Paramount Global Has Discussed Selling Pluto TV Back to Co-Founder Tom Ryan
As Paramount Global evaluates its strategy for all of its linear and streaming assets, multiple sources tell me that Pluto TV’s co-founder and current CEO of Paramount Streaming has been in discussions with the company about repurchasing it. These discussions started before the Skydance deal was announced, but I’m told no valuation has been placed on Pluto TV, and no official offer numbers have been exchanged.
Interestingly, during the Paramount Global all-hands meeting on June 25th, employees say the company didn’t mention or include any reference to Pluto TV during the newly announced go-forward plan. Those who sat in smaller internal meetings also say the brand was absent from the discussions. Since the Skydance deal was announced, Skydance has featured Pluto TV as one of the six core pillars of the company on slide ten of its presentation. However, that doesn’t guarantee that Pluto TV, or any other content brand, will be part of the company going forward. During a call with investors after the Skydance deal was announced, Jeff Shell stated, “Current management is also talking about a couple of transactions that, if they get the right price, we’ll be supportive of.” So Paramount Global’s current management team can sell off assets and make deals they think will help the new management team as long as the new management team is consulted.
The financial metrics of Pluto TV and its platform usage have been a mystery since Viacom acquired it for $340 million in cash in January 2019. In 2022, several Pluto TV executives said the company exceeded $1 billion in revenue in 2021 and was profitable. However, I have not encountered any SEC filing that provides detailed P&L metrics for the company or mentions its profitability. If I missed a filing, I would welcome correction. When a co-founder of Pluto TV mentioned on LinkedIn that the company was profitable, I found it interesting and reached out to Paramount Global’s IR department, which said they “Would not confirm” Pluto TV’s financials. Executives I privately asked within the company said they were unwilling to comment on Pluto TV’s financials, even off the record.
Previously, Viacom, and now Paramount Global, have not broken out revenue, detailed profitability, advertising ARPU, or discussed how they define a monthly active user on Pluto TV’s platform, which totaled 80 million when they last reported it about nine months ago. Pluto TV disclosed that in 2023, users streamed seven billion hours of video, up 40% from 2022, but total viewing hours alone isn’t a useful metric. In a LinkedIn post two months ago, Tom Ryan said Pluto TV had “record viewing hours” in Q1, but no numbers were highlighted.
It’s unclear how Pluto TV defines profitability, considering they get much of their content from Paramount Global at no cost. However, one thing is clear, Paramount’s content is of significant importance to Pluto TV’s business. The potential sale of Pluto TV could profoundly impact its operations. One could make a valid argument that if Pluto TV were sold and had to license Paramount’s content, it would negatively impact its balance sheet and skew the numbers drastically. Pluto TV executives have discussed the importance of Paramount’s content to their business with the media, being quoted as saying, “With the acquisition, the access to the content that we’ve been able to get from Paramount has just been a pivotal moment for us.” Another executive said, “Paramount brings a healthy chunk of premium content to our platform.” Without Paramount’s content, Pluto TV would be a very different service and be less attractive to consumers.
The potential sale of Pluto TV would be less valuable to a new owner if it did not include exclusive access to Paramount’s content. The Skydance management team said it is looking at all options regarding its content strategy to determine which content it should keep exclusive to its platforms and which it can license to others. It’s possible that Paramount could generate more revenue by not restricting content exclusively to Pluto TV, regardless of who the owner is. Whatever strategy they decide on, the value placed on Pluto TV by any potential new owner will depend on what content they get from Paramount in the deal and whether or not it comes with exclusivity.