Paramount Just Survived Its Worst Year Ever — Could That Make It the Perfect Contrarian Bet?
Paramount’s 2025 performance felt like watching someone juggle chainsaws… in a windstorm… at night. This past week alone was enough to tank the stock 18% as the company stumbled through a series of blows that gutted shareholder value. But sometimes, disaster hides opportunity — and this could be one of those cases.
How bad could it be? The problem began with a $16M settlement to Donald Trump over a 60 Minutes interview dispute that most legal experts deemed meritless. The payment’s timing raised eyebrows as it arrived just before the FCC approved Paramount’s $8B Skydance merger, prompting accusations of a regulatory bribe. Shortly after, the company canceled Stephen Colbert’s late-night show — a move mocked by South Park creators as political appeasement. That controversy was quickly overshadowed by two even bigger setbacks to investors:
- The Skydance merger not only diluted the stakes of existing shareholders — swelling outstanding shares from 650M to 1B — but also handed new owners 70% economic control.
- The FCC approved the deal only after Paramount agreed to scrap its DEI programs and hire a watchdog (an ombudsman) to handle bias complaints at CBS News.
This Quarter’s Sleeper Hit
While regulatory trouble stole the spotlight, Paramount was quietly building momentum in areas with real long-term potential. The company’s streaming strategy is finally working, as Paramount+ grew to 77.7M subscribers, reached long-elusive profitability, and drove a 15% year-over-year jump in Direct-to-Consumer revenue. Those wins came even as Wall Street remained skeptical, leaving a potential opening for contrarian investors:
- Despite owning CBS, MTV, Nickelodeon, and a now-profitable streaming platform, Paramount trades at roughly six times operating income — a deep discount compared to peers.
- The company also secured a seven-year, $7.7B UFC rights deal, giving it a strong foothold in premium sports streaming and locking in a high-demand asset rivals have struggled to secure.
The deep-pockets advantage: Since the merger, Paramount has found a new leader in David Ellison — a 42-year-old accomplished pilot and film enthusiast — who aims to make the company “leaner, faster, smarter, and more agile.” Backed by the Ellison family’s $300B fortune, his arrival signals a potential revival, giving Paramount the means to invest aggressively at a time when rivals like Disney and Warner Bros. Discovery are cutting costs. With only two of 23 Wall Street analysts rating the stock a buy, it’s a rare chance to invest alongside one of the world’s richest families in a business they’re determined to fix.
