Paramount stock dips after announcing layoffs, MTV News closure

The Yahoo Finance Live show discusses Paramount layoffs, MTV News shutting down after 36 years, and the ongoing writers' strike in Hollywood amidst the economic slowdown.

Video Transcript

- But moving on to my triple play, that is Paramount. Shares dropping today, down about 4% after the company cut 25% of staff in its domestic cable networks and shuttered its long standing MTV News division after 36 years on air. The news comes after the media giant unveiled a restructuring plan that combines Showtime with MTV Entertainment Studios.

The company, which also announced it would merge Paramount+ and Showtime into one streaming product, is eyeing greater integration between its cable TV and streaming offerings, especially amid those escalating cord cutting trends. But remember, guys, that just last week, the media giant reported disappointing earnings and included a $511 million direct to consumer laws.

It also slashed that quarterly cash dividend to $0.05 a share down from the prior $0.24-- so a major slash there. It sent shares plummeting nearly 30%. Clearly, there's just so much going on at this company right now. And it's not in the best position.

- Yeah. I mean, you guys know this is my old parent company. So I'm not surprised to see these challenges, and especially with their latest quarterly report, as you just mentioned, Ali. It was clear that there were some struggles.

So I knew there would be cost cuts coming. But it is on the sentimental side-- I mean, it's just sad to see the end of an era, especially for MTV News. I mean, I grew up with that. So you know-- so that hurts my heart. And of course, for the people too, but just the sentimental aspect really hits me.

AKIKO FUJITA: Yeah, RIP. There's a lot of people, I think, Diane, that are saying that today. You know, Ali, I've been curious here, with so many of these companies reporting earnings, a lot of the focus, yes, is on their performance in Q1, but also what's happening right now with the writers strike.

We know the Directors Guild is now in negotiations here. Their contract expires at the end of June. How does that complicate the picture for studios like Paramount?

- Well, the general consensus among the executives, at least on these calls, is that right now, they have enough content banked when it comes to the writers strike that it will keep them afloat. But if we see this strike continue into the fall, that is certainly going to impact projects and, ultimately, their bottom line.

As you were saying, that director guild, they're currently in negotiations. That three year contract expires June 30. And it's a lot of the same issues that we heard from the writers-- a lot having to do with the streaming boom, those streaming residuals being less than traditional cable.

We'll see, but this is the first time in 15 years that we're having the DGA negotiating at a time when these writers are striking. And they did warn their members that these talks could get contentious. So the general consensus is right now, it's OK. But I think the longer this goes on, the more of a risk it's going to be.

- Yeah, indeed. We'll continue to watch those guild negotiations. Thanks, Ali.