(Bloomberg) -- The head of Paramount Global said it no longer makes sense to run its Showtime premium cable network as a standalone operation, citing the growing financial pressure on the TV industry.
Chief Executive Officer Bob Bakish said at an investor conference Tuesday that Paramount is looking at “consolidation economics” at Showtime and how to “unlock synergies” between the channel and the company’s broader portfolio, including the newer Paramount+ streaming service.
Paramount already has plans to bring together the streaming infrastructure for Showtime and Paramount+, he said, adding that offering Showtime inside the Paramount+ app “really works well.”
“We’ll continue to look for a way to create value there,” Bakish said, adding that the Showtime brand still matters. “It’s transformation. It does affect people.”
Shares of Paramount fell as much as 9.8% to $17.60 in New York. They’re down more than 40% this year, compared with a drop of 17% for the S&P 500 index. Warner Bros. Discovery Inc. and Walt Disney Co. were also lower.
Paramount’s plans for Showtime are part of a series of cost-cutting initiatives at the company, accelerated by a decline in advertising and the continued loss of cable-TV subscribers. Other media companies are taking similar steps.
Paramount’s advertising sales this quarter will be a “bit below” the third quarter, Bakish said, calling the market “challenging.” His comments echo those made a day earlier by NBCUniversal Chief Executive Officer Jeff Shell, who said the market is “definitely getting worse.” NBC is owned by Comcast Corp.
A number media companies have announced layoffs and hiring freezes in recent days, including the digital media company BuzzFeed Inc., which announced plans Tuesday to eliminate 12% of its staff.
The cuts are the result of advertisers pulling back from spending in a weak economy and accelerating subscriber losses from cord cutting. The companies’ new streaming services, while growing, are losing money.
Last week, AMC Networks Inc. said it plans to fire 20% of its US staff, Warner Bros.’ CNN division laid off employees and NPR said it would “severely restrict” hiring after seeing a sharp drop in sponsorship revenue.
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