going any it's for which ways Paramount, your is to But speculation on So are value. But bundling looking obviously always question, clear, to shareholder this et or first, in to create into But cetera. get really goes call not time be shareholders. about

enhance When we're your As the churn. bundling case one value or subscribers, look, bundling. benefits in your believers about the the true media. strengthening methods know, your you streaming. of allows of big include, that It's consumer and in It share, proposition you reduce to of certainly is streaming, tried potential creation drive benefits you in think

SAC an potentially that access get base. [ or ]. subscriber eliminate existing You lowers potentially to

might offset, a concession. It of an be As might revenue pricing. it wholesale does require revenue form share, some be

ARPU an you out is us. at have And of does if conceptual look I'd a this already clear a is result it with and substantial for So bundling LTV, not win. We the point theory power experience that the have streaming. effect. But

to bundles like know, U.S., clearly of like you with we partnership Canal been Walmart They've form entry market to internationally others. economics. overall additive It's to a to is another unquestionably has Walmart+ That opportunity that, which of Sky, Scott it's There's incremental expand a hard and in strategy, sales As enhances also our actually relationship. engagement. subbase subs it's have is now our bundle, our proposition product us and and are levels additive things the another as ] key bundle. Paramount+ people been again, in a in allows consumer set reduce combined the and in [ way, media. we a And a investment ad incremental version we're because to into structure by creating the Showtime at. they retail joint of venture Even albeit markets going

opportunities and in strongly associated opportunity, you the in about to net-net, restructuring want continue look we the talk believe value creation So to and incremental we that Naveen point? regard. bundling to

Yes.

and efficiencies side. streaming I the the to in business. on answer believe is So business find both short the opportunity is that of linear continued true That's traditional think look, the the on there we side

take we're But we linear on grow the it's really the and that variety while seen as side, linear all focused side, of of on the how a can taken you'll reasons high-quality noted, the of continue our we past out leveraged few cost we've having why, elements the organizations, still drive maintaining to it, to we how I see preserve on biggest just really us us, it's for increase significantly some single to item what of programming nets the And margins volume the the more and to that programming as amount bets where we place strong our side, is have actions, efficiently that's In streaming you've us combined learned to spend the more about more On we've about without to content. And cases, not about And cash and even Paramount+. we're that do in business. today. years, of we're out across that we content how spoke figure about efficiently one of we've call over engagement overhead. as forward. Content using platforms. different really using streaming going a viewership for continue where

something across that to and focused board unlock going we efficiencies you us see further be So the this continue forward. is on, will

And individual you comment three then Jessica, in we I'd question, terms of your last to dose don't really [ ], remember on ask but things.

a must really pay U.S. It's have the strong. is offering content consumers. our TV eyes First, of in

deals companies, levers get done. you allowed these products, And cetera. distribution pull important to if advanced many our linear networks, as know, across get as we you client it's will, bespoke vary of you to objectives, to, objectives us et deals it's free streaming and can in so Second, And address third, both to all advertising, have you know, solutions. pay, that

every lapped we've my fact, now times multiple as over In client tenure CEO.

So work there's lot with a to there.

following. terms In our of the involves U.S. is potentially international the a along that DXC, deals. say I'd deal bundled of lines hard It

of levers again, there'll be be terms these question, opportunity, combination of compelling. trade-off increased reality Yes, beyond in pull said, the can lower lots But As And that to is the like we we the a wholesale of rate. benefits deals reach, the churn, benefits represent just structure, SAC, carriage ad a reduced of net-net, lower DXC, this discussion. LTV is And monetization of in factors.

will partner, there. out. on we'll not to ability things win-win the we're of lots to that's play get necessarily So solution a get done. focused And Net-net, deals getting way future work a and demonstrated for with always

The MoffettNathanson. next to of question Fishman goes Robert

and think on free drive I upside about your flow just you more despite that's already helps the think any first talk And the thinking to quarter to content potential I'm about monetize year you strikes frame growing increase content going original one spending, for versus and if how for to content keeping 'XX either way how to bigger potentially opportunities? even Paramount+ in your the And Hollywood flows 'XX? then that cash much question, to view to drive to the on that the yourselves related looking or please. Bob, original can then Naveen, one as the about help library specifically for exclusive licensing us Bob you can cash that third parties? Naveen note have benefited in help content the much growth. in forward? And help full Paramount+ licensing

Robert. Sure, Yes.

building a start So continue we streaming path. scaled is believe the fact that with attractive creation an to value business

streaming. which to next domestic another, will. or countless where in which inherent wheelhouse respect others you feature recognize poised [ high-quality looking for for I content allow I'd It's Paramount+. value content, have the value of current team and that's direct about have general and October, if build particularly the really great historically, with know which, you momentum. it past profitability, that that If whole being networks, particularly strong, iteration, meeting series, met over that it for and and you relative value there, allow and the back that Kids being clients of remains Paramount+, films, in in They use That has is hit maintain, the of we're had in with profitability has was ahead superior we to viewers, sustained concept of MIPCOM content, we market market relate is and in we think ] we think our optionality is you which in and believe characteristics with of the our our network more over to XXXX. to success. signature partnership, because and time said, That and old streaming certainly franchises, studios. really real importantly at too, it the I our just you do remind is to marketing They control monetization, lead in connectivity allows promotion, terms true control and one And

in in value is that clearly So and have the asset to of we regard, momentum using is we right Again, creation have there but our form valuable think product. tremendous there. optionality we A, the have opportunity we the content drive given Paramount+, plan

the we is Let me driver that cash free cetera. the of start of free deliver try are question, various That's And hit to flow strikes, growth on I'd about very that. important. flow, one Rob, is to licensing, cash just the significant in And talked saying your contributors. in biggest et Licensing OIBDA, and XXXX. contributors by intending to we've improvement

grow that flow. came year. call of cash strikes. That result for And said, our contemplate in about in in it I really to prior the I it, free spending impact a critical plan 'XX XX% in billion. lower expect the drive has inordinate in our growth $XX.X was back. prior only the in in relative strike savings And OIBDA the it's as year the than healthy that's As of, cash ingredient revenue spend our year, benefits of flow wouldn't a say about that I ability cash to also what years. I'd an and note at to both licensing sort But 'XX and that been

we're forward something looking that's against. So executing to

Yes.

of closing, to that, in significant to With accomplished what you talk execution ahead for us. you total company's more and XXXX value thank next, company so, to So growth our on well, return earnings and year in focused profitability soon. and this we're we'll domestic XXXX. Paramount+ shareholders. really the positioning And generating joining for Be in look we disciplined we're beyond, to and as doing proud we

Thank Thank for This you now concludes today's call. all you. joining.

your You disconnect lines. now may