The cable TV business can have any ending — except a happy one — and Paramount GlobalPARA

and Warner Bros. DiscoveryWBD

are the ones writing their own tragic scripts. This week, the two companies took massive write-downs on their struggling cable networks, highlighting the accelerating decline of traditional TV in the streaming era.

Pricey pivot: Paramount took a staggering $6B impairment charge on its cable networks, which include MTV, Comedy Central, and Nickelodeon. The write-down comes as Paramount slashes 15% of its US workforce, or ~2K jobs, in a bid to cut costs ahead of its pending merger with Skydance Media.

• Paramount+ subscriber count fell by 2.8M to 68M due to the unwinding of a Korean partnership deal.
• Despite the subscriber loss, Paramount’s streaming division turned a surprise $26M profit in Q2 — its first ever.

Warner Bros. Discovery’s $9B Reckoning

Just a day earlier, WBD took an even larger $9B write-down on its cable networks, which include CNN, TNT, and HGTV. The company’s valuation of these assets has plummeted by $9B in just two years, underscoring the rapid deterioration of the cable TV business.

• WBD
  plunged to an all-time low following the asset markdown and loss of NBA rights — sending its stock down over 70% since early 2022.
• The company is suing the NBA in an attempt to win back the rights it lost to Amazon and Disney.

Channel surfing to oblivion: The massive write-downs by Paramount and WBD are the latest signs of the escalating crisis in cable TV. With consumers increasingly cutting the cord in favor of streaming, media companies are scrambling to adapt. But as this week’s news shows, pivoting to streaming is a costly and uncertain bet — and one that may not pay off fast enough to offset the accelerating declines in their legacy TV businesses or sufficient to compete against leaders NetflixNFLX

and DisneyDIS

— the latter having posted a profit in their streaming business for the first time.