Berkshire now owns a 15.3% stake in Paramount, which makes it by far its biggest single shareholder. It is even bigger than that of the founding Redstone family which has a 10.2% stake, though they still control 79.4% of the voting shares in the company. Regular readers of my columns are aware of how much I hate the dual shareholding structure which gives founders and their families an outsized role despite their minimal economic interest. It is scandalous that in this day and age, someone with just a 10% stake can have nearly 80% of votes at the shareholders’ meeting.
At the annual “Woodstock for Capitalists” shareholders gala, also known as the annual general meeting of conglomerate Berkshire Hathaway, in Omaha, Nebraska, on May 6, billionaire investor Warren Buffett, who helms the firm, was asked what his game-plan was with Paramount Global. The media firm is the owner of Comedy Central, Nickelodeon, music network MTV, franchises like Mission Impossible and Top Gun, hit streaming shows like Yellowstone and the storied Hollywood studio Paramount Pictures. Buffett, who is never lost for words, paused and then said: “It’s not good news when any company cuts its dividend dramatically.”
Just two days before the Omaha extravaganza, Paramount stock had plunged 28% on news that it was slashing its dividend payout by a whopping 79% because its legacy terrestrial TV and cable TV businesses were floundering even as its forays in video streaming were struggling to get off the ground. The media giant reported weaker-than-expected revenues and missed the adjusted pretax operating earnings forecast by 12%. Streaming losses surged to US$511 million ($677.3 million), compared with US$456 million in the year-ago quarter. Advertising in Paramount’s TV media unit fell 11% year-over-year in the January-March period after falling 7% in the previous quarter. Paramount CEO Bob Bakish assured investors last week that the outlook for the second half of the year is better as the ad market starts to improve.
