Paramount's TV networks are collapsing in a $6 billion hole

Like WBD, but a little smaller. Unlike WBD, investors aren't going to care.

• Warner Bros. Discovery just told investors its TV networks were worth $9 billion less than the company thought.
• Now it's Paramount's turn: It's taking a $6 billion charge on its TV business.
• The big difference: Paramount is already about to be acquired, so investors won't care about the disintegrating business.

On Wednesday, Warner Bros. Discovery told investors its TV business was in free-fall, and that it would take a $9 billion writedown on those assets.

On Thursday, it was Paramount's turn: The entertainment conglomerate, which is about to be acquired by David Ellison and a consortium of investors, just took a $6 billion charge on its TV business.

For context: Public investors value all of Paramount's equity at $7 billion.

Paramount's press release barely acknowledges the writedown — it's first referenced in a tiny print footnote.

On the company's earnings call, Paramount management said part of the writedown is a bookkeeping necessity to even out what the company had previously thought its TV business was worth, and the value implied by Ellison's pending acquisition. But the broad strokes echo what WBD was suggesting earlier: The cable TV networks that once powered Paramount — MTV, Comedy Central, etc. — are in permanent decline, even as they continue to throw off lots of cash.

Paramount's TV networks (including CBS, which wasn't part of the markdown) saw their overall revenue decline 17% in the last quarter. Ads were down 11%, affiliate and subscriber fees were down 5%, and licensing fees fell by half. But at the same time, that business still generated more than $1 billion in operating profit.

Meanwhile, Paramount says, just like WBD, that it's making progress on its digital business, which is up and to the right.

The big difference between WBD and Paramount is that Paramount has already agreed to be sold — most likely to Ellison, unless a (real) bidder emerges in the next few weeks. So people who own Paramount shares won't care about these results — it's going to be Ellison's problem in the near future.