That’s a question asked by Robert Fishman, a Senior Analyst at MoffettNathanson, who notes that after more than a 250-day review, the FCC “finally” approved the transfer of Paramount’s broadcast licenses to Skydance, effectively removing the final major obstacle to closing the deal – likely within the next few weeks, if not sooner.
“While we are not offering commentary on the political dimensions of the process, it is worth acknowledging the visible fallout: the disruption of several long-standing and culturally significant franchises in the lead-up to the transition,” Fishman notes.
As Skydance prepares to take the reins, investors, Fishman says, “still face several critical questions that must be addressed before having any confidence to forecast the trajectory and pace of Paramount’s cash flow and earnings.”
With “PARA” at $13.38 ahead of Friday’s financial market opening bell, the future of Paramount+ is perhaps the biggest question Fishman has to ask.
“Questions around the long-term scalability of Paramount+ continue to loom large,” he says. “While the service has added global subscribers over the past few quarters, that momentum is expected to reverse in 2Q 2025 due to the end of an international bundle deal and typical seasonal softness. Looking ahead, strategic questions remain: Will the new management team pursue external partnerships as a viable path forward? Will bundling become a bigger focus? How might strategies evolve around licensing exclusive series and theatrical content? And what becomes of Pluto – does it serve as an on-ramp to Paramount+, or is it positioned for a potential sale?”
Fishman also asks in an investor note if there will be a “meaningful step-up in content investment,” and what’s next for CBS Sports. On the latter topic, he says, “Sports is one of the most important drivers of the network’s portfolio and content spending, led by NFL, March Madness, college football, the Sunday Masters and UEFA football. How does Paramount plan to navigate its next set of sports rights renewals? The most immediate issue is the NFL, which includes a change-of-control clause in its Paramount contract – triggering an early renegotiation once the Skydance deal closes. It is widely viewed that that the NFL’s current deals are significantly underpriced, so we do not anticipate the league forgoing an opportunity to extract greater value from its current partners. However, this could mean either a larger annual payment or likely some other type of value transfer.”
Lastly, the linear cable networks portfolio’s future is questioned by Fishman.
“Paramount still faces the decline of its linear assets and related cash flows,” he says. “The key question is whether the pace of linear erosion can slow enough to give its DTC strategy time to scale. In 1Q 2025, total company affiliate and subscription fees returned to growth of +1%, but that included a -9% decline for TV Media. So will Ellison and the new leadership team follow in other media company footsteps and pursue a strategic realignment of these assets?”
While CBS remains “a key asset with strong reach and relative stability, the same cannot be said for the cable network portfolio,” Fishman concludes. “We remain eager to learn whether Skydance intends to stay in the cable network business, or whether a spin and/or possible combination with other portfolios is on the table. Now that the long, drawn-out sale process is finally nearing its end, Skydance leadership is poised to take control. With that, the real work begins — rebuilding Paramount, addressing the critical strategic questions ahead, and charting a path toward a more sustainable and competitive future.”
