Channel 5-owner’s TV business loses $6bn of value

Paramount’s announcement adds to fears that the end of traditional television looms

Paramount, the media group and owner of the UK’s Channel 5, has cut $6bn (£4.7bn) from the valuation of its cable TV networks.
The company attributed the blow to a fall in “expected cash flows”, which helped push it to an net loss of $5.4bn for the second quarter.
It said Paramount+, its streaming service, has been winning new customers with shows including Knuckles a new installment from the Sonic the Hedgehog franchise.
It came as Warner Bros Discovery has slashed the estimated value of its television channels by more than $9bn in a sign of the looming death of traditional TV.
The US media giant, which owns channels including CNN, Food Network and TNT Sports, said its network division was now worth $9bn less than previously thought.
Analysts suggested that the write-down was a sign that the decline of traditional television was accelerating.
Industry watcher Alex DeGroote said it “signals the decline in linear is now accelerating much quicker than we all expected”.
He added: “This is not just a cyclical decline, but a structural reset in media valuations.”
The huge write-down, which represents almost half Warner Bros Discovery’s (WBD) $18bn market value, comes just two years after the company was formed in a $42bn merger.
Bosses blamed the impairment on a weak advertising market and uncertainty relating to sports rights such as the NBA, which have been snapped up by Amazon. Networks revenues fell 8pc to $5.3bn.
But the figures also signalled the stark devaluation of legacy TV channels as streaming rivals such as Netflix continued to gain ground.
David Zaslav, chief executive of WBD, told investors: “Two years ago market valuations and prevailing conditions for legacy media companies were quite different than they are today.
“This impairment acknowledges this and better aligns our carrying values with our future outlook.” 
The impairment drove WBD to a net loss of $10bn in the second quarter, eclipsing its revenues of $9.7bn. Shares slumped by more than 10pc to an all-time low.
WBD, which also owns Harry Potter film studio Warner Bros and cable network HBO, was formed in a mega-merger two years ago that was aimed at navigating two traditional media groups through the streaming age.
But the company is still struggling with declining audiences and has seen its share price tumble by almost 70pc, fuelling speculation that bosses could look to break up the group.
WBD has slashed roughly 2,000 jobs over the past year and cut 100 roles at CNN. The news network is merging newsrooms across its digital and pay-TV operations as part of an effort to “future-proof” its business.
In its streaming division, which includes Max, HBO and Discovery+, the company reported a 3.6m increase in subscriber numbers over the quarter, taking its total subscriber base to 103m. Streaming advertising revenues doubled to $240m.
WBD owns TNT Sports with BT, but is expected to take full control of the joint venture. It is currently in discussions about the rollout of its Max streaming service in the UK when its deal to show HBO programmes exclusively on Sky expires at the end of next year.