Viacom’s Paramount Pictures suffers $136-million operating loss
Viacom’s Paramount Pictures film studio released two major disappointments in the company’s fiscal second quarter, including “Zoolander 2†with, from left, Ben Stiller as Derek Zoolander, Owen Wilson as Hansel and Penelope Cruz as Valentina Valencia.
Viacom Inc. continues to suffer from Paramount Pictures’ box-office blues.
The media company’s fiscal-second-quarter earnings were marred by more missteps from the Melrose Avenue movie studio.
Paramount released two films that underwhelmed audiences: “Zoolander 2,†with Ben Stiller and Owen Wilson, and “Whiskey Tango Foxtrot†with Tina Fey.
The Los Angeles film studio posted an adjusted $136-million operating loss for the January-March quarter. The movie “10 Cloverfield Lane†performed fine, and worldwide theatrical revenue increased 6% compared to the year earlier period, helped by ticket sales for the Oscar-nominated film “The Big Short,†and Will Ferrell’s “Daddy’s Home,†which were released toward the end of last year.
Still, that wasn’t enough to mop up the mess. Studio revenue declined 1% to $655 million compared to a year earlier.
“Paramount’s results were disappointing this quarter,†Viacom Chairman and Chief Executive Philippe Dauman said Thursday during an earnings call with Wall Street analysts. The company expects Paramount to post a loss for the full fiscal 2016 year.
Viacom is looking to sell a chunk of Paramount Pictures, in large part to raise money to pay down corporate debt. The company has winnowed the list to a handful of suitors, and Dauman said the company was “on track†to have a deal hammered out by the end of June.
“Right now we are working to get a deal done,†Dauman said.
The New York media company also boasts MTV, VH1, Comedy Central, BET and Nickelodeon cable channels. Overall, Viacom’s revenue declined 3% to $3 billion for the quarter. Operating income came in at $586 million, compared to $38 million in the year-earlier period.
Viacom’s TV channels also are trying to reclaim their ratings juice. MTV and Comedy Central’s ratings remain soft, but Nickelodeon has improved its performance.
Viacom also has been caught up in drama over the health of its ailing 92-year-old founder, Sumner Redstone, who stepped down as executive chairman in February.
A Los Angeles judge is expected to hear evidence in a weeklong trial next month, and decide whether Redstone is mentally competent.
There also have been tensions in the boardroom. When Redstone relinquished his management position, his longtime lieutenant, Viacom Chief Executive Dauman was elected chairman. But the mogul’s daughter, Shari Redstone, who serves as vice chair of the company, cast the lone vote against Dauman, saying she wanted someone who wasn’t intertwined with the Redstone family affairs to head the board.
Redstone’s doctors, nurses and Dauman are expected to testify at Redstone’s competency trial, which is scheduled to begin May 6 -- unless the two sides can reach a settlement. Earlier settlement talks fell apart, prompting the two legal teams to gear up for trial.
Wednesday, Judge David J. Cowan denied a request by Redstone’s attorneys to close portions of the trial, saying “This is not Russia.â€
The mogul’s former companion, Manuela Herzer, brought the court case in November after Redstone removed her as the agent in charge of his advance healthcare directive should he become incapacitated.
Herzer contends that Redstone loved her dearly, and that he wanted her to oversee his healthcare. She maintains that she is worried about the billionaire, who is largely confined to his mansion in the Beverly Park neighborhood of Los Angeles.
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