Alternatively, leading entertainment company, Paramount Global (PARA, Financial) traded lower on mixed earnings results. Market share gains in streaming and strength in filmed entertainment were partially offset by weakness in linear television, advertising and affiliate subscription fees. Nonetheless, PARA’s fresh array of global content is driving subscriber momentum worldwide across its direct-to-consumer platform with global subscriptions reaching nearly 67 million active users. Additionally, Paramount Pictures opened six #1 films in a row, with Top Gun Maverick becoming the fifth highest grossing domestic movie of all time. While we acknowledge advertising headwinds and investments will continue to weigh on cash flow, we believe PARA’s long-term opportunity in streaming and the value of its proprietary content remain meaningfully underappreciated. At today’s valuation, we view PARA’s risk/reward is skewed sharply to the upside.
From John Rogers (Trades, Portfolio)' Ariel Fund fourth-quarter 2022 commentary.
